Announcement of Thirty Million US Dollars Program Loan to Zambia on June 18, 1973

f\J,J( lrNTERNATIONAL BANK FOR .RECONSTRUCTION AND DEVELOPMENT 1818 H STREET,'N.W .. WASHINGTON D. C. 20433 TELEPHONE: E?(ECUTIVE 3-6360 Bank Pr.. • Release No. 73/40 Subject: $30.0 million program loan June 18, 1973 to Zambia The World Bank has approved a loan of $30.0 million to help support Zallbia'• ongoing development program by providing foreign exchange for eaaential iaporta and by using the funds generated by the imports for the inveataant program. Zambia formulated an ambitious Second National Development Proaraa 1972-76 which emphasizes bridging the gap between ur~ and rural atandarda of living, raising the general level of education and devele,,l.•1 :te~ical and 111111&1•rial skills to reduce dependence on expatriates. It also atr••••• development of the modern sector, particularly copper mini~g, and of trad!- tion&l and commercial agriculture to mak® the country self-sufficient in • buie foodstuffs • However, the country's economy -- and revenues -- rely heavily on the copp~r induatry which has been adversely affected by a ujor mine diaut~r in Septeaber 1970 and a depressed world price of copper in 1971 and 1972. In addition, transportation problems have recently put an additional. strain OD the economy. The GO'lamaent adjusted to this situation of sharply lover reaouJ:'c.. by cutting down OD expenditures and seeking additi,,nal revenues from increued taxation and aid from bilateral aources. The brunt of-, -the expenditure cut wu in public aector inveatment. If the Zambian development efforts are to be aaintained at a reaaonable level, additional support is neceaaary. The World Bank'• prograa loan of $30.0 million is designed to provi4e this support •. The foreign exchange provided will be utilized for essential import• of capital and intermediate goods for the private and public sector•. The doaeatic funds generated by the imports will be used by Government to cover its expendi- tur.. for the ongoing development progra. The borrower is the Republic of Zambia and the loan is for 20 years • including five years of grace, with interest •t 7 1/4% per annum. - 0 -