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The African Development Bank Group (AfDB) has announced its commitment to provide approximately $150 million in budget support to Zambia following the successful completion of the country’s debt restructuring program. AfDB President, Dr. Akinwumi Adesina, confirmed this during his two-day official visit to Zambia, where he met with President Hakainde Hichilema to discuss further support for the nation.
Zambia recently achieved a significant milestone by completing a $6.3 billion debt restructuring program for bilateral debtors, conducted under the G20 Common Framework on debt treatment.
President Hichilema acknowledged the progress made with official creditor debt but highlighted the need to address debts owed to local and external commercial creditors, including Eurobond holders. He emphasized the desire to unlock growth and prosperity for the Zambian people after facing significant debt challenges.
Adesina congratulated the Zambian government on reaching an agreement with its bilateral creditors, which sets the country on the path to economic recovery and sustainable debt management. He commended President Hichilema for instilling hope and confidence in the economy, paving the way for increased investments and prosperity.
As part of its support, AfDB is considering an initial budget support of up to $150 million for approval by its board of directors. Additionally, the bank will provide advisory support through the Africa Legal Support Facility (ALSF) to assist Zambia in renegotiating the terms and conditions of debt with private external creditors.
The Bank will offer technical and advisory assistance in areas such as public financial management, public debt management, public investment management, procurement rules and systems, public-private partnerships, and domestic resource mobilization. AfDB plans to help Zambia access $168 million per year from its non-concessional window and regional financing window to finance transformative infrastructure projects, including energy, road, and rail connections with neighboring countries.
Furthermore, AfDB aims to enhance Zambia’s farm input support program by making it more efficient, transparent, and delivered by the private sector. The Bank will also support the establishment of Special Agro-Industrial Processing Zones and a Youth Entrepreneurship Investment Bank to promote youth-led businesses and create job opportunities.
Adesina encouraged the government to explore “asset recycling” by selling assets to the private sector to free up liquidity for investment in new infrastructure projects, thereby optimizing the use of debt for infrastructure development.
Currently, AfDB has 25 active projects in Zambia with total financing of $1.02 billion. During his visit, Adesina also engaged with private sector leaders, encouraging them to seize investment opportunities in the country.
President Hichilema expressed gratitude to Adesina for his outstanding work for the African Development Bank and Africa, acknowledging his leadership’s positive impact on the bank’s status and performance.
Adesina commended President Hichilema’s dedication and approach to debt resolution and restructuring for the country, assuring him of AfDB’s unwavering support. He expressed confidence in Zambia’s economic turnaround, emphasizing that Zambia is back on track and the bank is fully committed to supporting the country’s development.
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