strapped government to make huge savings in hard currency and increase social sector spending on poverty reduction programmes. It has also boosted the country's credit rating and investor confidence further strengthening the national economy. Last week, Japan and the IMF cancelled all of Zambia's foreign debt, the World Bank and ADB are expected to do the same in January 2006. The Paris Club group of creditor nations cancelled Zambia's foreign debt in May. To this end, the country's total foreign debt stock is expected to drop to 500,000 dollars. Zambia is also among the 38 poor countries expected to receive total debt cancellation from wealthy G8 nations. Cancellation of the foreign debt has contributed significantly to the strong performance of the Kwacha, the local currency, against major currencies in recent months.
