‘Zambia needs to double economic growth rate’

Debt relief funds amount to US$180m
IT IS estimated that the HIPC multilateral debt relief that was announced in the first quarter of 2005 has made available US$180m. These funds are to be used for poverty alleviation and along with it development of infrastructure – including the transport infrastructure to create employment as the manufacturing sector is established to supply local needs as well as diversify exports. Certainly the newspapers are full of advertisements placed by the Zambian National Tender Board (ZNTB) for parties interested in upgrading a number of vital stretches of road that form the backbone of the landlocked country’s transport infrastructure. Each of these tenders in the many newspapers that appear daily and weekly in Zambia are of great interest to southern Africa as a whole, for the nation is a critical transit hub for much of the untapped wealth of commodities in the region as they find their way to resource-hungry economies of the world. Zambia’s economic growth rate has remained at about 4.5% on average for the past few years and it has single digit inflation, a trend that looks set to continue. World Bank country manager for Zambia, Dr Ohene Nyanin, says that it is not enough. “Zambia has made economic progress, which has culminated in an average of 4.5% economic growth. While this is positive, we all agree it is not enough to make the required impact on poverty and indeed to reach recommended Millennium Development Goals. Zambia requires levels of 8-9% economic growth,” he says. Earlier this year, the managing director of the International Monetary Fund, Rodrigo de Rato, paid the country a visit just two months after 100% debt relief was granted to Zambia, which up until then had received two thirds of such relief from the World Bank and IMF. The IMF’s goal is to reduce by two thirds the debt of all southern African countries in crippling debt traps as they achieve economic performance and fiscal management requirements for such easing. De Rato said of his visit in a report carried by the influential Zambian Commerce Gazette: “I encouraged authorities to seize the opportunity provided by debt relief and the prospect of increased external assistance through the scaling up of aid to build upon Zambia’s improved economic performance in recent years. I particularly welcomed hearing about the government’s intention to adhere to a prudent borrowing policy and to strengthen debt management capacity. “We also discussed how higher aid flows might be used for increased health and education spending and for infrastructure investment – and this in an environment of increased private-sector led growth.” He noted that the private sector played an important role in developing Zambia’s infrastructure.