The funding, provided through the International Development Association, comes at a time when Zambia is grappling with high debt levels, slow economic growth and recurring climate shocks, including severe drought.
Finance and National Planning Minister Situmbeko Musokotwane said the approval signals renewed international confidence in Zambia’s reform agenda following the country’s successful debt restructuring process. “It reflects strong confidence in what Zambia is doing around its economic recovery,” he said.
Economist Trevor Hambayi told Channel Africa on Monday that the World Bank’s approval marks a major vote of confidence in the country’s macroeconomic reforms. He noted that Zambia’s return to international credibility follows its 2020 default and subsequent restructuring.
“The $45 million will support economic reforms, enhance fiscal discipline and increase transparency, especially in the mining sector,” Hambayi said.
The World Bank financing is designed to help Zambia strengthen its financial management, support private‑sector development and build resilience to climate shocks.
Hambayi said the country’s heavy dependence on hydroelectricity, accounting for 96 per cent of power generation, has left it vulnerable to drought. “One of the biggest climate challenges has been the drought. This financing will help Zambia invest in alternative energy sources, especially solar, to reduce that vulnerability,” he said.
Hambayi added that the programme could also help attract further investment into climate‑related and productive sectors. Zambia’s credit rating has improved from selective default to triple‑C, and the country has seen more than 2 billion dollars in annual mining investment since restructuring. “International confidence has increased, and this approval reinforces that confidence,” he said.
On the conditions attached to the support, Hambayi noted that Zambia has already implemented significant macroeconomic stabilisation measures under the IMF programme. Inflation has dropped from 23 per cent to 7.5%, the exchange rate has stabilised and gross domestic product growth has risen to 5.2%. “These are the benchmarks the World Bank is looking at in ensuring the financing is used effectively,” he said.
Looking ahead, Hambayi said Zambia must ensure economic growth translates into improved living standards. “Growth must trickle down to the ordinary Zambian. Poverty reduction and the cost of living are the key challenges that must be addressed,” he said.
–ChannelAfrica–
