Zambia cabinet approves $439 million stimulus package

The coronavirus outbreak has squeezed the Zambian economy – and the country’s debt is still growing 

Zambia’s cabinet has approved a COVID-19 stimulus package worth over US$400 million, geared towards lessening the national impact of the disease.

The Office of the President said on Tuesday that 8 billion kwacha ($439 million) in total has been approved to fuel a stimulus package. The government is hoping that the money, which is being financed through a COVID-19 bond, will give the economy a huge boost.

Zambia has been hit hard by the disease, and its rising public debt has been made worse by the global health crisis.

Although the country is Africa’s second largest producer of copper, the outbreak of the coronavirus has crippled international demand for raw materials.

Improving liquidity

Like many other countries, Zambia has imposed a lockdown and has restricted movement of citizen.

The presidency said this has resulted in reduced liquidity, which has particularly affected retirees, contractors and suppliers.

The $439 million COVID-19 stimulus package is expected to give the country an uplift and generally improve liquidity.

“Cabinet resolved that it is necessary to provide an economic stimulus through the issuance of the COVID-19 bond in order to improve liquidity levels in the economy,” the statement from the presidency said.

Meanwhile, needy parts of the country will benefit from the proceeds of the COVID-19 bond.

Fall in revenue

In April, Zambia’s Ministry of Finance said national budgeted revenue is estimated to fall short of target by close to 20%.

This, the ministry said, was due to the economic adjustments forced by the coronavirus outbreak.

The Southern African country has not recorded an economic contraction in over 20 years, but the central bank has projected a 2.6% contraction in GDP.

As of 25 June Zambia’s COVID-19 case count had risen to 1,489, with an impressive 1,223 recoveries and 18 deaths.

E A Alanore

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