ZAMBIA has managed to significantly slash or reduce its dependence on foreign aid to less than five percent of the national budget as Government continues to transform the country into an attractive investment destination, Minister of Finance Alexander Chikwanda has said.
In a statement released in Lusaka yesterday, Mr Chikwanda said the contribution of external or foreign aid to the national budget is now an “insignificant” percentage (five percent) of the nation’s gross domestic product (GDP) and may eventually become history.
“Zambia’s dependence on external aid has reduced considerably,” said Mr Chikwanda, “it’s now less than five percent of our budget and insignificant as a percentage of our GDP.”
The minister said Zambia would now, more than ever before, “rely more on external trade and investment as engines of growth than aid with its obvious limitations and which, in any case, is short-term expedient.”
Mr Chikwanda said Government will continue its “efforts” to wean Zambia completely off external aid as the country’s development momentum gathers pace.
“Even as we push towards zero external subventions, we will continue to strengthen our external relations and safeguard our image as a credible investment destination anchored on policy consistency and predictability,” he said.
Mr Chikwanda said the cancellation of substantial portions of the country’s external debt by co-operating partners a few years ago freed resources which the government has been investing in economic and social development.
He commended the international community for the debt relief, without which Zambia would not have enjoyed the steady economic growth it has been recording in the last six years at more than six percent.
“It is this process which triggered the high growth rates we have seen in recent years, as it freed resources for economic growth through increased spending on economic sectors, especially for infrastructure development and programmes in the health and education sectors,” Mr Chikwanda said.
He assured the international community that Zambia is committed to the maintenance of fundamental freedoms and good governance, not as means of securing external charity but because that is part of its development agenda.
Mr Chikwanda noted that the global community has endorsed the country’s internal track record of peace and harmony and “irrevocable commitment to upholding human rights and basic tenets of governance.”
“For Zambians, good governance is cardinal because bad governance infringes their rights and is prone to resource misdirection through corruption and priority misallocation. That is unacceptable,” he said.
He said while external support is inevitable for weaker economies like Zambia, the country will focus on the capacity of its citizens to generate the resources it needs to deliver development.
Mr Chikwanda’s statement comes on the back of Zambia co-hosting the UNWTO event in the resort town of Livingstone with Zimbabwe that attracted a reported 4,000 international delegates, seen also as an endorsement of Zambia’s growing attractiveness.