Zambia is a landlocked country located on the central plateau of the southern African region, with a land area of 752,612 square kilometres and a fast-growing population of over 16 million. It is one of the most urbanised countries in sub-Saharan Africa, with about 40 per cent of its inhabitants living in urban areas. The number of people in urban areas rose from 3.5 million in 2000 to 5.1 million in 2010. With a per capita gross domestic product (GDP) of around US$ 1,704, Zambia is now lower middle-income, according to the latest UN Country Analysis Summary Report.
ECONOMY
Zambia’s economy has relied heavily on copper mining, which accounts for over 70 per cent of export earnings, but employs less than 2 per cent of the population. The majority of people in Zambia (60 per cent) live in rural areas, where they depend on subsistence agriculture for their livelihoods. GDP growth averaged 6 per cent for the period 2006-2013, while inflation declined from 26 per cent towards the end of 1996 to less than 8 per cent in 2014.
Economic growth has been concentrated in capital-intensive industries such as construction, mining and transport. Growth has taken place in urban areas, while the poorest tend to live in remote areas that are barely connected to markets and the cash economy. Economic growth has not been labour intensive, particularly in those sectors in which the poor tend to work.
INEQUALITY AND VULNERABILITY
Reducing inequality is Zambia’s principal development challenge. By some measures, the situation is actually getting worse. The richest 20 per cent of households in the country are responsible for 60 per cent of total expenditure while the poorest 80 per cent share 40 per cent of the total. Poor households spend 66 per cent of their resources on food, with those better off spending only 34 per cent. Zambia’s economy is clearly divided into two: the formal and informal sectors. The informal sector accounts for about 80 per cent of the population.
DEBT AND ITS RISKS FOR PRO-POOR DEVELOPMENT
A 2017 International Monetary Fund report notes that “Zambia is at high risk of debt distress”. This indicates a need for a cautious approach to avoid the risk of the imposition of harsh economic and austerity policies that will not serve the interests of the poor and instead those of the vulture capitalists who prey on debt distressed countries like Zambia. It is not a new situation for the country. In the early 1980’s as the country which was welfare orientated struggled to meet its external debt it began to give in to a series of IMF/ World Bank prescribed austerity policies which saw the cutting of public expenditure on welfare subsidies for the poor, like maize meal a staple food. These cuts, which occurred within the context of a new epidemic HIV/AIDS saw a significant drop in the life expectancy, as people struggled to meet their nutritional needs and as the country failed to borrow funds for its health sector. These combined factors saw a significant drop in the country’s life expectancy, and a national crisis of orphans.
Making matters worse, from the 1990’s the rapid and obscure privatisations of key sectors of the national economy, like the mines,(also part of the previous IMF/World Bank policies) saw the de-industrialisation of the countries nascent industrial sector and the laying off of over two thirds of the country’s working skilled populations. These policies decimated the skills sector of the country, and killed productive sectors of the economy, as it was steered towards a speculative, rather than productive one.