The World Bank has approved US$275 million concessional financing for Zambia. This follows the Government’s continued engagement with development partners targeted at securing support for fiscal stabilization and accelerated economic growth programmes.
The approval was granted through the World Bank’s International Development Association (IDA), at a meeting of the board held on Tuesday, 25th October 2022.
The IDA’s Development Policy Credit is not only intended to help Zambia recover from the COVID-19 pandemic and negative effects of the war in Ukraine, but also targeted at assisting the country to emerge from the debt crisis and shift development focus to a more sustainable and inclusive growth path.
The Development Policy Credit will mainly support the Government’s post-COVID recovery and inclusive growth agenda by supporting policy and institutional reforms that aim to;
1) Restore fiscal and debt sustainability;
2) Increase farmer productivity and access to agricultural markets;
3) Ensure sustainable access to energy; and,
4) Enhance access to finance and private sector development.
These reforms are the foundation for the Government’s development aspirations reflected in the pillars of the Eighth National Development Plan (8NDP), and support our efforts to achieve comprehensive debt restructuring under the G-20 Common Framework.
The financing will be disbursed in two tranches. Given the urgency of the situation, the first tranche of US$175 million in support of completed reforms will be available immediately after the signing the Financing Agreements and fulfilment of withdrawal formalities.
The second tranche of US$100 million will be disbursed in the next three months to allow the Government additional time to complete key components of the reform program.
The development project terms are highly concessional with a grace period of 5 years and a maturity period of 30 years.
The acquisition of the financing is part of the Annual Borrowing Plan approved by Parliament in fulfilment to the provisions of the Public Debt Management Act of 2022.
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(Statement issued by Dr. Situmbeko Musokotwane, MP, Minister of Finance and National Planning)
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