[{"bbox": [96, 152, 883, 181], "category": "Text", "text": "**Outcome 3:** Improve the operational efficiency and accountability of public spending"}, {"bbox": [96, 191, 1134, 325], "category": "Text", "text": "The expected outcomes will directly contribute to two of the pillars of the 8NDP, concerning social sectors and democratic institutions and, at a larger scale, to the advancement of the country towards the Sustainable Development Goals (SDG) 4 – Quality Education, 3 – Health and Wellbeing, 6 – Clean Water and Sanitation, 16 – Peace, Justice and Strong Institutions. Activities will also contribute, in a cross-cutting manner, to SDG 1 – End Poverty, SDG 5 – Gender Equality, SDG 10 – Reduce Inequalities and 17 – Partnerships for the Goals."}, {"bbox": [96, 336, 1134, 418], "category": "Text", "text": "The action is also fully in line with the Joint European Strategy for Zambia, and with the Continental TEI on Manufacturing and Access to Vaccines, Medicines and Health Technologies for Africa (MAV+), and with the priorities of the Multiannual Indicative Programme (MIP)."}, {"bbox": [85, 457, 323, 489], "category": "Section-header", "text": "# 2 RATIONALE"}, {"bbox": [85, 523, 235, 550], "category": "Section-header", "text": "## 2.1 Context"}, {"bbox": [96, 568, 1134, 863], "category": "Text", "text": "Zambia is a low-income country that has faltered in its socio-economic development over the last decade¹. Zambia has a mixed economy consisting of mining, agriculture, and construction as major economic sectors. In 2021, Zambia's population stood at 18.9 million with an annual growth rate of 2.9%. In 2020, the life expectancy at birth was 64 years. Adolescents make up almost a quarter (24%) of the total population, with adolescents aged 10 to 14 years accounting for 13.3 percent, and those aged between 15 and 19 years about 11%. In 2018, nearly 49% of all adolescents (10–19 years) lived in rural areas²,³. Zambia counts among countries with the highest levels of poverty across the globe, with more than 61.4% of its population living below the international poverty line⁴ in 2015. It also has one of the highest levels of social inequalities worldwide, with an extreme poverty of 60 percent in rural areas. In 2015, Zambia's Gini coefficient stood at 57.1 indicating a huge differential in wealth distribution accounted for mainly by variances between the rural and urban areas⁵. The global gender gap index tended to increase through 2008-2021 period, though it fluctuated substantially in recent years, ending at 0.73 index in 2021⁶."}, {"bbox": [96, 874, 1134, 956], "category": "Text", "text": "The decision to resume budget support operations in Zambia after a period of 9 years, comes in a context where the new Government, led by President Hakainde Hichilema has shown, after a peaceful transition of power, a very strong commitment to democratic, economic and social reforms focused on the Zambian people and their welfare."}, {"bbox": [96, 980, 1134, 1327], "category": "Text", "text": "Given the difficult context inherited by the Government, marked by the country's default on its debt in 2020, the challenging post-COVID 19 situation and the indirect consequences of Russia's war of aggression against Ukraine, the European Union (EU) has politically engaged to support the new leadership's efforts towards a sustainable economic and social recovery. This engagement is based on clear signs from the Zambian side to keep and build a strong partnership with the EU (e.g. President Hichilema address at the European Parliament plenary session in June 2022, and Zambia's position towards Russia's war in Ukraine), and on the IMF's economic support to the country. In August 2022, the latter approved a USD 1.3 billion programme under the Extended Credit Facility (ECF), based on the Government's own reform programme and assurances given by official bilateral creditors to agree on a debt restructuring framework under which creditors would negotiate concrete debt restructuring terms with Zambia⁷. Eight months into the IMF programme, the first ECF review has been positive, with the associated disbursement of IMF financing foreseen for September 2023. An important element of the IMF programme is the required balance between fiscal reforms, public debt restructuring and the necessity of maintaining social sector investments. Thus, the budget support programme aims mainly to contribute to the Government's engagement"}, {"bbox": [85, 1355, 1143, 1404], "category": "Footnote", "text": "¹ World Bank reclassified Zambia to low-income status from lower-middle-income, for the 2023 financial year following the deterioration of Gross National Income per capita estimates recorded in 2021."}, {"bbox": [85, 1404, 1012, 1429], "category": "Footnote", "text": "² UNFPA. 2022. Adolescent and Youth Dashboard- Zambia. https://www.unfpa.org/data/adolescent-youth/ZM"}, {"bbox": [85, 1429, 1143, 1477], "category": "Footnote", "text": "³ Zambia Statistics Agency, Ministry of Health (MOH) Zambia, and ICF. 2019. Zambia Demographic and Health Survey 2018. Lusaka, Zambia, and Rockville, Maryland, USA"}, {"bbox": [85, 1477, 360, 1501], "category": "Footnote", "text": "⁴ Of USD 2.15 a day (2017 PPP)"}, {"bbox": [85, 1501, 564, 1525], "category": "Footnote", "text": "⁵ GRZ, 2022. Eighth National Development Plan (8NDP)"}, {"bbox": [85, 1525, 888, 1599], "category": "Footnote", "text": "⁶ https://knoema.com/atlas/Zambia/topics/World-Rankings/World-Rankings/Global-gender-gap-index#:~:text=Inpercent202021percent2Cpercent20globalpercent20genderpercent20gap,at percent200.73percent20indexpercent20inpercent202021."}, {"bbox": [85, 1599, 1143, 1647], "category": "Footnote", "text": "⁷ Zambia: Request for an Arrangement Under the Extended Credit Facility-Press Release; Staff Report; Staff Supplement; Staff Statement; and Statement by the Executive Director for Zambia, IMF, 6 September 2022"}, {"bbox": [1038, 1680, 1143, 1705], "category": "Page-footer", "text": "Page 5 of 33"}]