EU RESUMES BUDGET SUPPORT TO ZAMBIA WITH DISBURSEMENT OF EUR 20 MILLION
European Union (EU) has resumed its budget support to Zambia with the first disbursement of EUR 20 million, equivalent to K1.8 billion, that will be transferred to the National Treasury between 2024 and 2026.
Speaking during the signing ceremony in Lusaka, EU Ambassador to Zambia Karolina Stasiak, said the Budget Support Programme relies on a strong policy dialogue between the European Union and the Zambian Government and it is disbursed based on compliance with mutually agreed-upon reforms.
Ms. Stasiak stated that the budget support focuses on Education, Health, and Public Procurement and the funds are transferred directly to the National Treasury, becoming part of Zambia’s National Budget.
She added that the EU had withdrawn its budget support from Zambia 10 years ago, but that with the appointment of a new Cabinet, in 2021, it witnessed a renewed commitment to ambitious reforms towards strengthening governance and guiding the country back onto economic recovery and social development.
“This marks an important milestone in our partnership that reflects the EU’s recognition of the structural reforms in public finance management conducted by the government of Zambia in 2021, which has been aimed at strengthening economic governance, transparency, and accountability.”
“Despite considerable challenges, including a global health emergency and the ongoing severe drought, the Government has remained steadfast in restoring macroeconomic stability and promoting more resilient and inclusive growth,” Ms. Stasiak stated.
She also clarified that in this time of tight fiscal constraints, the EU Budget Support is not a loan as it is a non-refundable financial support or a grant provided as part of development cooperation assistance.
“The European Union grants Budget Support only to countries that have made tangible progress in implementing the Government’s reform policies. These funds will help the Government mitigate the impact of the crisis on the most vulnerable Zambians.
“In preparing this budget support, we have been guided by progress made under the IMF programme. The Government is advancing structural reforms that strengthens governance, reduce corruption risks, and improve public financial management. This programme is vital for securing budget support, as it demonstrates the Government’s commitment to sound macroeconomic policies, good governance and strengthening of the Zambian institutions,” she added.
And speaking at the same event, Minister of Finance and National Planning, Dr. Situmbeko Musokotwane expressed confidence that through the renewed partnership between Zambia and the EU, Government can create a future where every citizen has access to quality education, affordable healthcare, and the benefits of a sound public financial management system.
“Today’s signing ceremony is not just a symbolic act, it is a concrete manifestation of our commitment to building a stronger, more prosperous Zambia,” Dr. Musokotwane asserted.
The European Union supports Zambia’s commitment to improve access, quality, equity and inclusiveness in primary and secondary education, advance the Zambia Pharmaceutical Manufacturing Initiative and contribute to improving health services by creating a local pharmaceutical industry, as well as improve the operational efficiency and accountability of public spending.
It provides support of K10.6 billion or EUR 359 million for 2021-2024 in the priority sectors identified jointly with the Government of Zambia which include Healthcare, Education, Agriculture, Environmental Conservation, Governance, Infrastructure and others.
