African Development Bank Approves $108 Million Loan to Zambia for Economic Governance and Reforms

African Development Bank Group’s Board of Directors, Photo: @AGCNewsNet

December 12, 2024 Hour: 5:44 pm

The Board of Directors of the African Development Bank Group has approved a significant loan of $108 million to Zambia aimed at enhancing the nation’s economic governance and implementing essential reforms across key public sectors.

The funding will support the Fiscal Sustainability and Economic Resilience Support Programme, which is a vital part of efforts to establish a robust and diversified economy in Zambia.

The programme’s primary objective is to increase domestic revenue generation through various initiatives. Key components include the introduction of an electronic “smart invoice” system, registering 12,000 VAT-liable taxpayers, and facilitating Zambia’s participation in the Global Forum on Transparency and Exchange of Information for Tax Purposes. These measures are designed to improve tax compliance and enhance revenue collection.

In addition to fiscal reforms, the programme aims to boost agro-industrial growth by supporting the agricultural mechanization strategy outlined by the Ministry of Agriculture. This includes establishing ten mechanization centers that will provide rental equipment to farmers who currently lack access. By enhancing agricultural productivity, the initiative seeks to increase production levels sufficient to meet both national and international market demands, thereby reducing dependence on the mining sector.

Lusaka High Court has upheld a decision by Competition and Consumer Protection Tribunal to hold Atlas Mara liable for failure to inform a client on changes to his loan terms that were necessitated by change in monetary policy rate by central bank.

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— Zambia Daily Mail (@zadama24) December 11, 2024

Furthermore, the project will assist the Ministry of Agriculture with a financing mechanism focused on sustainable agriculture. It plans to allocate at least 257 million kwachas (approximately $9.4 million) for the 2023-2024 agricultural season. This market-driven initiative will be managed by private sector financial institutions, offering customized funding solutions in the form of agricultural inputs, particularly benefiting small and medium-sized farmers who have limited access to affordable financing.

Additionally, the project aims to promote efficiency and transparency in public spending by reinforcing public investment management strategies. As of November 30, 2024, the African Development Bank Group’s active portfolio in Zambia included 24 projects with a total value of $872.3 million.

This comprehensive approach not only addresses immediate economic challenges but also lays a foundation for sustainable growth and development in Zambia’s economy.