Zambia to borrow $108 million from AfDB after loan amendment

The Zambian government plans to borrow US$108 million from the African Development Bank (AfDB) to finance its 2024 expenditure, following an amendment to an earlier loan approved by Parliament.

On Tuesday, December 17, 2024, Parliament approved a motion to adopt the Planning and Budgeting Committee’s report on the 2024 Annual Borrowing Plan Second Amendment.

The amended loan replaces the $150 million approved on December 23, 2023.

Finance and National Planning Minister, Dr. Situmbeko Musokotwane, informed Parliament that the loan terms had been revised to include a longer grace and repayment period.

“The grace period has been increased from 5 years to 8 years, and the repayment period extended from 10 years to 25 years. Additionally, the interest rate has increased from 5 percent to 5.65 percent,” Musokotwane said.

He emphasized that the amendments reflect the New Dawn Administration’s commitment to prudent debt management.

“I want to express my happiness and profound gratitude that Members of Parliament have adopted the report,” Musokotwane added.

However, Kamfinsa Constituency lawmaker Christopher Kang’ombe urged the government to prioritise alternative means of raising funds domestically to reduce reliance on borrowing for national budgets.

“The government intends to borrow $1.4 billion externally and K15.5 billion internally in 2025. There is a need to engage in tax reforms to broaden the tax base, improve tax compliance, and enhance collection efficiency,” Kang’ombe stated.

He also called for economic diversification to boost revenue from sectors such as agriculture, tourism, and manufacturing.

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