LUSAKA, December 22, 2023 — Yesterday, the World Bank Executive Board of Directors approved the second operation in a programmatic series aimed at helping Zambia restore macroeconomic stability and debt sustainability and promote private-sector-led growth. The $125 million International Development Association (IDA) grant for the Zambia Second Macroeconomic Stability, Growth and Competitiveness Development Policy Financing (DPF)
builds on the success of the first DPF approved in October 2022. It is part of the World Bank’s multi-sectoral support to help Zambia emerge from the debt crisis and shift to a more sustainable and inclusive economic growth path.
"The second DPF demonstrates our commitment to supporting Zambia's efforts to emerge from the debt crisis and achieve a more sustainable and inclusive economic growth path. Through our multi-sectoral support, we aim to create opportunities for robust growth, strengthen the credibility of the public sector, and improve the poverty impact,“ said Achim Fock, Country Manager for Zambia.
The operation is underpinned by significant debt reduction consistent with the joint IMF-WB Debt Sustainability Analysis and steps the Government of the Republic of Zambia is taking to restructure its external debts. The focus will be on restoring fiscal and debt sustainability, increasing farmer productivity and access to agricultural markets, ensuring sustainable access to energy, and enhancing access to finance and private sector development.
The operation is part of coordinated support with Zambia’s development partners to promote critical structural reforms. Official external creditors and Zambia finalized a memorandum of understanding on the terms of debt restructuring in October 2023.
“It is important for development partners to continue their support as Zambia diligently pursues appropriate economic policies and makes good faith efforts to reach a collaborative agreement on debt treatment with its private sector creditors,” said Albert Pijuan Sala, Senior Economist for the World Bank in Zambia.
*About the World Bank. The World Bank provides financing, global knowledge, and long-term commitment to help low- and middle-income countries end poverty, achieve sustainable growth, and invest in opportunity for all. We comprise the International Bank for Reconstruction and Development (IBRD), the world’s largest development bank, and the International Development Association (IDA), one of the largest sources of funding for the world’s poorest countries. With the other World Bank Group institutions as well as partners across the public and private sectors, we are helping build solutions to the global challenges of the 21st century in all major sectors of development. A world where no one lives in poverty, and everyone has the opportunity for a better life is within our reach.