The African Development Bank Group has approved a significant loan of $108 million to Zambia aimed at enhancing the country’s economic governance and implementing essential reforms across key public sectors.
This funding is a vital part of the Fiscal Sustainability and Economic Resilience Support Programme, which seeks to foster a robust and diversified economy in Zambia.
Objectives of the Loan
The primary goal of this programme is to boost domestic revenue generation through various initiatives.
Key components include the introduction of an electronic “smart invoice” system, the registration of 12,000 VAT-liable taxpayers, and Zambia’s involvement in the Global Forum on Transparency and Exchange of Information for Tax Purposes.
Additionally, the programme aims to promote agro-industrial growth by supporting the Ministry of Agriculture’s agricultural mechanization strategy.
This involves establishing ten mechanization centres to enhance agricultural productivity and increase production capacity, enabling farmers to access rental equipment that will help them meet both national and international market demands.
This initiative is designed to reduce Zambia’s reliance on the mining sector while providing a financing mechanism focused on sustainable agriculture.
For the 2023-2024 agricultural season, at least 257 million kwachas (approximately $9.4 million) will be allocated to support these efforts.
Market-Driven Approach
The project adopts a market-driven approach, managed by the private sector through financial institutions, offering tailored funding solutions in the form of agricultural inputs.
This strategy particularly benefits small and medium-sized farmers who often struggle to access affordable financing.
In addition to supporting agricultural initiatives, the project aims to enhance the efficiency and transparency of public spending by strengthening public investment management strategies.
Current Portfolio in Zambia
As of November 30, 2024, the African Development Bank Group’s active portfolio in Zambia includes 24 projects valued at a total of $872.3 million.
This latest loan underscores the bank’s commitment to supporting Zambia’s economic development and governance improvements.
Through this financial assistance, the African Development Bank aims to help Zambia navigate its economic challenges while laying the groundwork for sustainable growth and development in the future.
