afrol News, 6 March - The European Union (EU) and Zambia have signed a 225 million Euro ($283.1 million) poverty reduction financing package meant to offset the Southern African country's programme towards meeting the Millennium Development Goals.

Zambia is the first of seven African countries to sign the MDGs grant contract with the EU, others also expected to sign in the near future are Ghana, Rwanda, Uganda, Mozambique, Burkina Fasso and Mali.

EU commissioner for development aid Louis Michel and Zambia Finance Minister Situmbeko Musokotwane signed the agreement in Lusaka yesterday, explaining that it will help the country lift millions of its people out of poverty.

"The European Union has committed a grant of 225 million euros to the government of Zambia for a period of six years to support the country's efforts to improve efficiency and its poverty focused public programmes," the EU explained statement said.

Mr Michel said Zambia faced huge challenges because of the financial crisis, which adversely affected the country's copper production.

"I firmly believe that this aid modality is a powerful tool to strengthen national systems, ensure full ownership, guarantee predictability, and improve domestic accountability by involving parliament and civil society," he said.

The International Monetary Fund also this week pledged its readiness to increase balance of payments support to Zambia to help it deal with the effects of falling copper prices and the global economic slowdown.

Economic growth in Zambia has been reported to be slowing down as a result of the global financial crisis, the IMF has said.

"The mining sector, a mainstay of the Zambian economy, has been hard hit by the sharp fall in copper prices since mid-2008, which has resulted in cutbacks in production and the scaling back or suspension of expansion projects. Sectors with links to the copper industry are also being adversely affected, as are other sectors facing weaker external or domestic demand," said Francesco Caramazza, who was in Zambia heading the IMF mission.

By staff writer

© afrol News

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