Paris Club meeting starts

A World Bank-sponsored donor Consultative Group (CG) meeting on Zambia opened in the capital Lusaka on Sunday, with the cash-strapped government making its case for budgetary support to help alleviate deepening poverty levels.

The CG meeting, which will last three days, will assess Zambia’s economic performance, evaluate poverty reduction strategies, public sector reforms, monetary and fiscal policies as well as examine the country’s governance record. “The amount of money to be pledged by donors will depend on the outcome of these evaluations,” a debt-relief activist told IRIN on Monday.

He said Zambian civil society groups hoped that the donors would agree to provide grants rather than loans to a government struggling with a declining revenue base and large debt service obligations.

“Zambia cannot afford to take out any more loans. The country’s external debt is currently estimated at US $7 billion while debt servicing costs have averaged US $217 million a year over the last eight years,” the activist said.

According to government figures, despite the application of an economic reform programme, poverty levels have deepened. Sixty-nine percent of Zambia’s nine million people were assessed as poor in 1996, with the figure climbing to 73 percent in 1998. The government acknowledges that it has been unable to adequately fund essential social services such as health and education, exacerbating poverty.

A trade union official told IRIN that of some 4.7 million economically active Zambians, only about 465,000 are formally employed. “This means that formal employment in Zambia declined to 11 percent in 1998 from 17 percent of the labour force in 1991,” he noted.