African Development Bank approves $108 million loan to bolster Zambia’s Economy

The African Development Bank Group (AfDB) has approved a $108 million loan to support Zambia’s efforts to enhance economic governance and implement vital reforms across public sectors.

The funding is part of the Fiscal Sustainability and Economic Resilience Support Program, aimed at building a more resilient and diversified Zambian economy.

The program will focus on boosting domestic revenue generation through measures such as introducing a digital “smart invoice” system and registering 12,000 VAT-liable taxpayers. Zambia will also deepen its participation in the Global Forum on Transparency and Exchange of Information for Tax Purposes.

To promote agro-industrial growth, the initiative will support Zambia’s agricultural mechanization strategy by establishing ten mechanization centres. These centres will provide rental equipment to farmers who currently lack access, helping to enhance productivity and increase agricultural output for both local and international markets.

The program will also allocate approximately 257 million kwachas ($9.4 million) for the 2023-2024 agricultural season. This private-sector-managed initiative will deliver tailored financing through agricultural inputs, particularly benefiting small and medium-sized farmers with limited access to affordable credit.

The reforms are designed to reduce Zambia’s reliance on the mining sector by strengthening its agricultural sector. Sustainable agriculture financing mechanisms will support farmers and contribute to diversifying the economy.

The program will also focus on enhancing the efficiency and transparency of public spending. This will involve reinforcing the country’s public investment management strategy to ensure effective allocation and utilization of resources.

By November 30, 2024, the AfDB’s active portfolio in Zambia included 24 projects with a combined value of $872.3 million. This latest loan reinforces the Bank’s commitment to supporting Zambia’s long-term economic growth and sustainability.

With these measures, Zambia aims to strengthen its economy, reduce sectoral dependency, and improve living standards for its population.