With six successful democratic elections since 1991, Zambia is known for its political stability. The next general elections are scheduled for August 11, 2016 which will be guided by the new constitution ratified in January 2016. Major constitutional changes include reduced presidential powers, introduction of 50 + one vote for presidential elections, vice president voted by the electorate, and a minimum of Grade 12 academic qualifications to qualify for a parliamentary seat.
Zambia’s economy grew at an average annual rate of 7% between 2010 and 2014. However, global headwinds and domestic pressures have strained the Zambian economy. Consequently, growth in 2015 fell to an estimated 3% (compared to 4.9% in 2014) following a six-year low in copper prices, increasing power outages, and El Nino-related poor harvests. Growth is expected to remain around 3% in 2016, subject to the 2016 harvest, the mining industry’s reaction to softer copper prices, and stabilization of the power situation. The benefits of gross domestic product (GDP) growth have accrued mainly to the richer segments of the population in urban areas. Zambia has a very unequal income distribution (Gini coefficient = 55.6).
The falling copper prices, exports and foreign direct investment (FDI) have weakened the economy. Copper prices declined by almost a third from their peak in February 2011 to $4,595/ton in February 2016 (LME) and are forecast to remain soft until 2018 as global supply currently exceeds demand. The mine closures in 2015 led to the loss of over 7,700 jobs. Sixty percent of the population lives below the poverty line and 42% are considered to be in extreme poverty. Moreover, the absolute number of poor has increased from about six million in 1991 to 7.9 million in 2010, primarily due to a rapidly growing population.
The Zambian government is in the process of developing the new 7th National Development Plan 2017-2021 (7th NDP). It provides an opportunity to prioritize government objectives towards poverty reduction and strengthening the linkages between budgeting and planning. It is part of the cascading system of planning that commenced with the National Vision 2030 prepared in 2005 and breaks down to rolling annual plans. A critical legislation in this respect is the Planning and Budgeting Bill 2015, which is expected to be considered by parliamentarians in October 2015. A final draft of the 7th NDP shall be distributed for public discussion just before the elections in August 2016.
Last Updated: Apr 08, 2016