20091211

THE European Commission (EC) and the Zambian Government yesterday signed a K200 billion (30 million Euros) Budget support agreement.

EC head of delegation, Derek Fee said in the wake of the global economic and financial crisis, the commission recently introduced a new mechanism designed to cushion the fiscal effects of the economic and financial crisis in developing countries.

Dr Fee said during the signing ceremony that with the crisis negatively impacting on domestic revenues and fiscal deficit, Zambia was considered eligible for the Vulnerability Flex Support in 2009.

He said Zambia applied to the EC for additional K200 billion and was happy that the application was favourably received in late October and agreed upon in November after the conclusion of the Poverty Reduction Budget Support (PRBS) dialogue with the Zambian Government.

Finance Minister, Situmbeko Musokotwane paid tribute to the EC for considering the application which he said would go a long way in enhancing the financial support to the country.

Dr Musokotwane said the additional resources combined with the Government's renewed commitment to protect vital service delivery and infrastructure investments would go along way in ensuring that aggressive development agenda did not lose momentum.

He assured that the Government would continue to ensure that the funds were put to good use for the benefit of the country's development.