Zambian President Edgar Lungu. PHOTO | AFP
Zambia’s cabinet approved a 8 billion kwacha ($439 million)
economic stimulus package financed through a Covid-19 bond in an effort
to alleviate the pandemic’s impact, the presidency said on Tuesday.
Zambia,
Africa’s second largest copper producer, has been wrestling with
growing public debt even before the coronavirus outbreak forced
lockdowns across the globe, crimping international demand for raw
materials.
Zambia has reported 1,416 confirmed coronavirus cases and 11 deaths so far.
“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,” it said.
The proceeds from the bond
will go towards needy areas, including payment of retirees, contractors
and suppliers, which have been hit by reduced liquidity due to Covid-19,
the presidency said.
Zambia’s budgeted revenue is
estimated to fall short of target by close to 20 per cent as a result of
economic adjustments due to Covid-19, the finance ministry said in
April.
The central bank projected in May gross domestic product (GDP)
would shrink 2.6 per cent in 2020, its first economic contraction in
more than 20 years.
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