Zambia Third Poverty Reduction Support Credit

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The Third Poverty Reduction Support Credit Program (PRSC-3) is the last in a programmatic series of annual poverty reduction support credits to the country. PRSC-1 (US$20 million equivalent) was approved in March 2010 and PRSC-2 (US$30 million equivalent) in February 2011. The PRSC credits provide support to a policy and institutional reform program emanating from government's development strategy articulated in the Fifth National Development Plan (FNDP) for the period 2006-2010 and other strategic documents and reform programs prepared by the government. The successor to the FNDP, the Sixth National Development Plan (SNDP) for the period 2011-2015, was prepared by the outgoing government and adopted in February 2011. The PRSC program is in good alignment with SNDP as well. Policy preferences of the new Patriotic Front (PF) government that assumed office in September 2011 display commitment to the reform activities monitored by the PRSC series. This was evidenced in the team's policy discussions with the government and progress being made on the activities. The Country Assistance Strategy (CAS) identified budget support as the primary instrument towards implementing Bank's macroeconomic program over the period 2008-11. It provided a resource envelope of 15-20 percent of the International Development Association (IDA) country allocation for budget support. The objectives of the Bank's macroeconomic program identified in the CAS are to help Zambia in better management of its financial resources, in improving accountability and transparency in the use of financial resources, and in implementing its reform programs to improve public sector efficiency and business environment. The PRSC process also provides a forum for broader policy dialogue with the government and other major stakeholders.