Daniel Itai – The Zimbabwe Daily

Lusaka, Zambia – Zambia’s US$438 million COVID-19 stimulus package is set to aid the country’s ailing economy.

COVID-19 has really caused some economic turmoils especially to the SMEs and the informal sector.

Zambia, Africa’s second largest copper producer, has been wrestling with growing public debt even before the Coronavirus outbreak which forced lockdowns across the globe, crimping international demand for raw materials.

“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

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,” said the Presidency in a statement.

The economy is experiencing challenges such as low growth, high fiscal deficits, rising inflation and debt service obligations. The closure of businesses and restrictions which have been exacerbated by the pandemic have adversely affected the economy.

Moreover, the Central Bank projected in May that the country’s GDP would shrink by 2.6 percent in 2020, its first economic contraction in more than 20 years.