The World Bank has approved a US$45 million Development Policy Operation to support Zambia’s economic reform programme and strengthen resilience to climate and economic shocks.
The financing, provided through the International Development Association, will directly support Zambia’s national budget and reinforce ongoing reforms aimed at improving macroeconomic stability, strengthening fiscal management, and enhancing the investment climate.
The approved operation will support government reforms under three key policy pillars.
The first pillar focuses on strengthening fiscal management and economic resilience. Measures include enhancing transparency in mineral revenue management, including disclosure of copper price assumptions and non-mining fiscal balances in budget documents.
Government has also introduced a Credit Risk Assessment Framework to strengthen fiscal risk management involving loans and sovereign guarantees.
Additionally, legislation has been advanced to improve oversight of State-Owned Enterprises through the State-Owned Enterprises Bill, aimed at optimizing state investments and reducing fiscal risks.
The second pillar targets private-sector development and investment resilience in key sectors. Government has operationalised the Public-Private Partnership Project Development Support Fund and issued new PPP General Guidelines to streamline the preparation and implementation of partnership projects.
Further reforms are promoting non-debt financing and expanding green investment opportunities through the Green Economy and Climate Change Regulations of 2026, which provide a framework for Zambia’s participation in international carbon markets.
To strengthen energy security and diversify power generation beyond hydropower, government has approved a competitive procurement framework for private-sector investment in renewable energy and introduced new electricity transmission regulations requiring climate-resilient standards.
The third pillar focuses on disaster risk management and climate resilience. Government is amending the Disaster Risk Management Act to establish a unified national early-warning system covering multiple hazards.
Cabinet has also approved the creation of a National Social Registry, which will serve as a centralized database to improve targeting of social protection programmes and enhance support to vulnerable households affected by climate-related shocks.
Authorities are also implementing measures to improve the financial sustainability of the water sector and strengthen the regulatory independence of the National Water Supply and Sanitation Council.
The programme is being implemented amid improving macroeconomic conditions, supported by stronger agricultural output, renewed mining investment, and ongoing structural reforms. Increased copper production, recovery in major mining operations, and improved rainfall have also supported economic activity.
Speaking after the approval, Finance and National Planning Minister Situmbeko Musokotwane said the budget support reflects growing international confidence in Zambia’s reform agenda and Government’s commitment to strengthening economic governance.
Dr. Musokotwane says the programme will reinforce fiscal discipline, enhance resilience to climate-related shocks, and create conditions for increased private-sector investment and job creation.
The Development Policy Operation forms part of a broader programme of support from the World Bank aimed at strengthening Zambia’s economic resilience while promoting inclusive and sustainable growth.
By Rachel Mumba
