The funding, provided through the International Development Association (IDA), is part of the Second Zambia Climate and Economic Resilience Development Policy Operation (DPO), aimed at stabilising the economy and supporting long-term growth.
Zambia’s finance ministry said the programme is anchored on three pillars: improving fiscal management, supporting private sector-led growth, and strengthening climate and disaster risk resilience.
Finance Minister Situmbeko Musokotwane said the approval signals continued backing from international partners following Zambia’s recent debt restructuring and reform efforts.
“The approval of this Development Policy Operation demonstrates continued confidence by our cooperating partners in Zambia’s economic reform programme,” he said.
Zambia has been rebuilding credibility since its 2020 sovereign default, which triggered a prolonged debt crisis. The country has since secured an IMF-supported programme and restructured its external debt, helping restore investor confidence.
Economic indicators are beginning to improve. Public debt is projected to fall from about 133 per cent of GDP in 2023 to around 90.7 per cent by 2025, while growth is expected to average about 6.5 per cent over 2026–2027. Inflation has eased and the exchange rate has stabilised, reflecting tighter policy measures.
However, structural risks remain. Zambia’s heavy reliance on hydropower, about 96 per cent of generation, has left it exposed to drought, which continues to disrupt energy supply and economic activity.
The World Bank funding is expected to support reforms to public financial management, improve transparency in key sectors such as mining, and encourage investment, including in alternative energy.
Source: Africabusinessinsider