Zambia: One Door Closes, Another Opens Pouring in Relief Funds to Cushion Impact of Covid-19

Zambia like many other countries in the world and particularly in Africa has been grappling with the negative impact of the coronavirus pandemic (Covid-19) on her social-economic profile since the country recorded its first Covid-19 case in March 2020. This pandemic broke out at a time this Southern African country was already facing economic challenges such as huge foreign debt, a high inflation rate, a continually depreciating currency, forcing the economy into even deeper waters.

Faced with grim micro and macroeconomic prospects that threaten the development of the country, Zambia turned to world finance bodies for aid. On May 22, the International Monetary Fund (IMF) confirmed that it had not processed Zambia’s request for emergency Covid-19 assistance because the country had unsustainable levels of debt.

Then, the IMF Director of Communications, Gerry Rice confirmed that the Zambian authorities had requested emergency assistance from its international partners, including the Fund in addition to an earlier request to fund support for its broader economic reform programme. Speaking during a regular virtual press conference, Dr Rice reiterated that any IMF financial support, including emergency financing must be contingent on steps to restore debt sustainability.

“As indicated in last year’s Article IV consultation with Zambia, and as published in the report, there, for you to look at, Zambia’s public debt is on an unsustainable path, the undercurrent policies, as the Minister, said in February, and we note the government’s commitment to restore debt sustainability through fiscal policy adjustment and debt management. So, that’s where it stands,” Dr Rice said.

He added that it was the Fund’s role to help countries address their medium-term viability, economic viability and that the IMF was prepared to perform this role.

“Our rules are there to help us keep a laser-like focus on designing programmes that will work to help the country escape its problems, and they reflect decades of experience, really, of what works and what does not. So, I say that because particular care must be taken in unsustainable debt situations. Why? Because a poorly designed programme can make matters worse for a country and its citizens,” he reiterated.

Despite the reticence of the IMF, the Zambian government never relented its efforts to keep knocking at doors for relief assistance to cushion the impact of Covid-19 on the economy and other areas of social life. The moves appear to be paying off as evidenced by a recent announcement of support by the World Bank.  

The World Bank assistance is evaluated at US$25 million to support the country’s response to the Covid-19 pandemic. Of that amount, US$20 million is from the International Development Association’s (IDA) Crisis Response Window, while US$5 million is a grant funding from the Global Financing Facility (GFF). The funds would be channelled through the Zambian Covid-19 Emergency Response and Health systems preparedness project.

“The Zambia Covid-19 Emergency Response and Health Systems Preparedness Project will provide support to the Zambian government to prevent, control, detect and respond to the threat posed by Covid-19 and strengthen national systems for public health preparedness,” a statement from the World Bank read.

The emergency funding will support disease surveillance and strengthen screening at points of entry, risk communication and community engagement, as well as strengthening governance and accountability in the implementation of the national Covid-19 response plan. The funding is expected to also support Covid-19 case management, infection prevention and control, and interventions to maintain essential health services.

According to the World Bank Country Manager for Zambia, Sahr Kpundeh, while Zambia has seen a reduction in new cases of Covid-19 in the last two months, it is important that prevention, detection and response measures are scaled up to prevent further spread of the disease.

“Rapid response is crucial in addressing Covid-19 and to reduce its negative impact on health systems, social services and economic activities,” Mr. Kpundeh said, noting that the project would be implemented nationwide and is expected to benefit the entire population of Zambia, given that Covid-19 poses a risk to everyone.

In the same vein, the Senior Nutrition and Population Specialist and task team leader of the project Rosemary Sunkutu said considering that many of the Covid-19 cases in Zambia have come from outside the country, the project would help strengthen screening at Zambia’s entry points.

“This component of the project is especially important given that Zambia is a landlocked country surrounded by eight countries, which predispose the country to risks of importation of diseases from neighbouring countries and beyond,” Ms. Sunkutu.

Conscious of that reality, the Zambian government has been on high alert with the Ministry of Health heightening interventions to stem the spread of Covid-19 through various entry posts. To ensure the effectiveness of border prevention, the Permanent Secretary at the Ministry of Health, Mr. Kennedy Malama advised those travelling into the country to obtain a certification to show that they had tested negative to Covid-19.

Dr. Malama said despite a passenger coming through the borders presenting certification showing he or she had tested negative for Covid-19, the Ministry of Health would repeat the tests upon entry into the country.

“Those travelling in or out of the country should ensure that they are able to inquire from the missions of destination…the country has recorded a cumulative number of 16,095 cases of Covid-19 and some of those infected continue to succumb to the virus,” Dr. Malama said.

Thus, the funding from the World Bank is part of a broader package of support to help Zambia manage and respond to the Covid-19 crisis. The World Bank mobilized US$2,72 million from existing health operations and financing mechanisms to support the country’s Covid-19 response.  The relief from the World Bank comes barely two months after the Ministry of Finance presented the proposed 2021 budget in which 9,7 billion Kwacha is expected to be spent on the health sector.

In its Analytical brief on the 2021 Social Sector Budget dubbed ‘coping with the dual effects of a recession and a pandemic: safeguarding lives and livelihood,’ the Zambia Institute for Policy Analysis and Research (ZIPAR) suggested that more funds should have been allocated to health in the wake of Covid-19. The brief indicates that the general decline in the health sector budget as a share of the total budget is a source of concern and risks harming the good progress made in the fight against Covid-19.

ZIPAR suggested that the government would have done well to increase allocations to ensure that the health sector is adequately equipped to face a second wave of the Covid-19 pandemic and manage care for those with various pre-existing health conditions.

“In light of the uncertainties related to the future course of the Covid-19 pandemic and the recent resurgences in cases in other countries, it is prudent for the government to suspend all new infrastructure projects within the health sector and reallocate it to drugs, medical supplies and hospital operations,” the ZIPAR report reads.

Overall, the World Bank Group is making available up to US$160 billion over a 15-month period ending June 2021 to help more than 100 countries, Zambia included, to protect the poor and vulnerable, support businesses, and bolster economic recovery. It would support public health interventions, work to ensure the flow of critical supplies and equipment, and help the private sector continue to operate and sustain jobs.