AfDB Approves $108 Million Loan to Boost Zambia’s Economic Reforms

The African Development Bank (AfDB) Group has approved a $108 million loan to Zambia to enhance economic governance and implement critical public sector reforms.

This new funding increases the AfDB’s active portfolio in Zambia to $872.3 million, comprising 24 projects as of November 30, 2024.

The loan will finance the Fiscal Sustainability and Economic Resilience Support Programme, a key initiative aimed at fostering a resilient and diversified Zambian economy. The AfDB Group Board of Directors announced the approval in a statement issued in Lusaka.

Raubil Durowoju, the AfDB’s Country Manager for Zambia, described the programme as a multi-sectoral effort to improve fiscal sustainability and stimulate private sector participation in the economy.

“This programme is designed to enhance fiscal sustainability and increase private sector involvement, with a focus on agro-industrial development, climate-smart investments, public-private partnerships, and the growth of micro, small, and medium enterprises,” Durowoju stated.

The programme seeks to boost Zambia’s domestic revenue generation and fiscal transparency. Notable measures include:

• Introducing a “smart invoice” system to modernize tax collection and improve compliance.
• Registering 12,000 new VAT taxpayers to broaden the tax base.
• Strengthening Zambia’s membership in the Global Forum on Transparency and Exchange of Information for Tax Purposes, ensuring adherence to international standards for tax transparency and data exchange.

These reforms aim to attract private sector investment, particularly in agro-industrial and climate-smart sectors, identified as vital drivers of economic diversification.

Durowoju emphasized the programme’s role in laying the groundwork for long-term economic growth. “By focusing on private sector development and climate-smart investments, this initiative supports Zambia’s efforts to build a more resilient and inclusive economy,” he said.

The loan approval reflects the AfDB’s continued commitment to Zambia’s reform agenda, which prioritizes fiscal discipline, economic diversification, and inclusive growth.

This funding represents a significant step forward in Zambia’s journey toward sustainable economic development, creating opportunities for private sector growth and fostering resilience in key sectors.