Zambia’s economy impressive – World Bank

The World Bank says it is happy with the state of Zambia’s economy because inflation has dropped and the kwacha has stabilized.

At a media briefing on government’s discussions with the bank at Ministry of Finance today, World Bank Africa Group One Executive Director Andrew Bvumbe also said he was also happy with government’s discussions with the International Monetary Fund (IMF).

“We are here to consult with you, to get your priorities and to understand what the government of Zambia wants from the World Bank and we are happy with what we have discussed…The issue of rural poverty, I think it is fundamental for us to make a difference to the rural community. Agriculture for us is going to be important, increasing productivity in the rural areas, moving away from subsistence farming to commercial farming in these rural areas and connecting them to markets is going to be important for us. Also, we welcome the priority you have put on connectivity, rural connectivity, I think this is going to be important moving forward in terms of what impacts these areas,” Bvumbe said.

“So we are delighted and we are happy with the fundamentals, the way the economy is going, we have seen inflation is down, the kwacha is stabilized, so for us, these are key fundamentals. We are also happy with the discussions, we have been briefed on how the discussions with the IMF are going and really we are very delighted that on the policy aspect, we are converging with the IMF and this is important for us to move forward and I would like to congratulate the government on this major step of discussing and almost concluding with the IMF and we are looking forward to the conclusion with the IMF. So broadly speaking, I am happy to be here, I am happy with the update I have gotten from the minister on the economic front, the macroeconomic fundamentals are good, so I think we have a good foundation to move forward and make a difference in Zambia for the ordinary Zambian.”

He said the World Bank agreed with government’s priority areas like agriculture, connectivity and rural development.

“Also, we welcome the focus on energy and agri business, I think that is where we can create the jobs, and that’s where we can create the growth in the economy which is led by the private sector and also taking into account the agriculture which Zambia has a huge potential. I think now we have to move from potential to delivery, we have been talking about ‘Africa has potential’ but I think now, my focus will be on delivery, I think this is going to be critical for us. So we are here to discuss the priorities and the initial discussions have gone very well, I think we are converging on the priorities with the minister and government and I think as we discuss the country partnership framework going forward, we are looking forward to concretising on these issues and the programming,” said Bvumbe.

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And Finance Minister Felix Mutati assured the World Bank that their resources would be used effectively by channeling them to specific areas of need rather than spreading them across the country.

“The resources that we are accessing from the World Bank must result in the transformation of some of our key challenges such as poverty, job creation and creating a platform where we can have more inclusive growth. So the resources now are going to be more concentrated in areas where the incidents of poverty is highest so that all the sector resources whether it is in education, energy, in agriculture or in road infrastructure now begin to be put to deal much more specific rather than sprinkling the resources across the country. So the World Bank resource will be, for lack of a better word, designated to specific areas and we shall use our budget and support for our cooperating partners for support to the rest of the country,” Mutati said.

Mutati also highlighted some of government’s key projects with the World Bank.

Finance Minister Felix Mutati shakes hands with World Bank delegate Andrew Ndaamunhu Bvumbe at his office in Lusaka on July 27, 2017 – picture by Tenson Mkhala

“We are very excited to host the executive director coming into Zambia at a time when the economy has began to stabilize, when the fundamentals are cheerful, the programmes that we have got with the World Bank, perhaps one of the biggest programmes we have got, $1.2 billion in terms of potfolio and through the executive director, we have received commitment that the support to Zambia under IDA 18 is going to be elevated and more resources will be given to Zambia to the extent of $600 million of which approximately $150 million will be in the form of budget support. With this volume of resource, we give you our commitment in terms of absorption capacity, in terms of ensuring that the various programmes that we are going to undertake will be as effective as possible. Three of the most critical programmes that we have undertaken with the bank is one in agriculture, we have approximately $255 million to support among others irrigation and agri business,” said Mutati.

“The second key programme is in energy approximately $208 million, again, to support the delivery of energy in the country. we are within the context of [International Development Association] IDA 18 concluding $200 million that will be dedicated to address the challenges that we have got in rural roads, infrastructure development that is going to support agriculture.”

Mutati also reminded Bvumbe about Zambia’s offer to host the IDA replenishment meeting in November saying the country was the best destination.

         

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