The African Development Bank (AfDB) has approved a $108 million loan for Zambia to support a comprehensive program aimed at strengthening the country’s economic governance and implementing reforms across key public sectors.
The loan will fund the Fiscal Sustainability and Economic Resilience Support Programme, a vital initiative designed to bolster Zambia’s economic resilience and diversify its economy away from its heavy reliance on the mining sector. The program will focus on improving fiscal management, encouraging private sector investment, and driving agro-industrial development.
Raubil Durowoju, the AfDB’s Country Manager for Zambia, explained that the multi-sectoral program is set to enhance fiscal sustainability and promote greater participation from the private sector, particularly in agro-industrial development, climate-resilient investments, and the growth of small and medium-sized enterprises (SMEs).
“Through this initiative, we aim to transform Zambia’s economic landscape by fostering a more diversified and sustainable economy,” Durowoju said.
A key component of the program is the implementation of measures to improve domestic revenue generation. These include the introduction of an electronic “smart invoice” system to streamline tax collection, the registration of 12,000 VAT-eligible taxpayers, and Zambia’s active involvement in the Global Forum on Transparency and Exchange of Information for Tax Purposes. These efforts will enhance the country’s tax administration and help improve fiscal management.
The program also aims to boost public sector efficiency and transparency by supporting Zambia’s public investment management strategy. This will ensure that public funds are allocated and spent in a way that maximizes returns on investment.
In addition, the AfDB’s support will help drive agro-industrial growth. The program includes backing for Zambia’s agricultural mechanization strategy, which aims to establish ten mechanization centers across the country. These centers will provide smallholder farmers with access to essential farming equipment, thus increasing productivity and enabling farmers to meet both domestic and international market demands.
The initiative will also facilitate a financing mechanism for sustainable agriculture, providing at least 257 million kwachas (approximately $9.4 million) for the 2023-2024 agricultural season. Through partnerships with private financial institutions, the program aims to offer tailored funding to small and medium-sized farmers who have limited access to affordable credit.
With this loan, the AfDB reaffirms its commitment to supporting Zambia’s development objectives. As of November 30, 2024, the bank’s active portfolio in Zambia includes 24 projects, valued at a total of $872.3 million.