ZAMBIA FIELD OFFICE - African Development Bank · Zambia Field Office 2011 Annual Report 7 The year 2011 was a significant milestone for Zambia as it once more demonstrated that a

2 0 1 1 A N N U A L R E P O R T

ZAMBIA FIELD OFFICE

Lusaka March 2012

1Zambia Field Office 2011 Annual Report

Table of Contents

Foreword by Regional Director ORSB 6

Message from Resident Representative 7

1.0 Macroeconomic Environment 9

2.0 Bank Group Response in Zambia 11

3.0 Country Programme 12

4.0 Analytical Work and Knowledge Sharing 13

5.0 Aid Coordination and Policy Dialogue 14

6.0 Portfolio Performance and Management 15

6.1 Portfolio Structure 15

6.2 Status of Portfolio Indicators 16

6.3 Disbursement 17

6.4 Challenges in Portfolio Management 17

6.5 Portfolio Performance by Sector 18

6.6 Project Pipeline Development 24

6.7 Project Completion Reports 27

7.0 Administrative Matters 28

7.1 Staff Training, Workshops, Seminars and Special Events 28

7.2 Human Resources 29

7.3 Information Technology 29

8.0 Outlook for 2012 31

Annexes

Annex I – Zambia Profile of Macroeconomic Indicators 32

Annex II – ZMFO Portfolio Data as at end December 2011 33

Annex III – Cooperating Partners Division of Labor Matrix 34

Annex IV – Staff Training Details 35

Annex V – Staff List and Contacts 36

List of Tables and Figures

Table 1 – Percentage Share of GDP by Type of Economic Activity 9

Table 2 – Approved and Ongoing Bank Group Projects in Zambia as at

end 2011, by Sector 16

Table 3 – Changes in KPIs of the portfolio from December 2010 to 2011 16

Figure 1 – Distribution of the Bank Group Portfolio by Sector in Zambia 15

2 Zambia Field Office 2011 Annual Report

As of February 2012

1 Unit of Account = 1.55 US Dollars1 Unit of Account = 7,856.04 Zambian Kwacha

Exchange Rate Information


AAA Accra Agenda for Action ADF African Development FundAfDB African Development BankAFD L’Agence Francaise de DeveloppementAFRODAD African Forum and Network on Debt and DevelopmentAGF Africa Guarantee Fund ALSF Africa Legal Support Facility AWF African Water Facility BRICS Brazil, Russia, India, China and South AfricaCAADP Comprehensive Africa Agriculture Development ProgrammeCDC Commonwealth Development CooperationCETZAM The Christian Enterprise Trust of ZambiaCGSP AfDB’s General Services and Procurement DepartmentCHRM AfDB’s Human Resources Management DepartmentCIF Climate Investment FundCIMM AfDB’s Information Management DepartmentCOBS AfDB’s Programming and Budget DepartmentCOMESA Common Market for East and Southern AfricaCPECWSSP Central Province Eight Centres Water Supply and Sanitation ProjectCPG Cooperating Partners GroupCPIP Country Portfolio Improvement PlanCPOs Country Programme OfficersCPR Country Portfolio Review CPs Cooperating PartnersDAPP Development Aid from People to PeopleDFID Department for International Development - UKEIB European Investment BankERF Emergency Relief FundESW Economic and Sector WorkEU European UnionFAO Food and Agricultural OrganisationFAPA Fund for African Private Sector AssistanceFFCO AfDB’s Financial Control DepartmentGAFSP Global Agriculture and Food Security ProgrammeGDP Gross Domestic ProductGRZ Government of the Republic of ZambiaHEST Higher Education and Skills TrainingHIV/AIDS Human Immunodeficiency Virus/ Acquired Immune Deficiency SyndromeIA Implementing AgenciesICT Information and Communication Technology IFAD International Fund for Agricultural Development

Abbreviations and Acronyms


IFC International Finance CooperationISP Institutional Support Project ITPC Itezhi-Tezhi Power CorporationITPP Itezhi-Tezhi Power Project ITT Itezhi-TezhiIUCN The International Union for Conservation of NatureJASZ-II Second Joint Assistance Strategy for ZambiaJICA Japan International Cooperation AgencyJCTR Jesuit Centre for Theological ReflectionJDIC Joint Development Information Centre KPI Key Performance IndicatorKVRC Knowledge & Virtual Resources CentreLISP Livestock Infrastructure Support Project LOC Line of CreditLSC Livestock Service CentresLuWSC Lukanga Water and Sewerage Company MDG Millennium Development GoalM & E Monitoring & Evaluation SystemsMDWPP Multi-Donor Water Partnership Programme MoU Memorandum of UnderstandingMSME Micro, Small and Medium Enterprises MTENR Ministry of Tourism, Environment and Natural Resources MTS Medium Term Strategy (2008-2012)NGOs Non Governmental OrganisationsNRCP Nacala Road Corridor Project NRWSSP National Rural Water Supply and Sanitation ProgrammeNTF Nigeria Trust Fund ODA Official Development Assistance OECD Organisation for Economic Co-operation and DevelopmentOITC AfDB’s Transport and Information, Communication and Technology for

DevelopmentOPSM AfDB’s Private Sector DepartmentORPF AfDB’s Procurement & Fiduciary Services DepartmentORSB AfDB’s Regional South 2 DepartmentORVP AfDB’s Operations 1 Country & Regional Programmes & Policy Vice

PresidencyOSAN AfDB’s Agriculture & Agro Industry DepartmentOSGE AfDB’s Governance, Economic & Financial Reforms DepartmentOWAS AfDB’s Water & Sanitation DepartmentPAF Performance Assessment FrameworkPAR Projects-at-RiskPCR Project Completion ReportPD Paris DeclarationPFSL Pulse Financial Services Limited


PIU Project Implementation UnitPP Problematic Project PPCR Pilot Programme on Climate ResiliencePPP Potentially Problematic ProjectPPP Public Private Partnerships PRBS Poverty Reduction Budget SupportPRODAP Project to Support Lake Tanganyika Integrated Regional Development

ProgrammePSD Private Sector DevelopmentPTA Bank The Eastern and Southern African Trade and Development BankRBCSP Results Based Country Strategy Paper RDA Road Development AgencyRMC Regional Member CountryRWSSI Rural Water Supply and Sanitation InitiativeSADC Southern African Development CommunitySAP MM Systems Applications Products – Materials ManagementSAPSAN Southern Africa Peoples Solidarity NetworkSECU AfDB’s Security UnitSIP Small Scale Irrigation ProjectSMART Specific Measurable Attainable Relevant Time-Bound goalsSMEs Small and Medium EnterprisesSNDP Sixth National Development PlanSPCR Special Programme on Climate Resilience SPV Special Purpose VehicleTA Technical AssistanceTEVET Technical Education and Vocational Education and TrainingTJN Tax Justice NetworkTRA Temporary Relocation AgencyUA Unit of AccountUC Unified CommunicationsUNDP United Nations Development ProgrammeUSAID United States Agency for International DevelopmentV-WASHES Village Water and Sanitation Health and EducationVPN Virtual Private NetworkVSAT Very Small Aperture TerminalWAN Wide Area NetworkWB World BankZANACO Zambia National Commercial Bank ZAWA Zambia Wildlife AuthorityZDA Zambia Development Agency ZESCO Zambia Electricity Supply CorporationZIMCODAD Zimbabwe Coalition on Debt and DevelopmentZMFO Zambia Field Office


This annual report outlines the activities and achievements of the AfDB in Zambia throughout 2011. The Bank, through partnership with the Government of the Republic of Zambia (GRZ), Cooperating Partners and other stakeholders, has continued to demonstrate its strong commitment to supporting economic development. We commend the people of Zambia for the peaceful elections in 2011. The Bank is strongly committed to working very closely with the GRZ and the people of Zambia to contribute towards poverty reduction and inclusive growth.

As at the end of 2011, the Bank’s portfolio of approved and ongoing projects and programmes in Zambia consisted of 15 projects (4 multinational and 11 national projects) with a total commitment of UA 239 million. These projects include 2 private sector operations and a private sector capacity building programme. In addition, the Bank has continued to support studies and knowledge building efforts in a number of areas. The overall disbursement ratio increased from 12% in 2010 to 25% in 2011, reflecting the intensified efforts towards improved project implementation. The anticipated results and impact from the ongoing activities will greatly support Zambia’s growth efforts. The challenges faced have also provided a useful basis to build on the lessons learned and further improve on future interventions.

Additionally, the Bank is in the process of deepening its decentralization efforts in order to support the activities in the field. Towards this end, a Regional Resource Centre has been opened in Pretoria, South Africa, to support our programmes in the Southern Africa Region. That office will complement and support the work that the Zambia Field Office (ZMFO) is already leading, in ensuring enhanced policy dialogue and sustained results from Bank interventions.

AfDB is currently in the process of developing its Long-Term Strategy which will define our strategic direction and future interventions as well as the Bank’s support to regional member countries. Along with the significant growth the Bank is currently experiencing, AfDB commits its efforts to ensuring that its strategic interventions are geared towards supporting inclusive growth in Zambia.

I wish to thank our ZMFO team for the good work in 2011. We envisage 2012 to be a year of promise for Zambia. To ensure that we meet growing expectations, the Bank will continue to focus on enhanced policy dialogue, stronger partnerships, enhanced effectiveness of the decentralization process and closer monitoring of the results and impacts of our projects and programmes.

Dr. Chiji OjukwuDirector, ORSB

Foreword BY REGIONAL DIRECTOR, SOUTH B (ORSB) – Dr. CHIJI OJUKWU


The year 2011 was a significant milestone for Zambia as it once more demonstrated that a peaceful transition of power was possible. This gave buoyancy to the African Development Bank (AfDB) in its efforts to contribute to socio-economic development through its decentralized Zambia Field Office (ZMFO).

Since its inception in 2007 and especially in 2011, the ZMFO continued to record some positive improvements in portfolio performance based on the Key Performance Indicators (KPIs). Major milestones included the signing of the NACALA Corridor Road Project on 20th January, 2011 and the COMESA Airspace Integration Project on 24th February, 2011. The Board approval of the Poverty Reduction Budget Support (PRBS-IV) on 7th October, 2011 and of the Kazungula Bridge project on 7th December 2011, ensured that the year ended on a high note. The Kazungula Bridge project is a significant highlight of the North-South Corridor initiative which includes a component of the Transport Master Plan for Zambia.

The Itezhi-Tezhi Power Project (ITPP) for the generation and transmission of electricity was appraised in 2011 and is due for Board review in the first quarter of 2012. Funds from the Nigeria Trust Fund (NTF) were for the first time, leveraged in Zambia for the ITPP. ZMFO placed in active pipeline, the Mushingashi Conservancy, the Higher Education and Skills Training (HEST), the Livestock Infrastructure Support Project (LISP) and the Mpulungu Port Rehabilitation project, whose Terms of Reference for a feasibility study in both Zambia and Burundi have been drawn up and await approval of both governments. Two studies were undertaken including the Public Expenditure Review for the Urban Water Supply and Sanitation sector and the Manufacturing Industry Inventory/Audit whose draft report is under review. A concept note for a Domestic Resource Mobilisation study in collaboration with Norway and DFID was developed with the Ministry of Finance and National Planning in October 2011.

ZMFO successfully supervised eight projects. Some of the projects were supervised at least twice in 2011, most of the missions led by ZMFO staff. Capacity building training in procurement and disbursement was conducted for Project Implementation Units (PIUs) and Implementing Agencies (IA). A Country Portfolio Review (CPR) was also successfully conducted and a Country Portfolio Improvement Plan (CPIP) developed in November 2011

ZMFO maintained its momentum in country policy dialogue, improving the Bank’s visibility. The second Joint Assistance Strategy for Zambia (JASZ II) was signed by all the Cooperating Partners (CPs), including AfDB. This important document provides guidelines on aid coordination between the Government and the CPs. In addition, AfDB was among seven PRBS-CPs that signed a Memorandum of Understanding (MOU) in October, 2011. ZMFO also joined the Cooperating Partners Group (CPG) Troika along with DFID

Message from the Resident Representative, Dr. Freddie Kwesiga


and Denmark, and was poised to assume chairmanship of the CPG, the Water & Sanitation and Agriculture sectors at the beginning of 2012. A consultant was hired within ZMFO to help with the dialogue processes.

Beyond the CP dialogue, ZMFO participated in workshops and seminars to interact with broader stakeholders including private sector and NGOs. Staff presented papers at several local and international workshops and seminars. The Bank dialogued with diplomatic missions such as the Chinese, French, Japanese Ambassadors and the Head of the EU delegation. This active engagement enhanced the Bank’s involvement in country policy dialogue and improved the Bank’s ability to participate in policy leadership.

The above successes demonstrate that the Bank’s decentralization policy is working. ORSB as the regional Department under which ZMFO falls received a new Director Dr. Chiji Ojukwu, who promptly made his maiden visit to Zambia. ZMFO also hosted the Executive Director responsible for Zambia, Malawi and Mauritius, Mr. Mohit Dhoorundhur. Two locally recruited experts are now fully fledged project Task managers. The Bank actively utilised the print and electronic media to highlight its services and products. ZMFO participated in the National Agriculture and Commercial Show in July/August 2011 for the first time.

In order to further strengthen the decentralization process, a team building workshop was held at Chaminuka Lodge from 15-18th of February, 2011. Several staff members participated in orientation and induction training. Staff responsible for transportation attended a bank-wide training in Kampala. ZMFO also participated in ORSB, ORVP and sector department retreats. ZMFO staff participated in a two day Ethics Training Workshop on the importance of the AfDB Code of Conduct.

Looking ahead, 2012 promises to be an active year for the Bank in Zambia. Meeting the growing expectations against the challenge of resource limitations, will require adoption of innovative partnerships to support Zambia’s development challenges. This will mean greater engagement in policy dialogue, enhanced efficiency in portfolio management, aggressive pursuit of aid coordination and co-financing targets and motivating staff to perform exceptionally as a cohesive team. In this endeavour, every staff matters.

Dr. Freddie KwesigaResident Representative, ZMFOMarch 2012


1.1 Zambia’s economy remained buoyant in 2011. However, the Real GDP growth rate for 2011 is now estimated at 6.1%, lower than the actual growth of 7.6% recorded in 2010.The main drivers of the Zambian economy in 2011 continued to be agriculture, mining, manufacturing, construction, transport and communications. See Table 1 below.

Macroeconomic Environment1

Table 1: Percentage Share of GDP by Type of Economic Activity

Type of Economic Activity 2009 2010 2011 Period Average

Primary Sector 23.4 23.8 22.9 23.4Agriculture, Forestry and Fishing 20.8 20.1 19.4 20.1Mining and Quarrying 2.6 3.7 3.5 3.3

Secondary Sector 30.4 31.7 33.0 31.7Manufacturing 9.3 8.7 8.1 8.7Electricity, Gas and Water 2.8 2.8 3.1 2.9Construction 18.3 20.2 21.8 20.1

Tertiary Sector 45.9 45.5 43.8 45.1Wholesale and Retail Trade 15.3 14.4 13.7 14.5Restaurants, Bars and Hotels 2.4 2.4 2.2 2.3Transport, Storage and Communications 3.6 4.0 3.8 3.8Financial Institutions and Insurance 8.6 8.7 8.1 8.5Real Estate and Business Services 5.7 5.5 5.6 5.6Community, Social and Personal Services 10.3 10.5 10.4 10.4

Source: GRZ CSO National Account Statistics

1.2 The 2011 GRZ budget target was to maintain sound macroeconomic policies achieved over the past years while providing for much-needed investments in infrastructure. Performance in revenue collections is expected to exceed the 2011 budget projections due to expected increase in taxes, particularly from the mining sector.

1.3 Zambia’s inflation has remained in single digits and stood at 7.2 % in December 2011. This was lower than December 2010, which stood at 7.9 %. Food products accounted for 1.9 percentage points while non-food products made up 5.3 percentage points.

1.4 The cost of borrowing for investment has inhibited most of the private sector, particularly the SMEs, from engaging in gainful ventures. On competition, the manufacturing industry is being affected by low competitiveness. The Government is doing its best to reduce the cost of doing business in Zambia. For example, in the 2012 budget, Government proposes to reduce the 40% upper corporate tax rate for banks to 35%.


1.5 Government faced additional spending pressures in 20111. This forced the Government to increase its borrowing which was expected to reach 3.3 per cent of GDP by the end of the year, compared to the initial projection of 2.5 per cent.

1.6 Following the September 2011 elections, the new administration retained the previous government’s emphasis on maintaining a stable macroeconomic environment, conducive to investment, infrastructure and job creation. However, the new government’s focus on social inclusion led to some shifts in resource allocation, with budget allocation to agriculture, health and education increasing by 37.9%, 26.7% and 45% respectively in 2012.

1.7 Macroeconomic targets for 2012 include: increased real GDP growth of above 7.0 %; single digit end-year inflation of no more than 7.0 %; and maintaining overall fiscal deficit to about 4.3 % of GDP while domestic borrowing is being targeted at about 1.3 % of GDP. The Government also intends to maintain gross international reserves of at least four months of import cover.

1 Including a higher wage bill, which resulted in additional cost of about K262 billion; additional financing for maize purchases amounting to K680 billion; the financing of the fuel subsidy, at a cost of K400 billion; and the need to finance the numerous by-elections of about K15 billion.

African Development Bank presence in Zambia.


Bank Group Response in Zambia22.1 The Bank’s response to Zambia’s development challenges is anchored on the

principles and guidance of the Bank’s Medium Term Strategy (2008-2012) as well as the Zambia Results Based Country Strategy Paper (RBCSP) 2011-2015. The Bank’s support is based on the agreed pillars contained in the RBCSP which focus on infrastructure, governance and private sector.

2.2 The Bank is a signatory to the Joint Assistant Strategy for Zambia (JASZ II) 2011-2015 which is the framework for support to GRZ on the implementation of the SNDP. In addition, JASZ II formulates a medium-term strategic framework to assist in realizing the Aid Coordination principles while at the same time ensuring that they are aligned with the GRZ’s Aid Policy and Strategy.

2.3 The Bank is a member of the PRBS group and signed the MOU that guides PRBS implementation and support to government. The PRBS is monitored through the Performance Assessment Framework (PAF) indicators, with agreed focus areas. An annual joint assessment review is undertaken by the group to determine commitments for the next year. The programme is implemented in partnership with six other Cooperation Partners supporting the PRBS process in Zambia.


3.1 Newly Approved Projects

3.1.1 The Bank approved two operations in 2011 valued at UA 66 million, namely, the PRBS IV (approved in September 2011) and the Kazungula Bridge Project (approved in December 2011).

3.1.2 PRBS IV (UA 15 million): The programme was targeted at deepening reforms in financial management, water & sanitation and health. It was innovative and focused on broadening social inclusiveness.

3.1.3 Kazungula Bridge (UA 51 million): The project consists of the construction of a bridge across the Zambezi River, linking Botswana and Zambia. The objective of the project is to improve trade volume and traffic among countries in the sub-region as well as reducing border transit time. The project is co-financed with JICA and the construction of the bridge is expected to commence in 2013.

Country Programme3

Current situation–crossing by pontoon at Kazungula, Southern Province, Zambia.


Analytical Work & Knowledge Sharing44.1 ZMFO conducted two Economic and Sector Work (ESWs) in 2011 as described

below:

4.1.1 Public expenditure review in urban water supply and sanitation; The review explored the cost-benefit ratio associated with annual health treatment costs for water borne diseases against capital investments in water supply and sanitation in three peri-urban areas in Lusaka. It established that there was a 34% reduction in diseases as a result of the investments to improve water supply.

4.1.2 Inventory of the Manufacturing Sector in Zambia. A draft report is currently under review. The objective of this baseline study was to assess the performance of Zambia’s manufacturing sector and its contribution to GDP. This will assist the Bank identify potential future interventions. Final report is expected in the first quarter of 2012.

4.2 The Joint Development Information Centre (JDIC): Jointly established by the Bank and the World Bank, the Centre provides a one stop shop for information to the Zambian general public, policy makers and civil society organization’s on various development issues. The center aims to encourage wider information dissemination, knowledge transfer, dialogue, learning facilitation and capacity building. In 2011, the Joint Development Centre had a total of 6,104 visitors from a wide range of people.

Nkana water treatment plant requiring rehabilitation.


5.1 The GRZ and its Cooperating Partners (CPs) facilitate their dialogue and achieve their respective objectives under the guidance of the aid effectiveness principles embodied in the Paris Declaration (PD) and Accra Agenda for Action (AAA) as well as Millennium Development Goal 8, “Develop a Global Partnership for Development.” All the efforts pertaining to donor coordination ultimately aim to enhance the GRZ’s leadership and ownership of donor funds with the end goal of improving overall service delivery. In recognition of the significance of the non-traditional donors, the Bank has continued to strengthen cooperation with non-OECD donors such as Brazil, China, Egypt, India, Russia, Saudi Arabia and Turkey.

5.2 The Bank, at the end of 2011, assumed lead roles in the CPG, Agriculture and Water & Sanitation sectors. It also remains active in education, environment and natural resources, transport, private sector, PRBS, science and technology, manufacturing and macroeconomics groups. During its reign as CPG Chair in the first six months of 2012, AfDB aims to effectively carry out its role as a focal point and facilitator for dialogue between the GRZ and CPs. In addition, AfDB will take forward the agenda that includes assisting GRZ with improving Domestic Resource Mobilization and the expenditure management framework.

5.3 The Bank actively participated in Aid Coordination in Zambia and the outcomes in 2011 include collaboration in the following initiatives; (i) Signing of the JASZ II; (ii) Improved policy dialogue with GRZ. e.g. signing of CAADP compact; (iii) Co-financed the Kazungula Bridge (JICA); (iv) Co-financed Nacala Corridor Projects (EU, AFD and EIB); (v) Improved design and management of PRBS IV (PRBS Group); (vi) Joint Management of the SIP Project (Finland); (vii) Dialogue on a common livestock development program (EU, World Bank, IFAD, FAO); (viii) Implementation of the NRWSSP (Denmark, GTZ); (ix) Design of the Pilot Program on Climate Resilience (WB, UNDP, IFC) and; (x) Design of HEST project (Netherlands, JICA, Denmark)

5.4 Though the decentralization process has continued to improve the Bank’s visibility and donor coordination efforts, some challenges remain. Firstly, the Bank faces financial constraints in responding to needs presented at dialogue sessions. This does affect effective delivery of its mandate in this important area. Secondly, the absence of the BRICS in aid coordination dialogue, could lead to duplication of efforts. There is therefore a need to further harmonize and coordinate activities of all development partners.

Aid Coordination and Policy Dialogue5


Portfolio Performance and Management66.1 Portfolio Structure

6.1.1 As at end of 2011, the portfolio consisted of 15 approved and ongoing projects (4 multinational2 and 11 national projects) with a total commitment of UA 239 million. These include 2 private sector operations and a Fund for African Private Sector Assistance (FAPA) funded capacity building program. The summary of ongoing projects is in Annex II.

Figure 1: Distribution of the ADB Group Portfolio by Sector3 in Zambia:

6.1.2 Of the total amount of UA 239 million, UA 43 million had been disbursed by end of 2011, representing a disbursement rate of 18%. The average project age is 3.34 years. Figure 1 above and Table 2 below indicate details of the portfolio broken down by sector. Transport is the largest sector with 51%, followed by Water & Sanitation (30%), Multi-sector4 (9%), Agriculture (6%) and Finance5 (4%).

2 Including Kazungula Bridge approved by the Board in December 2011 and to be signed in early February 2012 but excluding SWARP Spinning Mills Project which is being restructured.3 Includes budget support operation – PRBS IV4 Includes budget support operation – PRBS IV5 Private sector projects

Multi-Sector

Agriculture

Water & Sanitation

Transport

Finance (Private Sector)

Multi-Sector; 9%

Agriculture; 6%Finance (Private Sector); 4%


6 This is the disbursement ratio on both ongoing and approved projects as of end December 2011. If Kazungula Bridge Projects, approved in December 2011 is excluded, the average disbursement ratio stands at 25%.

Table 2: Approved and Ongoing Bank Group projects in Zambia as at end 2011, by sector.

SECTORS

AgricultureWater & SanitationMulti-SectorTransportFinance (Private Sector) Grand Total

#

3

4233

15

Amount (UA Millions)

15.4072.66

20.66121.78

8.89

239.39

% of Portfolio

6%30%

9%51%4%

100%

Amount Disbursed

(UA Millions)

6.3624.69

5.510.985.37

42.90

Disbursement Rate (%)

41%34%

27%1%60%

18%

Average Age

(Years)

5.574.61

2.851.602.08

3.34

6.2 Status of Portfolio Indicators.

6.2.1 Table 3 outlines the changes in the KPIs of the portfolio from December 2010 to December 2011. The average project age in the portfolio decreased from 5.59 to 3.34 years. There was a slight reduction in the overall portfolio rating from 2.47 to 2.36. The percentage of Projects-at-Risk (PAR) increased marginally from 14.29 to 16.67.

Table 3: Changes in KPIs of the portfolio from December 2010 to 2011.

KPI

Problem Projects

Potential Problematic Projects

Projects-At-Risk (%)

Average time frame from approval to signing (Months)

Disbursement Ratio (%)

Average Age of Active Portfolio (Years)

Overall Portfolio Rating (Scale 0 – 3)

2010

1

1

14.29

2

12

5.59

2.47

2011

1

1

16.67

2.28

18.06

3.34

2.36

YEAR


6.2.2 The portfolio reported one Problem Project (PP) (SWARP Spinning Mills) as at end 2011. This is a private company that is under receivership. The project is expected to be closed in the first half of 2012 at the conclusion of the winding up of the company.

6.2.3 There was only one Potential Problematic Project (PPP) by the end 2011, namely the Lake Tanganyika Regional Integrated Project. This is a regional project whose implementation has been delayed owing to inadequate provision of GRZ counterpart contribution. A mid - term review of the project was carried out in 4th quarter of 2011 during which the project activities were restructured as a result of the implementation difficulties.

6.3 Disbursement

6.3.1 The improvement in overall disbursement ratio in 2011 to 18% is attributable to the progress made in the Central Province Eight Centers Water Supply and Sanitation project that was completed in December 2011. A total of 43 million UA had been disbursed by end 2011 on the active portfolio. Annex II highlights the disbursements amount per project. PRBS IV was only disbursed in January 2012 due to delays in attaining effectiveness in 2011.

6.4 Challenges in Portfolio Management

In 2011, the following were some of the major challenges faced and mitigation measures applied in the development and implementation of the portfolio;

ITEM

Procurement Planning and Processing;

Disbursement

Community ContributionProject ImplementationCounterpart Funding Exit Strategy

DESCRIPTION

¢Delays caused by unrealistic procurement plans, bidding periods and delivery times

¢Inappropriate design of procurement methods ¢Inadequate monitoring of procurement processes

(i.e. bid validity, guarantees, extensions) by executing agencies

¢Incomplete documentation to support the procurement processes.

¢Incomplete documentation & information provided with disbursement applications

¢Inadequate timely feedback to PIUs on direct disbursements

¢Untimely contribution from communities during project implementation

¢Delays in “No Objections” from the Bank¢Weak capacity of local contractors ¢Untimely release of Government contribution to the

project. ¢No proper exit strategies to ensure sustainability

after project completion¢Uncompleted projects tarnish the name of the Bank.¢Overage projects occupy significant staff time to

clean up and bring to closure

MITIGATION

In order to address the above challenges, the Bank has ensured the following;

¢Effective dialogue with GRZ and executing agencies to ensure timely provision of counterpart funds, timely reporting and closure of projects.

¢Strengthening the capacity of implementing agencies on p ro j ec t management .

¢Availability of proper skills mix at project design.

¢Involvement of GRZ at all levels of the project cycle to ensure ownership.

¢Monitor procurement plans and take early remedial actions.

¢Regular and timely portfolio c l e a n u p , i n c l u d i n g restructuring of projects.


6.5 Portfolio Performance by Sector

6.5.1 Agriculture

6.5.1.1 The agricultural sector in Zambia continued to suffer low productivity, dependence on rain-fed agriculture, lack of appropriate and affordable breeding stock, poor marketing and low investment, low value addition and diversification, despite maize surpluses recorded in the past two years. Furthermore, competitiveness of the sector has been adversely affected by poor transport infrastructure, inadequate storage facilities and limited access to energy. Biased resource allocation to maize production and marketing subsidies is blamed for this situation. Government has stated its priorities in investment to crops beyond maize, strengthening research and extension services, irrigation development, rehabilitation of livestock infrastructure and promoting disease free zones. In addition, Government is working on reforming the agricultural marketing system, promoting agro-processing and forward linkages including the development of farm blocks and land development.

6.5.1.2 Small Scale Irrigation Project (SIP): The project was originally intended to develop six small-scale irrigation schemes covering 1,980 hectares in Chongwe, Mazabuka and Sinazongwe districts. Detailed feasibility studies revealed that the project was grossly under-budgeted and additional financing was therefore mobilized from the Finnish Government for Euro 10 million. The current phase is financed through this grant and will close in 2012 with a target to fully complete three schemes at Nega-Nega, Nzenga and a dam at Kanakantapa.

6.5.1.3 In 2011, tremendous progress was recorded as the Nega-Nega scheme was physically completed and will become operational in 2012. The 165 smallholder farmers are negotiating to become sugarcane outgrowers and will in addition, grow high value crops such as vegetables, maize, beans, green maize, onion, cabbage, tomatoes, green beans and okra. The scheme at Nzenga and the dam at Kanakantapa will be completed by 2012. This project provides some useful lessons on donor co-financing possibilities in Zambia.

6.5.1.4 Project to Support Lake Tanganyika Integrated Regional Development Programme (PRODAP): The Project was technically launched in Zambia in February, 2010 and closing date is 2013. In 2011, the project installed a National Coordination Unit. It also mobilized and sensitized key stakeholders and beneficiaries on the goals and objectives of the project. It set up community governance structures in twenty (20) pilot villages in Mpulungu and Kaputa Districts. Tenders and procurements for works and goods were issued and are now being implemented. After a mid-term review in August 2011, the project was restructured, including extension by eighteen months, change of some activities and decentralizing the task management of the project to ZMFO.


6.5.1.5 Community Water Management Improvement Project for Traditional Farmers in Central and Copperbelt Provinces: This project is funded under the Bank’s African Water Facility (AWF). It aims to empower 5,000 traditional farmers with low-cost irrigation technologies and water management techniques to alleviate poverty and achieve food security. Development Aid from People to People (DAPP), in partnership with The Christian Enterprise Trust of Zambia (CETZAM) micro-finance is implementing the project. Community investments and interest-bearing loans are being provided to the farmers. More than 3,000 farmers benefited from irrigation demonstration and loans in 2011. The duration of the project is 36 months. A baseline survey was completed. Field activities were conducted in the communities.

6.5.1.6 Emergency Humanitarian Assistance: Following the extensive flooding that ravaged Zambia in 2009/10, with over 1 million people facing food insecurity and increased vulnerability, the Bank approved a US$1million grant under the Emergency Relief Fund (ERF) to assist 185,406 households. The grant supplemented Government efforts to build long-term resilience of rural livelihoods and represented 22% of the short-term financial needs for emergency relief. The grant financed 2,100 tons of maize, 90 tons of early maturing seed maize and 1,250 tons of vegetable seeds, including logistics to the Disaster Management and Mitigation Unit that manages Zambia’s emergency activities.

6.5.2 Water & Sanitation

6.5.2.1 GRZ’s focus on providing “adequate, safe and cost-effective water supply and sanitation services” to ensure the health and well-being of the citizenry is articulated in the SNDP. The ultimate goal is to increase sustained access to water supply and sanitation by strengthening the institutional and policy frameworks and improving systems for service delivery, as well as increased financing to the water sector.The Bank in 2011 supported three projects amounting to UA 72.03 million.

6.5.2.2 Central Province Eight Centres Water Supply and Sanitation Project: The project, which was completed in December 2011, improved the quality and delivery of water supply and sanitation services to approximately 300,000 people in Kabwe, KapiriMposhi, Mkushi, Serenje, Chibombo, Chisamba, Mumbwa and Nampundwe. The outcome was the rehabilitation and extension of existing water supply and sanitation infrastructure. The project also supported the formation of the commercial utility, the Lukanga Water and Sewerage Company (LuWSC) that is responsible for the delivery of services.

6.5.2.3 Nkana Water Supply and Sanitation Project: The main activities in 2011 were the award of contracts for major works: Kitwe Sanitation works, Kalulushi Water Supply and Sanitation works and the Chambishi Water Supply and Sanitation works. These works are expected to commence on 6 February 2012. Under the project, Ministry of Health conducted training for 90 Community Health Neighborhood Watch Committee members on social marketing (communication for behavior change).


6.5.2.4 National Rural Water Supply and Sanitation Programme: Notwithstanding the slow start to implementation due to institutional capacity problems in the executing agency, significant progress was made in 2011. Borehole drilling works commenced in October 2011 and approximately 300 boreholes had been drilled out of the total target of 1,499 boreholes. There was improved institutional capacity at Local Authority level due to training of Area Development Committees and Village Water and Sanitation Health and Education (V-WASHES) groups on their roles and responsibilities in the programme; and training of District supervisors in borehole drilling supervision.

6.5.2.5 The expected impact will include better health outcomes in rural communities with improved access to safe water. It will also result in increased school attendance, especially for the girl child. This is in line with providing water and sanitation facilities in rural schools. In addition, water points will be provided for raising livestock and cultivation of subsistence crops near communities. Increased productive and income generating activities through reduction of time spent in fetching water will be an indirect impact of the project.

6.5.3 Social Sector

6.5.3.1 Zambia’s Vision 2030 aims at providing equitable and accessible education and skills training opportunities for sustainable livelihood development. However, the Zambian Technical Education and Vocational Education and Training (TEVET) / HE sector requires strong support to achieve the above stated goal. The Bank in accordance with its mandate of developing and strengthening the Regional Member Country (RMC) to achieve economic growth has responded to these challenges in the sector by past interventions in the Education and Health Sectors. New interventions are also being planned to enhance human capital development for Zambia at the TEVET and HE level.

ORSB Director Ojukwu visits Nkana Water Supply and Sanitation Project.


6.5.4 Private Sector

6.5.4.1 Economic diversification in agriculture, tourism, manufacturing, mining and energy sectors is critical for accelerating growth development, wealth creation, poverty reduction and improved livelihoods of the vast majority of Zambians. In all these areas, Government has stated its intention to promote private sector investment and Public Private Partnerships (PPPs) and build capacity for Micro, Small and Medium Enterprises (MSMEs). However, access to long term financing remains a challenge. In 2011, the Bank provided support as follows:

6.5.4.2 Zanaco Bank Plc: This is a $10 million Line of Credit (LOC) and US$ 2 million contribution to a joint Bank-USAID Partial Credit Guarantee Scheme. 50% has been disbursed and 150 SMEs have benefited from the LOC.

6.5.4.3 Investrust Bank Plc: The transaction includes $3.5 million LOC for on-lending to local SMEs. The Bank has disbursed 100% of the financing to Investrust. A Technical Assistance package targeting both Zanaco and Investrust, SMEs and non-financial service providers in Zambia is also included.

6.5.4.4 Pulse Financial Services Limited: The Bank availed financial support to Pulse Financial Services Limited (PFSL) in 2009 consisting of the provision of a loan guarantee (potentially up to USD 2 million) and a technical assistance program (USD 0.935 million) through FAPA resources. The Technical Assistance (TA) is to support the transformation of PFSL into a greenfield, early stage and growth-oriented microfinance institution. A total of 9 branches countrywide have been opened so far.

6.5.4.5 Swarp Spinning Mills Limited: The project involved the expansion of the existing production facilities into the manufacture of polyester/cotton yarn, high quality 100% cotton yarn and surgical cotton wool, primarily for export7 The company is currently under receivership and the project status is as below.

¢ The Receiver Manager of Swarp Spinning Mills Plc., has received an offer of US$ 3.25 million from a willing buyer to purchase the assets belonging to Swarp Spinning Mills Plc.

¢ PTA Bank, one of the co-financiers in the project is unsatisfied with the offer and is therefore negotiating to buy-out a AFDB and Commonwealth Development Cooperation (CDC) stakes. Once the process is finalized, the Bank and CDC shall be out of the Swarp Spinning Mills Plc transaction.

7 90% of output was to be exported.


6.5.5 Transport Sector

6.5.5.1 The current state of Zambia’s transport infrastructure is considered a major impediment for achieving the Government’s ambitious economic development and socially inclusive development goals. The SNDP and Vision 2030 acknowledge the need for strong and sustainable infrastructure as a core condition for economic growth. The Government is currently in the process of initiating the review of the Transport Policy of 2002 based on an analysis of multi-modal transport requirements. GRZ intends to develop a National Transport Master Plan as part of the SNDP.

6.5.5.2 Nacala Road Corridor Project (NRCP), Phase II: This project aims at supporting economic growth in the Southern African Development Community (SADC) and foster regional integration and trade. NRCP, which covers about 1,033 km of roads in Zambia, Malawi and Mozambique and two one-stop border posts, is being implemented in three Phases. In June 2009 Phase I was approved by the AfDB comprising a 348 km component in Mozambique and a 13 km bypass in Malawi. Phase II, which is being undertaken on an incremental basis covers 360 km of road works in Zambia from Luangwa to Mwami. Phase II of the Project in Zambia financed by the Bank covers 114.7 km at a cost of UA 69.471 million. Other Partners financing remaining sections of Phase II include the EU, EIB and AFD.The expected outcomes of the Project include; reduction of transport costs and improved accessibility of communities to social services and markets; and improved road safety. The development of the Nacala Road Corridor will also increase the volume of Zambian exports. In addition to enhancing trade and strengthening regional integration, the Project will contribute to poverty reduction in Zambia by improving accessibility of communities to markets and social services.

6.5.5.3 The Auditor General’s report covering technical, procurement and financial aspects of RDA’s activities for the period commencing January 2006 to September 2009 identified a number of shortcomings. An action plan to address the issues emerging from the audit report was developed by the Government in close consultation with Development Partners. The Nacala Road Corridor Project (NRCP), Phase II therefore includes an Institutional Support and Capacity Building component designed in response to the issues raised in the Auditor General’s report in procurement, project management and cost control.

6.5.5.4 Kazungula Bridge Project: The Kazungula Bridge is of strategic importance to the economic integration of the SADC region. The construction of the Kazungula Bridge will replace the existing ferry service over the Zambezi River and enhance transport operations along the regional North-South Corridor which links the mineral rich regions of Zambia, DRC, Botswana, Zimbabwe and the port of Durban in South Africa. The feasibility and detailed designs for the development of the Kazungula bridge and other infrastructure facilities have been completed. The project design took into account climate change,


gender and HIV/AIDS issues. An amount of UA 51 Million was approved by the AfDB Board for the Kazungula Bridge project on 7 December, 2011. Design reviews and the procurement processes will be carried out in 2012 while the construction of the Bridge is expected to commence in 2013.

6.5.6 Budget Support

6.5.6.1 PRBS III PCR: The Project Completion Report (PCR) was completed in May 2011. The programme achieved its development outputs and outcomes and was rated 3 and above. The lessons learnt include:

¢ The need to develop comprehensive results-based M&E systems across sectors to support results-oriented management.

¢ Lack of adequate data which tends to affect the quality of review and performance assessments.

¢ Clear and well-coordinated donor support mechanisms are important for attaining significant in-country policy dialogue.

¢ Consolidation of the different dialogue platforms established under the PRBS and JASZ MoU which continue to operate separately

¢ The need to jointly develop (Specific Measurable Attainable Relevant Time-Bound goals [SMART]) targets for both government and CPs.

¢ Need for the Bank and PRBS donors to align further in terms of disbursement.

Trucks line-up waiting to cross at Kazungula.


6.5.6.2 PRBS IV: This was approved by the Board in September 2011 for an amount of UA15.0 million. The components of the programme are: (i) improving the efficiency and transparency of the public financial management and increase revenue mobilization and (ii) enhancing access to social services. Disbursement of resources was scheduled for 2011 but was delayed until January 2012. The Bank will remain engaged in the PRBS programme in line with the PRBS Group.

6.6 Project Pipeline Development

¢ Based on ongoing country dialogue and ESW, pipeline development continued in 2011 with the following prospective projects entering the pipeline;

6.6.1 Wildlife Conservation and Game Ranching: Following a request by GRZ, a joint AfDB/ The International Union for Conservation of Nature (IUCN) mission visited Zambia in November, 2011 to undertake dialogue on the potential to develop an intervention for the conservation and development of the highly depleted wildlife reserves and for out-scaling game ranching. Zambia’s abundant wildlife resources provide a platform for a viable intervention. The mission encouraged GRZ to adopt conservation strategies that motivate the private sector to become engaged in wildlife conservation and development to restore the integrity of Zambia’s wildlife reserves. The mission recommended the need for three follow up studies:

¢ Assessment of the Institutional capacity needs of Zambia Wildlife Authority (ZAWA) for management of protected areas and Public Private Partnerships (PPPs) in wildlife conservation and development.

¢ Review of PPPs in relation to wildlife management in Zambia. The review may include a study tour of selected stakeholders to successful examples in neighboring countries.

¢ Baseline study of the potential of wildlife conservation for local communities in Zambia.

Wildlife Conservation Management.


6.6.2 Pilot Programme on Climate Resilience (PPCR): The GRZ has obtained resources from the Climate Investment Fund (CIF) to mainstream climate change and ensure sustainable economic development. A Special Programme on Climate Resilience (SPCR 2013-2020) was approved in October 2011 for USD 87million, with three strategic sub-projects:

¢ Strengthening Climate Resilience in Zambia and Barotse Sub-Basin (managed by World Bank).

¢ Strengthening Climate Resilience in the Kafue River Basin (managed by AfDB).

¢ Private Sector Support to Climate Resilience (managed by International Finance Corporation).

The implementing partners will be preparing detailed studies in readiness for appraisal and respective Board approvals of the managing partners.

Climate Resilience for sustainable economic development.

6.6.3 Comprehensive Africa Agriculture Development Programme (CAADP) - Global Agriculture and Food Security Program (GAFSP): Zambia is among the few African countries that have developed and signed a CAADP Compact in March 2011. GAFSP Trust Fund was established following commitments by the G8 Leaders at the L’Aquila Summit in July 2009, to provide initial resources to the implementation of the CAADP investment plan. It is hosted by the World Bank and co-managed by World Bank, IFAD and AfDB either of whom eligible countries can select to manage the resources. Zambia is in the process of preparing its CAADP Investment Plan. The AfDB looks to the CAADP as a source of pipeline projects in Agriculture during the SNDP.


6.6.4 Multi-Donor Water Partnership Programme (MDWPP): GRZ has requested the Bank through the AWF to finance a project to optimize the benefits from the use of existing small and medium dams through increasing water productivity for multiple uses. The Bank is therefore processing a project to (1) develop guidelines for investments in Water Storage Infrastructure (2) pilot and demonstrate guidelines by undertaking rehabilitation, adaptation and construction of new small dams and (3) update the water resources development plan and prioritise proposed water storage development projects.

6.6.5 Livestock Infrastructure Support Project (LISP): GRZ has requested the Bank to support the LISP in line with the goal of contributing to economic growth and economic diversification through increased livestock production and productivity and improved market linkages, and ultimately improve household income for livestock farmers in Muchinga, Northern and Luapula provinces. The project has been prepared but progress to appraisal will depend on availability of African Development Fund (ADF) resources.

6.6.6 Mpulungu Port Development: The road and railway network and the unexploited potential in the water ways provides plenty of space for sector infrastructure interventions and expansion. The government has expressed interest in the financing of the Mpulungu Port Development Project by the Bank. This Port Development project and the associated services would be developed as a regional project in conjunction with Burundi. Currently efforts are underway to source funds for the required detailed feasibility studies.

6.6.7 Itezhi-Tezhi Power Plant and Transmission Project: It consists of the construction, operation and maintenance of a 120MW base load hydro power plant at the Itezhi-Tezhi (ITT) dam on the Kafue River in Zambia with the intent of this transmission line evacuating the power to the proposed Mumbwa and Lusaka West substations. The power plant is to be supported by an ADF loan to finance the government shareholding in Itezhi-Tezhi Power Corporation (ITPC.) The transmission line project, supported by an ADF and a Nigeria Trust Fund (NTF) loan, will evacuate power from the ITT power plant through a 142Km; 220kV single circuit transmission line from ITT to a new substation at Mumbwa and a 145Km; 330kV double circuit line to Lusaka West substation. The power plant will be built at a total cost of $248 million whilst the transmission line costs approximately $113 million. The project will be reviewed by the ADF Board in February 2012. The Bank intends to support this project to the tune of UA 30 million (ADF) and US$10 million (NTF). It is expected that ADB will provide a non-sovereign loan to the power plant Special Purpose Vehicle (SPV) as part of the senior debt tranche.

6.6.8 Private Sector Initiatives:

¢ Identification of financial institutions that can access the Africa Guarantee Fund (AGF): The AGF will provide financial guarantees and related financial products which aim at improving access of African SMEs to


finance from the financial sector. An identification mission for potential clients in Zambia was undertaken by OPSM in May 2011.

¢ There is a large potential for funding infrastructure projects through Public Private Partnerships (PPPs). The Bank is in the process of tapping into this market through support to Itezhi-Tezhi Hydro Power Project. The Africa Legal Support Facility (ALSF) is also in the process of discussing provision of TA to the PPP Unit in the Ministry of finance and national planning.

¢ The Bank through FAPA is considering providing TA to the Zambia Development Agency (ZDA) to fund feasibility study reports and to strengthen the Unit in its marketing of potential investment projects (infrastructure projects).

6.6.9 Support to Zambian HEST Project: GRZ requested for support to the HEST project to the tune of UA 25 million. The Bank fielded identification and preparation missions in 2011. The project goal which is contribution to the improvement of the quality of Human capital development for employability in Zambia, will target higher institutions and also support a non-institution based skills training in collaboration with industries to bridge the current skills shortage gap in Zambia.

6.6.10 Study on Skills development in Zambia: Constraints and Prospects: The Bank is proposing this study which is designed to assess factors affecting skills development for job creation and economic growth for Zambia. The knowledge generated from the study will enhance the Bank’s leadership on policy dialogue, skills development and facilitate evidence-based intervention especially in the proposed Zambia HEST Project to ensure quality-at-entry. The Bank has requested co- funding from the Japanese Trust Fund for the proposed study and it has reached an advanced stage. The study is proposed for the second quarter of 2012.

6.7 Project Completion Reports (PCRs)

In 2012 the Bank will prepare PCRs for the following completed projects; (i) Enhancing Procurement Reforms and Capacity Project; (ii) Central Province Eight Centers Water Supply and Sanitation Project; (iii) PRBS IV; (iv) Emergency Flood Assistance and; (v) Small Scale Irrigation Project

Administrative Matters7The Bank has approved the construction of an office block for ZMFO and GRZ has been approached to provide land in accordance with the conditions of the Host Country Agreement signed between the Bank and GRZ.

7.1 Staff Training, Workshops, Seminars and Special Events

7.1.1 During 2011, ZMFO facilitated, hosted and participated in a number of workshops, seminars and special events. These forums provide a vehicle to exchange information and share knowledge and experiences. In certain cases the events provided the basis for bringing together stakeholders to provide improved understanding of procedures and legislation and establish a basis for best practices. Other workshops were held to disseminate information on the Bank Groups initiatives and programmes.

7.1.2 On the job training: In line with the Career Development Framework of the Bank Group, staff members of the country office participated in varied training programmes in order to gain and develop skills to better perform their respective jobs and acquire the requisite knowledge and competencies for learning and delivery of core tasks. A summary of training programmes and events is outlined in Annex IV.

7.1.3 Ethics Training: The Ethics Office conducted a national sensitization workshop for the Zambia Field Office from 18th to 21st November 2011. The Field Office was joined by participants from the Angola Field Office.


Ethics Training Participants

7.1.4 Team Building Retreat: The ZMFO team retreat was held from 15th to 17th February, 2011, at Chaminuka Lodge in Lusaka. The objectives of the session were to enhance team performance and increase staff understanding of their individual roles and responsibilities within the organizational context.


7.2 Human Resources

7.2.1 The Bank’s portfolio in Zambia improved through the hiring of a number of new staff. Mr. Herbert Chinokoro, joined as the Water and Sanitation Officer, Mrs. Chilala Chikuba-Watae joined as the Disbursement Assistant. The Bank has also recruited a Library and Information Specialist, Mr. Kennedy Wishimanga to run the Joint Development Information Centre (JDIC) with the World Bank. Mr. Mothobi Matila, Principal Macroeconomist relocated to ZMFO from the Bank HQs. A Consultant, Ms. Matilda Mutanguha was hired to support the ZMFO Aid Coordination and Policy Dialogue efforts.

7.2.2 At the end of 2011, Mr. Themba Bhebhe, Country Programme Officer, and Mr. Ashie Mukungu, Country Economist returned to the Bank HQs. In view of the growing portfolio, the Zambia office has requested for a Transport Specialist to be assigned and located in Lusaka.

7.3 Information Technology

7.3.1 2011 saw the birth of Unified Communications in the Bank. Unified Communications (UC) is not a single product, but a set of products that provides a consistent unified user interface and user experience across multiple devices

Team Building – Role play exercise


and media types. In the bank, Telephony, Video Conferencing and Electronic mail have all been integrated. For UC to be successfully implemented in the Field Offices a numbers of upgrades to the existing Local area networks had to be done.

7.3.2 Network Upgrade; ZMFO received a mission from the Bank’s infrastructure and telecommunications division. In collaboration with the IT assistant, several works were carried out: (i) replacement of active network devices with new ones that would be able to power the new IP phones over Ethernet. (ii) configuration of Quality of Service Policy on the routers to ensure bank applications especially Video Conferencing are given highest priority.

7.3.3 Very Small Aperture Terminal (VSAT) capacity expansion project; The VSAT antenna is the Field Office’s primary link to Temporary Relocation Agency (TRA) and the other field offices. In order for the field offices to all participate in simultaneous video conferences the bandwidth of various offices had to be increased. The increment was achieved by re-pointing the VSAT to a different satellite with a larger bandwidth. Annual VSAT preventive maintenance was undertaken and operating license renewed with local authorities.

7.3.4 WAN hybridization; At the close of 2011 ZMFO successfully implemented a last mile fibre optic solution and the leadership of the infrastructure and telecommunications division. The main thrust of the project was to lower the latency times thus increasing internet access speeds by x3, secondly with the new 2mbits link load, balancing was finally enabled. Load balancing routes all internet traffic to the local Internet Service Provider and all bank traffic to the secure bank wide area network. The third and final stage of the project will see the implementation of an end to end Virtual Private Network (VPN) link from ZMFO to TRA. Benefits for the end user include faster internet browsing and a touch less VPN connection.

7.3.5 Decentralization: As the Bank continues to decentralize more responsibilities are slowly devolving to the field offices. In 2011 AfDB’s Information Management Department (CIMM) delegated ZMFO IT assistant to represent the department in Harare where the Bank is setting up a new field office. The mission’s main task was to identify office space that was suitable for the new field office taking into consideration the banks requirements for installation network and telecommunications equipment.

7.3.6 Replacement of obsolete laptops: In order for staff to effectively contribute towards achieving deliverables of the Field Office and that of the Bank, they need to be equipped with modern and efficient computers. ZMFO received 8 new laptops pre-installed with windows 7 operating system and by the end of 2011, none of the staff was using obsolete equipment.

2012 promises to be an active year for the Bank’s operations in Zambia. In order to meet the growing expectations against the challenge of resource limitations, the Bank will need to adopt innovative partnerships to support Zambia’s development challenges. This will mean greater engagement in the policy dialogue, more efficiency in portfolio management, aggressive pursuit of aid coordination and co-financing targets and motivating staff to perform exceptionally and as a team.

Outlook for 20128


Annex I

Zambia - Profile of Macroeconomic Indicators8

Country Profile Macroeconomic Indicators, Zambia

2006 2007 2008 2009 2010

GNI per capita, Atlas method (current US$) 600.0 730.0 960.0 970.0 ..

GDP (current US$ millions) 10,702.2 11,541.4 14,704.7 13,390.9 ..

GDP (constant 2000 US$ millions) 4,350.7 4,620.2 4,881.3 5,193.7 5,538.9

Real GDP growth (annual %) 6.2 6.2 5.7 6.4 6.6

Real per Capita GDP Growth Rate (annual %) 3.8 3.7 3.1 3.8 4.1

Gross capital formation (% of GDP) 22.1 22.0 20.8 21.1 19.0

Gross national savings (% of GDP) 23.3 15.4 13.7 20.3 21.4

Agriculture, value added (% of GDP) 22.8 21.8 21.3 21.1 22.0

Industry, value added (% of GDP) 29.2 32.2 33.9 34.4 34.5

Manufacturing, value added (% of GDP) 11.6 11.2 10.4 10.0 9.8

Services, value added (% of GDP) .. .. .. .. ..

Exports of goods and services (% of GDP) 38.5 40.9 35.2 36.6 35.0

General government final consumption expenditure (% of GDP) 20.4 19.7 22.0 22.3 18.0

Household final consumption expenditure (% of GDP) 49.1 56.6 59.2 64.0 51.5

Imports of goods and services (% of GDP) 30.1 39.2 37.2 38.5 31.8

Industry, value added (annual % growth) 9.6 9.4 8.8 4.2 5.0

Manufacturing, value added (annual % growth) 2.9 5.8 3.0 1.8 2.5

Services, value added (annual % growth) 6.1 7.3 7.5 7.4 6.4

Central government, total revenue and grants (% of GDP) 43.6 23.0 22.3 18.9 15.1

Central government, total expenditure and net lending (% of GDP) 25.4 23.2 24.6 21.5 19.7

Central government, Fiscal Balance (% of GDP) 18.3 -0.2 -2.2 -2.6 -4.7

Money and quasi money (M2) as % of GDP 21.5 22.5 23.2 20.7 ..

Money and quasi money growth (annual %) 44.2 25.2 23.2 4.5 ..

Gross international reserves in months of imports 1.8 1.8 1.6 3.5 2.9

Gross international reserves (current US$ millions) 478.4 689.7 711.3 1,206.9 1,359.6

8 Source of Data: AfDB Data Portal


Annex IIZ

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Annex III

Cooperating Partners – Division of Labor Matrix(JASZ II Signatories)

Infrastructure

Human Development

Growth

Support

Crosscutting

EnergyTransportEducation & Skills DevelopmentHealthHIV & AIDSWater & SanitationAgriculture, Livestock & FisheriesManufacturing, Commerce & Trade (PSD)TourismEnvironment & Natural ResourcesGovernanceLocal Government &DecentralisationScience, Technology & InnovationGenderHousingMacroeconomicsSocial Protection

MEWD MWS/MCT MOE/MSTVT

MOH MOH MEWD/MLGHMACO

MCT/CO-DSC

MTENR MTENR

MOJ MLGH

MSTVT

CO-GIDD MLGH/MOLMOFNP MCDSS

AAA

LL

A

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B

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LLA

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A/PA/P

A/PA/P

A/P

A/P

-

L

L

L

B

A

B A

B/N3

A/PB

BL

AL

B/N

B A 2

L

L

AA

L BA3

LAA

BA/PAA

A

A/P

1

B/P

L/P

P

P

P

A/P

A/P 1

B/N

B/P

B/P A

A

A

A A

A/N-

L

AA A

B

BB/PA 1

B

LA

B/N

L

L

L LL6

A

LL

A/NA

A

A/N

A

A A 2

3L/1A2L/4A3L/5A

3L/4A3L/5A3L/4A3L/6A

2L/6A

1L/0A3L/4A

3L/6A1L/3A

0L/2A

3L/3A0L/0A3L/8A2L/2A

Lead Ministry

SNDP Cluster

AfDB

EU UN S

yste

m

Wor

ld B

ank

Cana

da

Denm

ark

Finl

and

Germ

any

Irela

nd

Japa

n

Neth

erla

nds

Norw

ay

Swed

en*

UK USA

Tota

l lea

d/ac

tive

AB/P

-Total Lead Responsibilities

LEGEND: DOL MAIN CLASS: L – Lead, A - Active, B – Background/Silent. SUB-CLASS: N – New Entrant, P – Phasing Out

*Sweden will develop new country strategy during 2012 and will revise participation in sector groups end 2012


Annex IV

Staff Training Details - Professional Level and General Support Staff


DATE

14 – 16 February

28 March – 8 April

18 – 19 April

18 April – 20 May

02 – 06 May

04 – 12July25 September – 1 October

28 – 30 November12 – 16 December

20 March – 4 May

28 March – 8 April

18 – 23 April

09 – 20 May

04 – 12 June01 – 09 August

04 – 12July05 -11 September

26 – 29 September28 November – 2 December03 – 04 November

08 – 11 November

ORGANISINGDEPARTMENT/ ORGANIZATION

CGSP

OWAS

OSAN.3

OSAN

ORPF

CHRM.3World Bank/ AfDB

ORVPORPF

FFCO

KVRC

CGSP

COBS/FFCO

SECU

CHRM.3SECU

CHRM

Prosoft Events Management

SolutionsSECU

TRAINING PROGRAMME

SAP MM Deployment to Field OfficesOrientation in Operational ProceduresTask Managers and Project Coordinators Interactive WorkshopOrientation in Operational ProceduresBasic Level – Procurement Rules and ProceduresOn boarding sessionsDebt Management Performance Assessment (DeMPA) Tool TrainingCPOs WorkshopAdvanced Procurement Training to enhance procurement staff in procurement management activitiesOrientation in OperationalProceduresOrientation in Operational ProceduresSAP MM Deployment to Field OfficesTraining sessions on 2012 – 2014 Programme & Budget PreparationDrivers Training Camp – Step up skills & Defensive DrivingOn boarding sessionsDFR Engineers Workshop on Integrated Technical Security SolutionsIntercultural Enhancement Training – Delivering as one through our diversitiesTop Class Executive Secretary and PA Skills ConferenceSecurity Training for Focal Points

LOCATION

Tunis, Tunisia

Tunis, Tunisia

Tunis, Tunisia

Tunis, Tunisia

Tunis, Tunisia

Tunis, TunisiaTunis, Tunisia

Tunis, TunisiaTunis, Tunisia

Tunis, Tunisia

Tunis, Tunisia

Nairobi, Kenya

Tunis, Tunisia

Entebbe Uganda

Tunis, TunisiaPretoria, South Africa

Pretoria, South AfricaTunis, TunisiaLusaka, Zambia

Tunis, Tunisia

NO.

1

1

1

1

1

12

21

1

1

1

1

2

21

8

2

1

Annex V

ZMFO – Staff List and Contacts

No.

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

Name

Dr Freddie Kwesiga

Maureen Wanga

Miriam Msuku

Christopher Banda

Patience Ugonma Ekoh

Lewis M. Bangwe

Mothobi Matila

Daniel Ohonde

Natan Jere

Namakau Katundu

Paul Machona

Kennedy Wishimanga

Herbert M Chinokoro

Chilala Chikuba-Watae

Matilda Mutanguha

Evans Mubanga

Peter Zulu

Job Title

Resident Representative

Secretary to the Resident Representative

Secretary/Receptionist

Senior Private Sector Officer

Senior Education Analyst

Senior Agricultural Officer

Principal Macroeconomist

Chief Country Programme Officer

Senior Procurement Officer

Finance & Administrative Assistant

IT & Telecom Assistant

Library and Information Assistant

Senior Water and Sanitation Officer

Disbursement Assistant

Donor Coordination Consultant

Driver to the Resident Representative

Field Office Driver

Tel: (260) 21 1 257868(260) 21 1 257869(260) 21 1 257874Fax: (260) 21 1 257872

BancABC House, 1st Floor 746 Church RoadCathedral HillPO Box 51449LUSAKA, Zambiawww.afdb.org


ZAMBIA FIELD OFFICE - African Development Bank · Zambia Field Office 2011 Annual Report 7 The year 2011 was a significant milestone for Zambia as it once more demonstrated that a

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