27 December 2012

President Kaberuka Discusses Development Opportunities and Challenges in Zambia

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African Development Bank President Donald Kaberuka met with cooperating partners and ambassadors in Lusaka on December 21 to discuss development opportunities and challenges in Zambia.

Kaberuka indicated that he particularly wanted to gain feedback on whether the new Bank Strategy was relevant to address the emerging challenges of rapid growth in the midst of high levels of poverty.

The Bank is focused on infrastructure, regional integration, the private sector, fragile states and governance. However the Bank is also concerned about the growing inequalities and weak institutions in Africa. The new Bank strategy underscores the need to maintain strong economic growth which is sustainable and broadly shared.

The Bank is also working to address the challenge of how Africa could respond to the challenges of climate change, sustainable exploitation of the rich natural resource base for broad-based growth. The AfDB is also trying to better understand the developments in capital markets, domestic debt management capabilities and how to invest borrowed resources wisely. In this regard, Zambia posed an interesting case study because of its dependence on copper, and its recent successful issuance of a Euro bond.

The cooperating partners concurred with the dilemma of Zambia's attainment of Middle Income Country status in the midst of high poverty and deteriorating human development indicators. The cooperating partners felt that Zambia needs to be assisted in its successful transition to MIC status through infrastructure development, regional integration, diversification and income distribution. This can be achieved if the current policy inconsistencies, especially with regards to agriculture, are addressed, they noted.

Clear policies and strategies are required to reach the rural poor, through subsidies, social safety nets and cash transfers to enable the very poor to access health, education and social services, the cooperating partners commented. Furthermore, clear policies and strategies are also required to motivate, encourage and stimulate private sector growth for job creation. The main interventions are predictable policies and improved business environment.

AfDB is expected to assist land-linked countries like Zambia to develop policies and strategies to become regionally integrated through interconnectivity for regional trade and investment flows, Kaberuka heard. The work of AfDB is noble and well understood. However, the cooperating partners indicated that Africa's problems can only be fully understood and addressed if CSOs, private sector and other stakeholders, beyond Governments, are engaged in the development dialogue.

In conclusion, the President cautioned that subsidies for the poor should not compromise the progress of growth and investment. He also noted that while political commitment to regional integration was evident in the region through treaties and agreements signed, implementation remains weak. He highlighted the important linkages between an improved infrastructure base, and social inclusion and empowerment of the poor. He challenged the cooperating partners to collaborate on resolving these issues.

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