Zambia
World Bank approves US$ 140 million credit for Zambia

afrol.com, 28 June - The World Bank has approved a US$ 140 million credit to assist the government of Zambia maintain economic stability and reduce poverty. 

The Fiscal Sustainability Credit will support Zambia's reform program that seeks to reduce poverty by restoring macroeconomic stability, promoting sustained and diversified growth, improving governance and enhancing the delivery of vital social services. The credit has two major components: reduction of the overall public sector deficit and improvement of fiscal management in Zambia. These components will support measures to: 

· Reduce the deficits of several state-owned enterprises, of the Bank of Zambia, and of the pension system; and,
· Improve budget management by supporting measures to increase predictability, accountability and transparency in public spending.

Following two successive years of economic growth in 1996 and 1997, the economy slowed down in 1998 due to a combination of internal and external shocks. Much of this slowdown can be attributed to weak performance in the copper mining sector, in particular to operational and financial problems at the copper parastatal, Zambia Consolidated Copper Mines which was privatized in March 2000. The credit will support the government's reforms, which will help restore macroeconomic stability, accelerate economic growth and improve the impact of public expenditures on the poor. 

The Fiscal Sustainability Credit will be financed by a US$ 140 million credit from the International Development Association, the World Bank's lending arm for the poorest countries. The IDA credit is on standard terms of 40 years maturity, including 10 years grace.

Sources: Based on World Bank

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