Norway has confirmed its continued funding of budget support for Zambia, for the purpose of reducing poverty. Together with six other cooperating partners, Norway signed a revised Memorandum of Understanding (MoU) with the Government of Zambia during a ceremony in Mulungushi Hall in Lusaka on 17 November 2011.
The African Development Bank, the European Union, the World Bank, together with Finland, Germany, the United Kingdom (DfID) and Norway agreed with the Zambian Ministry of Finance inter alia on the main underlying principles for direct support to the Zambian budget;
- Poverty reduction, expressed in the pattern of public expenditures
- Promoting peace, human rights, democratic principles and the rule of law
- Applying sound macro-economic policies
- Enhancing good governance, including the fight against corruption
Zambia’ Secretary to the Treasury, Mr Fredson Yamba, confirmed that these were core elements of the policies of the new government, and invited the seven cooperating partners to an open dialogue with the government on the implementation of these principles.
It is expected that the seven partners will contribute the total of USD 168 million for the year 2012 as a direct transfer to the Government’s treasury under his programme.
During the Review Meeting prior to the signing ceremony, the Norwegian ambassador Arve Ofstad said that Norway provides direct budget support to several African developing countries, and has done so in Zambia since 2005. This is based on three important conditions:
- That Zambia is mobilising its own resources to the maximum, and that international budget support is supplementary to the country’s own resources;
- That there is good public financial management so that the money available is not misused or mismanaged;
- That the budget actually contributes to poverty reduction.
The ambassador added:
"In the past, Zambia has struggled to fulfil all three conditions, but Norway expects the new government to make a stronger effort to mobilise internal resources; to strengthen its public financial management and fight corruption; and to ensure that the budget contributes to poverty reduction. On this basis, Norway is pleased to sign the new MoU with the Government of Zambia, together with its six partners."