- October 28, 2022
- Posted by: Amos Ekow Coffie
- Categories: Banking and Finance, Economics
The World Bank has approved US$275 million in assistance to help Zambia recover from the effects of the Covid-19 pandemic and deal with the fallout from the war in Ukraine.
The money is to help Zambia, which is “over-indebted”, return to sustainable fiscal and debt levels and promote private sector-led economic growth, the World Bank (WB) said in a statement on Thursday.
The funds are made available by the International Development Association (IDA), a subsidiary of the World Bank that helps vulnerable countries through grants or credits at zero or very low interest.
In 2020, Zambia became the first African country to default on its external debt – estimated at $17.3 billion – since the start of the Covid-19 pandemic.
Lusaka had already received approval in September from the International Monetary Fund (IMF), the WB’s sister institution, for a total of $1.3 billion in financial support to help restructure its debt.
The accession to the presidency of Hakainde Hichilema, who was elected in 2021 on promises to root out rampant corruption and resuscitate the economy, has improved Zambia’s relations with its creditors and international donors.
the country’s debt had exploded under his predecessor, Edgar Lungu, who was criticized for taking out massive loans to finance a spate of infrastructure projects during his six-year presidency.
According to the latest IMF data, Zambia, which is one of the world’s largest copper producers, has seen its economy grow by 4.6% in 2021 after the 2.8% GDP contraction recorded in 2020.