K1.8bn Covid-19 stimulus approved

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President Edgar Lungu

BUUMBA CHIMBULU writes

THE Bank of Zambia (BoZ) has approved K1.8 billion worth of applications from the banking sector who want to access the stimulus package which has been put in place to provide relief to business during the Covid-19 period.

The Central Bank in April this year announced a K10 billion facility meant to ease the cash flow for businesses by accessing funds at a lower rate through financial institutions.

President Edgar Lungu on Thursday this week during his address to the nation announced that the BoZ had so far approved K1.8 billion worth of application from the banking sector.

“So far, K533 million of K1.8 billion worth of applications from the banking sector has been approved by the bank of Zambia.  In addition, applications worth k753 million from the non-banking financial sector, are currently under consideration by the bank of Zambia,” he said.

The Head of State expressed happiness that commercial banks were now accessing part of the K10 billion to be loaned to entrepreneurs, especially, small and medium enterprises.

President Lungu said Government had put in place the K10 billion medium term refinancing facility meant to restructure, refinance or extend credit to businesses and households impacted by Covid-19.  

He also said Government spending in 2020 was expected to rise by approximately K20 billion due to the depreciation of the Kwacha which had in turn raised external debt payments and other foreign based expenditures.

President Lungu further said external debt service was expected to rise by K8.7 billion.  

In addition, he said, Covid-19 related expenditures had contributed to an increase in Government spending.

“With the projected fall in revenues, against the rising expenditure, coupled with unpredictable external financing, it has become necessary that domestic resources be mobilised to support the fight against covid-19 and stimulating the local economy.

“That is why my government has decided to issue the covid-19 bond amounting to K8 billion as a stimulus package to enhance economic activity,” President Lungu said.

He said part of the money raised from this bond would be used to pay off the retirees and those on the separates pay roll who had been waiting for their retirement benefits for a long time.

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