The European Union – EU has extended €12 million as its immediate-term contribution to the Covid-19 response in Zambia.
And in another development, the Swedish Government has scaled-up resources under the current Sweden-Zambia Development Cooperation with a grant of US$12 million. The funds are tied and are to be utilized for health, social cash transfer, nutritional programmes and sexual and reproductive health programmes.
According to a letter received by Finance Minister Dr. Bwalya N’gandu from the EU Head of Delegation to Zambia Dr. Jacek Jankowski, the EU’s planned immediate contribution to the Covid-19 response in Zambia consists €2 million grant under the EU Global initiative for Covid-19. The funds are for procurement of essential medicines and related commodities.
These funds will be channelled towards strengthening health systems and addressing the social and economic impact of the Covid-19 pandemic in Zambia.
Dr. N’gandu disclosed that future additional support expected from the EU, include €96 million blended facility from the European Development Fund (EDF) and the European Investment Bank (EIB) to facilitate increased access to finance by private sector players in the agriculture and renewable energy sectors.
He added that further, there is €6.3 million grant for eligible Civil Society and Non-Governmental Organisations, for children and youth protection programmes and K402 million projected grants fom EU member states through new allocations and reprogramming of existing allocations for the benefit of water and sanitation service programs and, strengthening prevention, health, and social protection systems.
In a statement made available to the Zambian Business Times- ZBT by the Finance Ministry’s spokesperson Chileshe Kandeta, the Minister has welcomed the remarks rendered by Dr. Jankowski that the success of the reforms that Zambia has embarked on to ensure debt sustainability and restore the viability of key sectors such as energy, is crucial in unlocking direct foreign investment and expanding opportunities for the country to benefit from international financial assistance.
Dr N’gandu has pledged that, together with his senior management team and the rest of the staff, the Ministry of Finance is ready to engage the EU in exploring ways in which Zambia can further access facilities using the options already available under the on-going EU-funded programmes or through other possible facilities and means.
Dr Ng’andu welcomed the proposal from the EU for the Zambian Government to make the most of potential new multilateral emergency support as well as the recent G20 initiative on debt relief.
Through the World Bank, Sweden has also upscaled its social cash transfer contribution to US$6 million. And through UNICEF US$1 million has already been disbursed by Sweden for the fight against the Covid-19 pandemic.
Further, Sweden has also extended direct financing support to Zambia’s Covid-19 multi- sectoral plan with support amounting to US$ 3 million.
Dr. Ng’andu pointed out that the directorates of finance and audit units in all Ministries, Provinces and spending Agencies are the principal custodians of rules and regulations as contained in the Public Financial Management Act and these should ensure probity in the use of the funds.
Zambia is currently shortlisting for selecting financial advisors to aid in the restructure of its national debt held with both bilateral and multilateral foreign lenders. The perpetual depreciation of the Kwacha has led to the strain on the treasury on debt servicing obligation for foreign currency denominated debt.
Once successfully executed, the restructuring of the debt is expected to create enough fiscal space to enable the country complete its massive infrastructure projects, some of which compose of rural schools, universities and road projects at over 70% completion rates.
