Minister of Finance and National Planning Situmbeko Musokotwane has appealed to the European Union to support Zambia’s quest to access the Extended Credit Facility (ECF) for 2022-2025 to help restore macroeconomic stability and spur economic recovery.
Dr Musokotwane said the EU has a critical voice on the IMF Board which is cardinal to helping Zambia access the US$1.4 billion bailout package announced in December 2021.
The Minister said the staff-level agreement Zambia reached with the IMF is enabling the country to engage its creditors to restructure its debt.
Dr Musokotwane said the government wants to restructure payments with Zambia’s creditors under an arrangement that will allow the country to continue with debt servicing that will not undermine and affect economic activity in the country.
“As our case goes to the IMF and World Bank, please I appeal to you to give Zambia that it requires,” said Dr Musokotwane.
The Minister of Finance made the appeal to eight EU Ambassadors represented during the launch of the Multi-annual Indicative Programme (MIP) in Lusaka, namely the Czech Republic, Finland, France, Germany, Ireland, Italy and Sweden.
ZANIS reports that the Multi-annual Indicative Programme is a framework and road map that will guide and shape development cooperation between the European Union and Zambia over a seven-year period from 2021 to 2027, with a mid-term review scheduled for 2024.
The MIP sets out strategic priorities for the EU-Zambia partnership bordering on EU’s interests and values and Zambia’s development priorities under the 7NDP.
Dr Musokotwane assured the EU Ambassadors that Zambia is making the necessary reforms required to restructure and nationalize the debt and bring investments to the country.
The Minister of Finance said its cardinal that Zambia resolves her economic indebtedness brought about by excessive borrowing over the past few years.
He explained that the over-borrowing has made it difficult for the government to invest in socio-economic sectors such as employing teachers, health workers and creating jobs amidst the rampant closure of companies.
“Very soon, we shall be engaging the people we owe so that we have to agree how to restructure this debt. Hopefully, we should be done with that by May, so far it looks promising. The next step will be to approach the IMF Board during our mid-term review,” said Dr Musokotwane.
Dr Situmbeko praised the European Union for continuing to be one of Zambia’s largest donors.
The Minister of Finance noted that the EU has financed many development projects in various key sectors of the economy ranging from rehabilitation of the valuable Kariba Dam, construction of roads across the country, improvement and supply of piped water to some communities and technical assistance to the implementation of electoral reforms.
Dr Musokotwane however appealed to the EU to assist Zambia create jobs for the majority of the country’s youths who are unable to find employment after coming out of schools, colleges and universities despite possessing an array of valuable and desirable skills.
He noted that the labour market is being flooded annually with about 400,000 job seekers and warned that failing to create jobs for youths will make them lose faith in democracy and social order.
“There is a serious problem in the country, a serious problem of jobs especially for the young people …we don’t have the time…otherwise the issue of creating jobs is paramount, whether we are talking about the 8NDP or areas of cooperation” said Dr. Musokotwane
Dr. Musokotwane said creating jobs in Zambia and the rest of Africa will help stem the tide of economic refugees entering Europe to seek a better life.
He said investors should be able to find human capital in Zambia for their investments to pay off rather than resorting to hiring foreign labour.
The Minister of Finance expressed optimism that the objectives of the Multi-annual Indicative Programme and the country’s 8NDP will help bring out fruitful socio-economic benefits from the partnership between the EU and Zambia.
Dr Musokotwane said he looks forward to the EU’s impeccable track record of development cooperation being enhanced through the seven year Multi-annual Indicative Programme.
The Minister also thanked the EU for its continued support to Zambia’s COVID-19 national response
Speaking at the same function, EU Ambassador to Zambia and COMESA Jacek Jankowski said the EU has earmarked 299 million Euros to finance the Multi-annual Indicative Programme for Zambia.
Ambassador Jankowski said the MIP has been designed to respond faster to the development needs of Zambia and will be anchored on a green economy for sustainable growth, human capital development and governance.
“The MIP marks a new chapter in a long and fruitful partnership between Zambia, the EU and its member states. Building on our long history of technical cooperation and through a comprehensive EU-Zambia political dialogue, our relation has evolved beyond the traditional donor-recipient dynamic towards a partnership of equals,” said Mr Jankowski.
Ambassador Jankowski said the EU will leverage its expertise and resources to accelerate Zambia’s social and economic development and strengthen the country’s stability.
He said the EU will strive to build on past development cooperation and venture into new territories of cooperation and support.
Ambassador Jankowski said the EU will also help mobilize the private sector to play a critical role in development aid and scale up private investments towards Zambia’s national development priorities and sustainable development goals.
He said a mid-term review of the MIP will be held in 2024 to assess the impact of the joint development initiatives aimed at harnessing the demographic dividend of Zambians.
Mr Jankowski commended government’s commitment to reforming the country as demonstrated by the attainment of the staff level agreement with the IMF as well as the launch of the Economic Recovery Programme of 2020 to 2023.