Zambia is Africa’s second-largest copper producer achieved middle-income country status in 2011, during a decade (2004-2014) of impressive economic growth, averaging 7.4% per year. However, growth only benefitted a small segment of the urban population and had
In 2018, the Zambian economy was projected to expand by 3.5% compared to 3.4% in 2017. The slight increase in growth reflects
However, faster recovery was undermined by lower crop harvest, the accumulation of new public expenditure arrears and government domestic borrowing at high yields. In the first half of 2018, K2 billion in arrears were accumulated. As a
The current account is estimated to have remained wide above 4.5% of GDP. With reduced foreign direct investment (FDI) and portfolio inflows in 2018, the current account was largely financed by a drawdown on foreign currency reserves, which fell to $1.6 billion (two months of imports) in October 2018. External and fiscal pressures exerted pressure began to put pressure on the kwacha (which depreciated by 12% in 2018, before stabilizing at approximately $1= K12.
The depreciation has not substantially affected inflation, which has largely remained in its medium-term range of 6-8%. As a result, the Bank of Zambia kept a broadly neutral monetary policy stance 2018, maintaining its policy rate at 9.75% (the lowest level since January 2014) at all its 2018 MPC meeting. Looking ahead, there are several risks to medium-term inflation that may necessitate monetary policy tightening in the coming months
Zambia is large and landlocked in the center of southern Africa. It 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).
Zambia is considered a stable country in Africa with successful democratic elections held every five years. The next elections will be held in 2021. The current President is Edgar Chagwa Lungu of the Patriotic Front Party was re-elected in August 2016, in a closely contested presidential race with his main rival, Hakainde Hichilema of the United Party for National Development (UPND).
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 informed the Bank’s Country Partnership Framework (CPF), for the period 2019–2023. The CPF focus areas are:
- Increase opportunities and jobs for the Rural Poor
- Increase public Services and Social Protection to build a healthy and skillful workforce
- Build Resilient Institutions
The CPF is aligned to government’s 7th National Development Plan, 2017–2021.
The five pillars of the seventh NDP:
- 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 seventh 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: Mar 27, 2019