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World Bank Group (WB) president, Ajay Banga, says the debt treatment agreement agreed by Zambia’s official creditors Committee will help unlock private sector investment, restore growth and accelerate job creation in the country.
Banga said an agreement, which was consistent with the Joint WB-International Monetary Fund (IMF) Debt Sustainability Framework, represented a critical milestone toward restoring debt sustainability in Zambia.
“The World Bank Group welcomes the agreement by the Official Creditors’ Committee under the G20 Common Framework on the key parameters of the debt relief for Zambia.
“This decision and final completion of the agreement will help unlock private sector investment, restore growth and accelerate job creation in Zambia,” he said in a statement on Friday.
Read more: Debt restructuring deal holds bright prospects for Zambia’s economy —Chamber of Commerce
He said since the start of Zambia’s negotiations under the G20 Common Framework in early 2021, the World Bank Group had disbursed around US$1.1 billion to Zambia on highly concessional terms to support reforms and critical service delivery across sectors.
Bangalore said starting July 1, 2024, Zambia would be eligible to receive World Bank support in the form of grants under International Development Association (IDA) 20.
“The World Bank remains committed to accelerate the implementation of the G20 Common Framework.
“The World Bank, as a co-chair of the Global Sovereign Debt Roundtable, also remains engaged with all stakeholders to improve processes and build consensus on technical issues to accelerate debt restructurings,” he said.
In a different reaction, the Zambia Chambers of Commerce and Industry (ZACCI) also predicted a reboot of a private sector-driven economy following the recent debt treatment deal clinched by government with its official creditors.
ZACCI, through its president Chabuka Kawesha, believes that the reported development would trigger increased local and foreign investor confidence and positive sentiments in Zambia’s economic roadmap.
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