Editor's Comment

World Bank funding welcome

THE need for more financial resources in Zambia cannot be over-emphasised as the country has embarked on massive infrastructure projects.  Such mega investments are required to make Zambia attractive to foreign and local investors.
External financial flows and tax revenues play an increasingly important role in Africa’s development and economic growth prospects and these have since 2000 projected to reach over US$200 billion in 2014.
These funds play an important role in the development of infrastructure and help African countries and other developing regions to tap into multilateral financial institutions to get funds for development at relatively lower costs.
It is therefore very timely that the World Bank will inject US$400 million into various sectors of the economy in the next four years.  We welcome this development because it will enhance Zambia’s ability to complete some projects it has embarked on.
World Bank country director for Zambia, Malawi and Zimbabwe Kundhavi Kadiresan says the US$400 million is for 2014-18 disbursement in priority sectors such as energy, transport, agriculture and trade among other areas.
This is an initiative that will go a long way in addressing the challenges these key sectors have been facing and help to grow Zambia’s economy.
The World Bank’s gesture further demonstrates the international community’s trust in Zambia’s good economic management and performance.
But much as we welcome this development, we would like to caution against extreme conditionalities attached to some donor funds where recipient countries of donor aid have little chance of flexibility to use the funds.
Inflexible conditionalities make it difficult for a country to have efficiency in the manner it uses funds.  For instance, Zambia has had challenges in the utilisation of the European Funding for small scale miners in good time.
Other than funding from multilateral institutions, foreign investment – direct and portfolio – has now fully recovered from the 2009 economic crisis and is projected to reach over a record US$80 billion in 2014, making it the largest financial flow to Africa.
All these financial flows are very important for Africa and other developing countries because they are investments in key sectors of economies to enhance economic growth and lead to job creation.
It is important to note that although official remittances have been continuing their increasing trend since 2009 and are projected to reach US$ 67.1 billion in 2014, official development assistance (ODA) share of total external flows keeps diminishing, from 38 percent in 2000 to 27 percent in 2014 (estimated at US$ 55.2 billion).
Despite this downward trend, ODA still represents the largest external financial flow to low-income African countries.
It is against this background that we welcome World Bank funding to Zambia for enhancement of the economy.

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