Following Zambia’s reclassification as a low income nation by the World Bank, the government has stated that it will concentrate on maintaining macroeconomic stability and expanding the economy. SITUMBEKO MUSOKOTWANE, Minister of Finance and National Planning, claims that the administration would also make sure to improve Zambians’ quality of life. Dr. MUSOKOTWANE claims that the…
Following Zambia’s reclassification as a low income nation by the World Bank, the government has stated that it will concentrate on maintaining macroeconomic stability and expanding the economy.
SITUMBEKO MUSOKOTWANE, Minister of Finance and National Planning, claims that the administration would also make sure to improve Zambians’ quality of life.
Dr. MUSOKOTWANE claims that the World Bank’s 2023 fiscal year, which starts on July 1, 2022, has NO immediate implications for the lending category.
When he made a ministerial statement in Parliament today about Zambia’s reclassification to a lower income level, he said as such.
He says that Zambia is now regarded as a “blend nation,” which means it is eligible for both World Bank concessional and non-concessional loans.
According to Dr. MUSOKOTWANE, Zambia’s credit worthiness will decline if its income stays below the operational cutoff point for three consecutive years.
He claims that since the terms will be more favorable, using the concessional window to acquire financing will result in reduced interest rates for the nation.
According to Dr. MUSOKOTWANE, the classification may prompt grant and financing providers to reevaluate their policies on the nation and recommence grant financing.
Given Zambia’s high level of debt and the decision to end commercial borrowing, he points out that this would be more beneficial for Zambia.
The country’s ability to access resources for growth, according to the finance minister, would now be limited because Zambia cannot obtain non-concessional loans, even if its debt crisis is handled.
Dr. MUSOKOTWANE notes that more work needs to be done in order to realize the 2030 vision because it demonstrates a reversal in the nation’s supposed progress.
