Secretary to the Treasury, Felix Nkulukusa says Zambia has finalised the guidelines and listing rules for issuance of green bonds to support climate related projects.
Mr Nkulukusa explained that the finalization of regulations creates credible opportunities for raising financing through green bonds for climate change projects and green growth.
Contained in a statement issued to the media by the Ministry of Finance, Mr Nkulukusa noted that to promote green bond trading, Zambia has provided tax exemption on withholding tax on interest income earned on green bonds with a maturity of at least three years.
He further explained that the country is in the process of developing legislation to regulate the carbon market.
Mr Nkulukusa said this while addressing the United Nations Conference on Trade and Development (UNCTAD) forum on financing for recovery and development in an era of interrelated global crises (Covid-19, Climate Change & Russia-Ukraine Conflict), in Geneva, Switzerland.
He added the November 20, 2022, breakthrough-agreement by the United Nations Climate Change Conference COP27 for providing loss and damage funding for countries hit hard by climate disasters, like Zambia, will be an important source of financing for recovery and development.
Mr Nkulukusa cited the impact of the COVID-19 not only resulted in loss of human life but also had a significantly negative impact on growth and revenue collection, and exposed the vulnerabilities of developing countries both in terms of capacity to cope with the Pandemic and ability to respond.
The Secretary to the Treasury informed delegates in Geneva that Zambia, approximately, lost about 3,500 lives due to the COVID-19 pandemic.
“The pandemic compromised our country’s revenue generation capacity while public expenditure rose in response to COVID-19 related challenges. Tax relief to enable economic players to endure the Pandemic further deepened the country’s fiscal challenges – which already were eminent prior to the Pandemic,” Mr Nkulukusa indicated.
He took the chance to express gratitude to Zambia’s multilateral and bilateral partners for augmenting the Covid-19 mitigation efforts.
He also told the Geneva gathering that flash floods experienced in some areas of Zambia have negatively affected output in some open-pit mines, which were induced to make climate change mitigation investments to pump out water from the flooded mines, before production could resume.
And in recognition of the significance of climate change and its impact, Mr Nkulukusa said that Zambia has prioritised the issue in the 8th National Development Plan.
“We have already seen the important role that agricultural insurance has begun to play in mitigating against agriculture losses occasioned by droughts or floods,” Mr. Nkulukusa briefed the Forum.
He noted that with the IMF’s approval for an Extended Credit Facility in August, 2022, the country is now in the process of seeking debt restructuring.
Mr Nkulukusa also announced that Zambia is also engaging in parallel discussions with the private creditors, mainly focusing on the outcome of the Debt Sustainability Analysis (DSA) and the kind of relief that Zambia requires from its creditors based on the DSA.