The World Bank Eager To Resolve Debt Relief Quickly

David Malpass, President of the World Bank Group, has urged the Creditor Committee to reach a quick agreement on the specifics relating to the deep debt relief for Zambia.

Announced in a statement made by the World Bank on Saturday, the deep debt relief will be consistent with the upper-credit-tranche programme of the International Monetary Fund and the joint World Bank-IMF Debt Sustainability Assessment.

The statement continued in saying that “The World Bank expects commercial creditors to promptly agree on a comparable debt treatment for Zambia that would achieve debt sustainability over the medium term.”

Under the previous government, in 2021 the country’s per capita income declined to $1,040, subsequently causing Zambia to be classified as a low-income country for the first time since 2011. This follows several years of decline in Zambia’s GNI per capita under the Patriotic Front, starting at $1,440 in 2018.

Speaking on the matter, Malpass said that “Significant debt relief is needed to secure long-term debt sustainability and attract the investment necessary for growth and poverty reduction. I urge official bilateral and private sector creditors to participate on comparable terms, granting Zambia a sustainable net-present-value reduction in debt.”

The World Bank’s plans with Zambia over the next 10 years includes new financing of over $2 billion in the form of concessional loans including financing for investment projects in agriculture, education, energy, health, and social safety nets as well as policy-based lending in support of the structural reforms that the Government of Zambia is implementing.