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The World Bank Group has released the second tranche of its support for the Zambia Macroeconomic Stability, Growth and Competitiveness programme of US$100 million concessional credit.
This brings the group’s total support under this programme to US$740 million this year.
The credit is part of the World Bank’s US$275 million concessional development policy financing (DPF) for Zambia approved by the Board of Executive Directors on October 25 in support of Zambia’s reforms to restore fiscal and debt sustainability and promote private sector-led growth.
This latest support would bring total disbursements on concessional terms from the World Bank’s International Development Association (IDA) to Zambia to US$740 million during 2022.
This is according to a statement issued on Wednesday in Zambia’s capital Lusaka.
Zambia has continued to implement agreed structural policies toward macroeconomic stability even as there are protracted delays from official bilateral creditors to discuss and finalise debt treatment under the G20’s
Common Framework.
The Zambia Macroeconomic Stability, Growth and Competitiveness Programme were supporting the Government’s policy and institutional reforms aimed at: restoring fiscal and long-term debt sustainability, and increasing farmer productivity and access to agricultural markets.
It is also providing support in ensuring sustainable access to energy, and enhancing access to finance and private sector development.
Meanwhile, the Group has sounded an alert on Zambia’s rising debt coupled with interest arrears and penalty charges accumulating during the prolonged delays of the debt restructuring process.
Read more: IMF chief calls on China to speed up restructuring of debt for Zambia, Sri Lanka https://www.zambiamonitor.com/imf-chief-calls-on-china-to-speed-up-restructuring-of-debt-for-zambia-sri-lanka/
Group President David Malpass emphasised that Zambia urgently needed debt relief to restore medium-term debt sustainability and attract the new investment needed for growth and jobs.
Malpass pointed out that as Zambia entered its third year working toward a debt restructuring under the G20’s Common Framework, its debt burden continued to rise.
The debt, he said in a statement yesterday, continued to rise with interest arrears, late interest charges, and penalty charges accumulating during the prolonged delays.
World Bank Group President David Malpass
“The World Bank’s US$740 million of concessional disbursements to Zambia in 2022 are providing strong support, recognising the remarkable leadership by Zambian authorities to reduce the fiscal deficit and implement difficult
reforms.
“I remain deeply concerned by the slow pace of the creditors’ committee and the impact of the delays on growth and poverty,” Malpass said.
According to the Group, Zambia was in debt distress and urgently needed deep and comprehensive debt treatment in line with the Joint WB-International Monetary Fund (IMF) Debt Sustainability Analysis (DSA) that called for US$8.4 billion in debt relief in 2022-2025 and additional relief through 2031.
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