World Bank to commit over US$900 million to support Zambia’s recovery from the multiple debts
THE Ministry of Finance and National Planning has disclosed that the World Bank is committing approximately $959 million to support Zambia’s recovery from the multiple debt and economic crises.
And the Ministry says as soon as the International Monetary Fund (IMF) supported programme is approved, it is envisaged that the World Bank will supply funding amounting to US$275 million over the next three years.
In a media statement issued yesterday, Minister of Finance and National Planning Situmbeko Musokotwane said the funds will help to institute reforms for inclusive growth and poverty reduction.
Dr Musokotwane has also clarified that government has reached a Staff Level Agreement (SLA) with the International Monetary Fund barely three months after assuming office in August, 2021.
“Pledges by multilateral lenders to provide concessional financing to Zambia as part of the effort to resolve the country’s financing limitations based on the DSA results.Convening the OCC (mainly bilateral related lenders) to discuss Zambia’s request for debt relief under the G20 Common Framework for Debt Treatment. This action has commenced.
Convening, immediately after the OCC, a committee of Commercial Lenders (Eurobonds, Commercial Banks, and Private Lenders etc). This is pending completion of discussions by the OCC,” he said.
Dr Musokotwane said Government has regularly engaged both official creditors and private creditors who have been provided with economic policy and debt data, with a view to facilitate decision-making and successive meetings of the two creditor groups.
He said the Government has been engaging multilateral partners for concessional financing as part of the effort to resolve Zambia’s fiscal limitations.
“As announced before, the engagements have culminated in several benefits such as the pledge by the World Bank to support the national budget through a Development Policy Operation. As soon as the IMF Supported Programme is approved by the IMF Board, it is envisaged that the World Bank will supply funding amounting to US$275 million over the next three years,” he said
He further disclosed that U$$294 million has already been committed for scaling up social cash transfers and projects to strengthen the COVID-19 response, including vaccination and emergency health financing to improve service delivery.
“The remaining U$$665 million will be presented in three operations to the World Bank Board for approval within June 2022. The program includes two results-based operations, the first to reinvigorate growth in agriculture and support reform of the agricultural subsidy regime and the second to strengthen decentralized public service delivery while enhancing public financial management, accountability, and citizen engagement and will support the increased resource allocation towards Constituency Development Fund. The third operation will finance additional social protection spending in response to various shocks,” Dr Musokotwane said.
He said upon agreement of the country Assistance Strategy during the second half of 2022, financing is also expected from the Africa Development Bank (AfDB) over the next three years.
Dr Musokotwane said Government will continue to work tirelessly towards returning the country to a state of fiscal stability that will facilitate sustainable growth.
This article originally appeared on Mwebantu
Photo: Mwebantu