Zambia, Africa’s leading copper producer’s upgrading from a Least Developed Country to a Middle Income Country is a manifestation that the country is being governed under good policies.

Mr Situmbeko Musokotwane finance minister of Zambia said that it had taken a lot of political courage to get the country to where it has reached economically. Recently the World Bank awarded Zambia and Ghana the middle income status, ranking the two countries 27 and 28, respectively. However although Zambia has managed to achieve the middle income status 19 years earlier than the targeted 2030, the government would not relax but push harder to go even higher in the global economic ranks.

Least developed countries, under the World Bank classification, are those that have a per capita income of less than USD 1,005 while a lower middle income country is one with a per capita income of between USD 1,006 and USD 3,975. Upper middle income countries are those with an average income per person of between USD 3,976 and USD 12, 275.

Dr Musokotwane said that the government would put measures in place to ensure that the reclassification of Zambia as a middle income country does not plunge the economy into high indebtedness. One of the advantages of the middle income classification is that the country will now be able to access more funding on commercial basis as opposed to the previous scenario where Zambia could only access concessional loans because of her poor status.

He explained that although concessional loans come with the advantage of low interest rates and the provision to repay over a long period of time, they are usually limited in nature. He said with Zambia’s new economic status, the country will now be able to borrow more to enhance infrastructure development.

Dr Musokotwane said that government would not allow a situation where the economy falls back into a debt trap due to imprudent policies. Zambia had learnt a lot from past experiences that led to the country’s economy deteriorating. The key to ensuring that the country’s economy stays afloat and more people are pulled out of poverty was to continue opening up the market to investments, both local and foreign.

Meanwhile the World Bank’s reclassification of Zambia as a lower middle -income country has placed Zambia in a better position to access non-concessional loans for development projects. The decision by the Bretton Woods institution placed Zambia at an advantage to access concessional and non concessional funds adding that while concessional loans were cheap and attracted lower rates and could be paid over a long time, they were not adequate for the country to undertake all planned projects.

Dr Musokotwane said that the lower middle income status was a better place to be because it meant that the country could now access non concessional borrowing which means more resources to enhance development including the construction of more health and education facilities. When we were a poor country, we were constrained in terms of the amount of money we could borrow, compared to what we needed for construction works but with this growth in the economy we can still access concessional loans but we can also begin to access non concessional loans because they are now more available to our economy.

He said that the advantage of concessional loans is that a country can borrow larger amounts of money to carry out manufacturing and construction works to develop the country. The other advantage is that Zambia is now in a position to attract more investment from firms and countries as a result of the lower middle income status. Over the years, the income of Zambia has deteriorated to a bad level but the reclassification at least confirms to us that the policies we have been implementing since 1991 have been working to improve the economic performance of the country.

He added that Zambia is encouraged that from an average income of USD 300 per capita in 2000, Zambia has now moved up to an average of over USD 1,000 dollars income per year as a result of the effective policies the government has put in place.

(Filed by Mr Kapembwa Sinkamba SteelGuru Correspondent Zambia)