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World Bank, through the International Development Association (IDA), has approved approximately US$45 million in Development Policy Operation (DPO) financing to back Zambia’s macroeconomic reform agenda and strengthen resilience to climate and economic shocks.
The funding is part of the Second Zambia Climate and Economic Resilience Programmatic Development Policy Financing, a programme designed to support government policy and institutional reforms aimed at improving fiscal management, promoting private-sector investment, and enhancing disaster preparedness.
In a statement issued on Sunday, the World Bank explained that Development Policy Operations are budget-support instruments providing financial resources directly to governments implementing policy reforms to boost macroeconomic stability and improve the investment climate.
The statement said unlike project-based financing that targets specific infrastructure or sector projects, DPOs fund broader economic reforms, with disbursements made to national treasuries once agreed policy actions are implemented.
The approved operation will support Zambia’s reform programme through three key policy pillars.
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“The first pillar focuses on strengthening fiscal management and economic resilience. Measures under this pillar include reforms aimed at improving transparency in mineral revenue management, with treasury actions now requiring the disclosure of copper price assumptions and non-mining fiscal balances in national budget documents,” the statement read.
Additional measures include the introduction of a Credit Risk Assessment Framework to guide loan and sovereign guarantee management, as well as legislative steps to strengthen oversight of state-owned enterprises through the proposed State-Owned Enterprises Bill, aimed at optimising government investments while reducing fiscal risks.
These reforms come as Zambia continues efforts to stabilise its economy and advance external debt restructuring under the G20 Common Framework for Debt Treatment.
Commenting on the development, Situmbeko Musokotwane, Finance and National Planning Minister, said the approval reflects growing international confidence in Zambia’s reform agenda.
“The approval of this Development Policy Operation demonstrates continued confidence by our cooperating partners in Zambia’s economic reform programme. Government remains committed to maintaining fiscal discipline, strengthening resilience to climate-related shocks, and creating conditions that allow the private sector to expand investment and generate jobs for our citizens,” he said.
Musokotwane added that the reforms supported under the programme are intended to reinforce macroeconomic stability while positioning the country for sustained growth and improved livelihoods.
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