Overview

  • In 2017, Zambia's economic growth to recovered to an estimated 3.9% (from 3.8% in 2016) on the back of a bumper crop harvest and better electricity supply. Faster economic recovery was dragged by large government payment arrears, which exerted pressure on the financial sector. Non-performing loans rose to 12.3% of outstanding loans, and lending to the private sector declined, thus constraining private investment and consumption.

    Growth is projected to strengthen to above 4%in 2018 and over the medium-term. The clearance of arrears and the pursuit of accommodative monetary conditions should bolster the recovery of the financial sector and unlock consumption and investment lending. High international copper prices and improved domestic production from newer and recently refurbished mines is expected to support exports.

    High copper prices have eased external pressures, leading to a stable kwacha, which, together with a bumper harvest, helped contain inflation within the medium-term target of 6-8%. These improvements prompted the central bank to ease monetary policy at all the past six monetary policy committee meetings, for a total policy rate cut of 575 basis points. 

    However, the fiscal-debt remains fragile, as it remains higher than necessary to calm debt growth, despite being below its 2017 budget target. External debt rose US$8.7 at end-March 2018 from US$7.9 at end-2017, and total public and publicly guaranteed debt is now estimated to be close to 61% of gross domestic product (GDP). In October 2017, a joint IMF-World Bank Debt Sustainability Analysis elevated the risk of external debt distress to high from medium. 

    Large and landlocked in the center of southern Africa, Zambia shares several of its key geographical and economic features with neighboring Zimbabwe—the Victoria Falls, Lake Kariba (and its hydroelectric capacity), and a stretch of the Zambezi River. It also borders the southern tip of Lake Tanganyika and Tanzania, as well as the Democratic Republic of the Congo, Angola, Botswana, Mozambique, and Malawi. Its population, much of it urban, is estimated at about 16.5 million (2016).

    Though stable for most of its post-colonial history, the country entered a new phase when President Edgar Lungu and his Patriotic Front (PF) government were re-elected in a closely contested presidential race in August 2016. Lungu's main rival, Hakainde Hichilema, was detained for several months in 2017; international mediation secured his release.

    The election gave Lungu a five-year mandate. He has called for an end to moral decay and national transformation to address high levels of poverty. Zambia will revise its Lands Act to avoid the indiscriminate and illegal sale of land in the country. The need to revise the act was initiated by Lungu, who observed the government needed to come up with revisions that guarantee sovereignty over land, a key natural heritage.

    A Systematic Country Diagnostic (SCD) has been prepared to augment the World Bank’s understanding of the sort of mechanism needed for poverty reduction in Zambia. The SCD has been used to inform the Bank’s Country Partnership Framework (CPF), which is being developed for 2017–2023.

    The government has launched its 7th National Development Plan, 2017–2021,   calling for a fundamental shift in the way resources are allocated. It’s five pillars are:

    • Economic diversification and job creation
    • Poverty and Vulnerability
    • Reduced Developmental Inequalities
    • Enhancing Human Development
    • Conducive Governance Environment for Economic Diversification

    The strategic goal of the 7th National Development Plan is to create a diversified and resilient economy for sustained growth and social economic development. It will also include a results-oriented, performance management system to be used to measure the progress of its implementation.

    Last Updated: Apr 19, 2018

  • World Bank Country Partnership Strategy for Zambia

    The World Bank’s Country Partnership Strategy (CPS) for Zambia for fiscal 2013-2016 has been extended to 2017. It is closely aligned with the government’s Vision 2030 and the National Development Plans. The plans are organized around the theme of broad based wealth and job creation through citizenry participation and technological advancement. Specific development goals are to foster a competitive and outward-oriented economy to significantly reduce hunger and poverty and reach middle income status.

    The CPS has two areas of special emphasis. First, because of the potential fiscal windfall coming from the boom in copper export prices, the CPS supported improved expenditure management and effective use of revenue in collaboration and monitoring with the government and local stakeholders, to benefit as many households as possible.

    Second, because of the significant gaps between urban and rural areas, and the need for increased access to regional markets, the CPS also supported a program of investments in infrastructure that will increase economic opportunities for all Zambians through improved connectivity and integration, resulting in increased competitiveness.

    Currently, agriculture accounts for 18% of the World Bank portfolio infrastructure (roads, water and electricity), accounts for about 60% of the Bank’s portfolio, and the average life of a project is 3.8 years. The other sectors have continued to decline and their shares are currently as follows: environment (11%), agriculture (10%), finance and private sector development (8%), the public sector (8%), and human development (5%). Grants now account for about 18%of the current total net commitments while credits are at 82%.

    The World Bank (WB) is conducting the systematic country diagnosis and will be presenting its Country Partnership Framework (CPF) to the World Bank Board in FY17. The strategy is aligned with the government’s development priorities. In a country that displays both low income and middle-income characteristics, the strategy supports three objectives that speak to the dual nature of Zambia’s development challenges and opportunities:

    • Reducing poverty and the vulnerability of the poor
    • Improving competitiveness and infrastructure for growth and employment
    • Improving governance and strengthening economic management  

    Last Updated: Apr 19, 2018

  • Controlling livestock diseases in Zambia

    The Livestock Development and Animal Health Project has helped about 536,244 smallholders, of which 32% are women, with animal health services and matching grants. The has so far exceeded the target of 390,000 which was expected by June 2018. Of the 18 districts endemic with Contagious Bovine Pleuro Pneumonia (CBPP) in 2012, 11 have been cleared so far. The end target is 13 by June 2018. Cattle mortality rates have declined because of vaccination campaigns for CBPP, Foot and Mouth, East Coast Fever, and the cattle population has increased.

    Improving maternal, neonatal, child health (MNCH), and nutrition in Zambia

    The Health Services Improvement Project has contributed to an increase in childbirth deliveries attended to by skilled health providers in project areas, from a baseline of 27% in 2013 to 45% in 2016. The project end target is 57%.

    Girls’ Education and Women’s Empowerment and Livelihoods (GEWEL) Project

    In the first year of implementation, GEWEL exceeded its targets, reaching 21,252 extremely poor girls and women. By 2020, the program aims to scale up to almost 100,000 girls and women in half of the districts nationwide. The targeting of these girls and women builds on well-tested, national poverty testing techniques used under the national Social Cash Transfer Scheme, as well as participatory community methods. GEWEL is implemented by the Government of Zambia with financial support from the World Bank.

    Through the Sustainable Management of the Nyika Transfrontier Conservation Area Project, the World Bank has  contributed toward improving the management of the Nyika Transfrontier area by supporting the more effective management of biodiversity in the area.

    As result of the support, signs of illegal activity in Nyika National Park have been reduced from 0.22 to 0.11 because 65% of the park area is now being patrolled. The abundance indices of elephants have increased from 156 to 310, buffaloes from 99 to 164, and zebras from 112 to 279.

    Supporting Financial inclusion in Zambia

    The World Bank is supporting the government to implement the Zambia Financial Inclusion Country Support Program. The Financial Inclusion Country Support Project includes the provision of advisory services, capacity building, and knowledge, as well as convening services for policy and regulatory reforms to promote financial inclusion that build on existing projects and advisory services. A Country Support Program (CSP) has been developed by the World Bank team in partnership with the Ministry of Finance (MoF), Bank of Zambia (BoZ), the Securities and Exchange Commission (SEC), and the Pensions and Insurance Authority (PIA). Zambia has a well-established NFIS coordination structure that supports NFIS implementation

    Strengthening Climate Resilience in Zambia

    The Strengthening Climate Resilience Project has supported improving canals in the floodplains. Thirty-four secondary and tertiary canals have been rehabilitated, providing additional land to over 2,000 households; and (ii) in Mbeta Island of Sioma district, a natural lagoon is helping 66 vulnerable households (57 female-headed) to integrate fish farming, thus diversifying their sources of livelihood and promoting the use of a hitherto untapped resource. For sustainability, a National Standard Norms and Procedures Manual for the operation and maintenance of the canals has been developed. 

    Last Updated: Apr 19, 2018

  • The, African Development Bank, European Union, United Nations agencies, Germany Government, British Government, Swedish, Dutch, and United States are among the partners of the World Bank. The World Bank Group’s strategy adheres to the principles agreed with other partners supporting Zambia development efforts, as articulated in the Joint Assistance Strategy for Zambia (JASZ), and comprises highly selective targeted interventions that maximize the impact of government’s development efforts.

    The World Bank Group

    World Bank (WB) support to Zambia commenced in 1955, well before attaining its independence in 1964. As of March 2016, the WB has 14 active projects, including eight national International Development Association-financed projects with a net commitment amount of $577 million, two trust-funded projects ($53m) and four regional projects valued at $225 million. The International Finance Corporation (IFC) is planning to reinstall its Resident Representative in the Lusaka Country Office in the near future.

    The IFC has a significant portfolio in Zambia, mostly in agribusiness and financial services as well as manufacturing. The current IFC portfolio in Zambia includes 11 projects, totaling $215.3 million, which is made up of an investment portfolio of $55.9 million and pipeline to the value of $155.8 million. Multilateral Investment Guarantee Agency (MIGA) are also providing support for Zambia’s development.

    MIGA has about $101 million in commitments in Zambia and guarantees are helping agriculture, livestock and aquaculture development. A MIGA guarantee for Agrivision Africa (formerly Chayton Africa) is helping a large commercial farm in the Copperbelt Province to achieve efficient agricultural practices and expand capacity of a grain processing facility, thereby providing substantial demonstration effect to other farms.

    MIGA has also supported the Silverlands Fund through a multi-country Master Reinsurance Contract with the Overseas Private Investment Corporation in Silverlands Ranching Limited which is helping improve and develop a large cattle farm in Zimba, Southern Province.

    Regional Trade Facilitation

    Zambia has committed to implementing policy reforms to enhance trade along the North-South Corridor and other corridors. Acceleration of trade facilitation and administrative reforms, especially at border crossings, can help to achieve the goals of the North-South Corridor Conference in Lusaka in April 2009.

    Last Updated: Apr 19, 2018

Api


LENDING

Zambia: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments


PHOTO GALLERY

More Photos Arrow

In Depth

image

Growth Recovers

Better copper prices and wet weather mean growth is picking up, but Zambia could invest in agriculture and needs to pay off debt.

Apr 19, 2018

Africa's Pulse, No. 17, April 2018

A new analysis of African economies shows the region’s growth is projected to reach 3.1% in 2018, and average 3.6% in 2019–20.

Oct 30, 2017

Monitoring Progress in Policy

IDA, the World Bank’s fund for the poorest, contributes nearly 50% of its funds to 39 African countries.

Oct 30, 2017

International Development Association (IDA) in Africa

IDA, the World Bank’s fund for the poorest, contributes nearly 50% of its funds to 39 African countries.

Oct 30, 2017

World Bank Africa Multimedia

Watch, listen and click through the latest videos, podcasts and slideshows highlighting the World Bank’s work in Sub-Saharan Africa.

Doing Business in Zambia

The Doing Business report provides objective measures of business regulations and their enforcement. See where your country ranks.

Additional Resources

Country Office Contacts

Main Office Contact
Pyramid Plaza
Church Road, PO Box 35410
Lusaka, Zambia 10101
+260-211-373200
+260-211-252811
For general information and inquiries
Carlyn Hambuba
Communications Associate
+260 211 373 218
chambuba@worldbank.org
For project-related issues and complaints
zambiaalert@worldbank.org