EU Agree Zambia Financing Package To Fight Poverty

Around 64 percent of Zambia estimated 12 million below the World Bank`s poverty threshold of $1 a day.

The European Union (EU) has approved a 225 million euro ($283.1 million) financing package for Zambia to help the country lift millions of its people out of poverty, officials said on Thursday.

EU commissioner for development aid Louis Michel and Zambia Finance Minister Situmbeko Musokotwane signed the agreement in Lusaka aimed at helping the southern African country meet the millenium development goals.

"The European Union has committed a grant of 225 million euros to the government of Zambia for a period of six years to support the country's efforts to improve efficiency and its poverty focused public programmes," an EU statement said.

Around 64 percent of Zambia estimated 12 million below the World Bank's poverty threshold of $1 a day.

Zambia is the first of seven African countries to sign a MDGs contract with the EU. The others are Ghana, Rwanda, Uganda, Mozambique, Burkina Fasso and Mali.

Michel said Zambia faced big challenges because of the global financial crisis, which has led to a fall in copper prices, due to less demand. Copper production is Zambia's economic mainstay.

"I firmly believe that this aid modality is a powerful tool to strengthen national systems, ensure full ownership, guarantee predictability, and improve domestic accountability by involving parliament and civil society," he said.

The International Monetary Fund said on Wednesday it was ready to increase balance of payments support to Zambia to help it deal with the effects of falling copper prices and the global economic slowdown.