Following the signing of a Bilateral Co-operation Agreement by Finland and Zambia in Zambia's Ministry of Finance on 22 May 2013, both the Finnish and Zambian Governments are committed to sustainable development at the level of human capacities - and to new partnerships between the two countries geared towards a new phase in development co-operation. Key to the renewed commitment is reduction in poverty levels. As Finnish Minister for International Development Heidi Hautala said at the signing ceremony, "Zambia’s economic growth has been rapid, but poverty levels prevail high, particularly in the rural areas. The trickle down effect has not contributed to poverty reduction as expected. Finland commends Zambia’s initiative to set poverty reduction high on the bilateral agenda."
Finland has previously supported the implementation of a national plan in Zambia that has been designed to contribute to poverty reduction through the provision of general budgetary support, adding up to 25mn Euros between 2007 and 2012. The May 2013 agreement represents a revision of previous commitments, and so a new budgetary framework, within which Finland will provide budget support to Zambia in 2013 and 2014. Up to a total of 12mn Euros - at six million Euros per year - have been allocated for this purpose.
Comprehensive commitment to collaboration
Budgetary support has previously ensured that stakeholders are empowered to harmonise co-operation, by lessening transaction costs and enabling full access to government systems. It has also provided a useful forum for dialogue between civil society organisations and the Zambian government to examine the challenges in contributing to the development of all Zambians. But there is more to the May 2013 agreement - as Ms Hautala observed, "Poverty reduction budget support is only one of the instruments through which Finland supports the development in Zambia."
In addition to the allocated budgetary support, there is commitment also to "project specific support" - including a Social Protection Programme, engagement through multilateral institutions such as the United Nations and financial institutions, and civil society organisations such as the Zambian National Farmers Union. Recent research has indicated progress has been made in key sectors such as health and education. Furthermore, there is evidence that social cash transfers have begun to offer a means of social protection, too - representing an effective and cost-effective way to tackle poverty amongst the most vulnerable groups in several countries, improving food security and wellbeing as well as enhancing families’ small-scale economic activities.
Ms Hautala said, "The preliminary impact assessment data in Zambia looks encouraging and in line with the evidence from across the world."