African development bank approves $108 million loan for Zambia

The African Development Bank Group's Board of Directors has approved a $108 million loan to Zambia to enhance the nation's economic governance and implement reforms in essential public sectors.

This funding will facilitate the Fiscal Sustainability and Economic Resilience Support Programme, a crucial component in efforts to create a robust and diversified economy in Zambia.

The programme aims to increase domestic revenue generation by supporting various initiatives, including the introduction of an electronic "smart invoice" system, registering 12,000 VAT-liable taxpayers, and Zambia's participation in the Global Forum on Transparency and Exchange of Information for Tax Purposes.

The program aims to boost Agro-industrial growth by supporting the agricultural mechanization strategy of the Ministry of Agriculture and establishing ten mechanization centres.

The goal is to enhance agricultural productivity and increase production to supply both national and international markets by providing rental equipment to farmers lacking access.

This initiative will help reduce dependence on the mining sector. Additionally, the project will assist the ministry with a financing mechanism focused on sustainable agriculture.

It plans to allocate at least 257 million kwachas (approximately $9.4 million) for the 2023-2024 agricultural season.

This market-driven initiative, managed by the private sector through financial institutions, offers customized funding in the form of agricultural inputs, particularly benefiting small and medium-sized farmers with limited access to affordable financing.

Additionally, the project will promote the efficiency and transparency of public spending by reinforcing the public investment management strategy.

By November 30, 2024, the African Development Bank Group's active portfolio in Zambia featured 24 projects, collectively valued at $872.3 million.