MINISTER of Finance and National Planning Situmbeko Musokotwane has dispelled public misconceptions surrounding loan costs, specifically clarifying that arrangement fees are standard banking charges and not bribes.
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The minister’s explanation comes in response to heightened public confusion and parliamentary questioning regarding the nature of these fees, particularly in light of Zambia’s increasing national debt.
Dr Musokotwane explained in a statement that an arrangement fee is a common charge in the banking sector, representing the cost a borrower pays to a lender for processing and setting up a loan.
He provided an example: “If you take a K1 million business loan with an arrangement fee of 2%, the fee will be K20,000, charged upfront or deducted from the amount you receive.”
“An arrangement fee is not a bribe, incentive or personal benefit to any official involved in negotiating the loan,” the minister said.
Dr Musokotwane described it through a statement that it is a standard, clearly stated fee in loan agreements typically paid upfront or deducted directly from the loan amount.
The clarification follows a parliamentary query yesterday from Nkana Member of Parliament Binwell Mpundu, who controversially asked whether the Finance Minister was personally benefiting from the loans that the country was obtaining after Dr Situmbeko Musokotwane presented the supplementary budget in Parliament.
Dr Musokotwane stressed that no ngwee from these fees goes into the pockets of any public official.
“Let it be known and understood that no ngwee is collected by any public official from a loan arrangement fee. The funds belong to lender institutions,” emphasised the minister
By George Musonda
Kalemba July 4, 2025
