LUSAKA, June 13 (Xinhua) -- Zambia and the World Bank signed here Tuesday a 37.2 million U.S. dollars grant aimed at supporting the country's agricultural development.

    "The funds under this credit will be used to support increased commercialization of smallholder agriculture through improved productivity," Ng'andu Magande, Zambian Minister of Finance and National Planning, said at the signing ceremony.

    Magande said the funds will also be used to support farmers and agribusiness enterprises through the provision of short, medium and long-term loans for the improvement and expansion of out-grower farming schemes.

    The Zambian government has put agriculture as a priority sector for acceleration of economic growth and poverty reduction. The sector accounts for more than 40 percent of the country's Gross Domestic Product (GDP) and is currently engaging 67 percent of the country's labor force.

    The Zambian minister said the government was committed to provide and support the development of the sector so that it becomes sustainable and competitive.

    World Bank Country Manager, Ohene Nyanin, said on the same occasion that the bank was committed to support Zambia to meet the challenges existing in the agriculture sector.

    "Zambia's agriculture sector faces a lot of challenges such as inadequacy or lack of medium to long term credit which has constrained investments to very low levels and poor rural infrastructure," he said.

    He said the bank's assistance will increase output of agricultural products and boost export earnings.

    The World Bank is currently supporting four projects for Zambia's small scale farmers totaling about 70 million dollars. Enditem