The Board of Directors of the African Development Bank Group approved a loan of $108 million to Zambia for an initiative aimed at strengthening the country's economic governance and implement reforms in key public sectors.
The funds allow the implementation of the Fiscal Sustainability and Economic Resilience Support Programme which is a key pillar in efforts to build a resilient and diversified Zambian economy.
"This is a multi-sectoral programme designed to improve fiscal sustainability and increase private sector participation in the economy, with a particular emphasis on agro-industrial development, climate-smart investments, including public-private partnerships, and the development of micro, small and medium enterprises," said Raubil Durowoju, the African Development Bank's Country Manager for Zambia.
The programme targets improving the generation of domestic revenue via support for the implementation of several measures: the roll-out of the electronic "smart invoice" solution and registration of 12,000 taxpayers liable for VAT, and the country's membership of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The project will also support the efficiency and transparency of public spending by backing the public investment management strategy to further boost the public investment management framework.
In addition, the programme intends to stimulate agro-industrial development for economic growth by lending support to the agricultural mechanisation strategy implemented by the Ministry of Agriculture, and the establishment of ten mechanisation centres. The objective here is to improve agricultural productivity, increase production and supply national and international markets, by making equipment available for hire to farmers who do not have access to it. This would enhance the diversification from the reliance on mining industry.
The project will also provide support to the ministry through a financing mechanism for sustainable agriculture. It will disburse at least 257 million kwachas (about $9.4 million) for the 2023-2024 agricultural season. This is a market-based initiative - administered by the private sector through financial institutions - which provides tailored funding in the form of agricultural inputs to the farming sector, particularly to small and medium-sized farmers who have limited access to affordable finance.
As of 30 November 2024, the African Development Bank Group's active portfolio for Zambia comprised 24 projects totalling $872.3 million.
