• Bank releases US$100 million for Zambia amid substantial delays in debt restructuring.
• The credit released is part of the World Bank’s US$275 million concessional development policy financing for Zambia
• Latest support will bring total disbursements on concessional terms from the World Bank’s IDA to US$740 million during 2022.

World Bank has released US$100 million concessional credit to Zambia amid substantial delays in debt restructuring.

In a statement, World Bank Group President David Malpass said the released credit is part of the Bank’s US$275 million concessional development policy financing (DPF) for Zambia approved by the Board of Executive Directors on 25thOctober, 2022.

Mr. Malpass stated that this in support of Zambia’s reforms to restore fiscal and debt sustainability and promote private sector-led growth.

He added that the latest support will bring total disbursements on concessional terms from the World Bank’s International Development Association (IDA) to Zambia to US$740 million during 2022.

“Zambia urgently needs debt relief to restore medium-term debt sustainability and attract the new investment needed for growth and jobs. Yet as Zambia enters its third year working toward a debt restructuring under the G20’s Common Framework, its debt burden continues to rise, with interest arrears, late interest charges, and penalty charges accumulating during the prolonged delays,” he said.
“The World Bank’s $740 million of concessional disbursements to Zambia in 2022 are providing strong support, recognizing the remarkable leadership by Zambian authorities to reduce the fiscal deficit and implement difficult reforms. I remain deeply concerned by the slow pace of the creditors’ committee and the impact of the delays on growth and poverty.” He added.
Mr. Malpass further said Zambia is in debt distress and urgently needs deep and comprehensive debt treatment in line with the Joint WB-IMF Debt Sustainability Analysis (DSA) that called for $8.4 billion in debt relief in 2022-2025 and additional relief through 2031.
In February 2021, the Government of Zambia requested a debt treatment under the G20’s Common Framework and launched fiscal and structural reforms to restore macroeconomic stability and reinvigorate growth.
He revealed that Zambian government has improved fiscal discipline, public financial management, and transparency, including in debt management and reporting.
“The Zambia Macroeconomic Stability, Growth and Competitiveness Program is supporting the government’s policy and institutional reforms aimed at restoring fiscal and long-term debt sustainability, increasing farmer productivity and access to agricultural markets,) ensuring sustainable access to energy, and enhancing access to finance and private sector development and Financing for this operation is provided by World Bank’s International Development Association,” he explained.