Overview

  • Zambia, 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 limited impact on poverty. Zambia ranks among the countries with highest level of inequality globally.  As of 2015, 58% of Zambians earned less than the international poverty line of $1.90 per day (compared to 41% across Sub-Saharan Africa) and three quarters of the poor lived in rural areas

    The Zambian economy grew by 3.7% in 2018 compared to 3.5% in 2017. The slight increase in growth reflects strong performance of services (in particular wholesale and retails, pensions, and information and communication). However faster recovery was undermined by lower crop harvest and weak a fiscal performance that led to an accumulation of new public expenditure arrears and government domestic borrowing at high yields and impacted private sector activity. Agricultural sector growth was negative, reflecting overall poor harvests in the 2017-18 farming season.

    After staying within the authorities’ band of 6-8% in 2018 through April 2019, rising inflationary pressures have seen the Consumer Price Index inflation breach the upper bound for four consecutive months since May, and was at 9.3% in August—the highest since October 2016. In response, the Bank of Zambia’s Monetary Policy Committee (MPC) tightened its monetary policy stance in May, increasing its policy rate by 50 basis points to 10.25% for the first time in over a year. At its August meeting, the MPC noted that inflationary pressures will persist over the next 12 to 24 months, driven by increasing food prices, fiscal pressures, and risks emanating from the drought situation. However, the committee kept the policy rate unchanged, considering risks to further economic slowdown and to financial stability.

    The current account deficit widened from 1.5% of gross domestic product (GDP) in 2017 to 2.6% in 2018, reflecting increased deficits in income and services accounts amidst a narrowing trade surplus. With reduced capital inflows, the overall balance of payments was financed by a drawdown in official reserves. Gross official reserves therefore fell to $1.6 billion (1.8 months of imports) at end-December 2018 from $2.1 billion at end 2017 as at end-June 2019. The current account has also registered a deficit of $414 million in H1 of 2019, partly reflecting higher interest payments on public debt, which outweighed the recorded trade surplus. Correspondingly, the exchange rate has faced some pressures during 2019, depreciating by about 10% to about ZMK13.0/US$ through August, and reserves fallen further to $1.4 billion (1.7 months of imports)

    Public and publicly guaranteed (PPG) debt has nearly quadrupled from 20.5% of GDP in 2011 to 78.1% of GDP in 2018, driven by accumulation of both external and domestic debt. The debt composition has also significantly shifted towards commercial and Non-Paris Club bilateral creditors, exacerbating the country’s exposure to exchange rate and market risks. Overall PPG debt is expected to increase to 98% of GDP by 2020, while external public and publicly guaranteed debt service obligations over 2019-21 are estimated at $4.6 billion. The 2019 WB/IMF Debt Sustainability Analysis concludes that Zambia’s risk of overall and external debt distress remains very high and that public debt under the current policies is on an unsustainable path.

    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 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).

    Last Updated: Oct 13, 2019

  • World Bank Country Partnership Strategy for Zambia

    The World Bank’s Country Partnership Framework (CPF) for Zambia for the period 2019-2023 is closely aligned with the government of Zambia’s National Development Plan and Vision 2030. The CPF is supporting Zambia in achieving its development goals, by focusing on three pillars; promoting opportunities and jobs for the rural poor, investing in human capital, and building resilience.

    The strategy is aligned with the government’s development priorities.  Zambia ranks among the countries with highest levels of poverty and inequality globally. 58% (2015) of Zambia’s 16.6 million people earn less than the international poverty line of $1.90 per day (compared to 41% across Sub-Saharan Africa) and three quarters of the poor live in rural areas.

    Zambia is Africa’s second-largest copper producer which 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, with limited impact on poverty.

    The World Bank portfolio in Zambia has a total net commitment of $1,168 billion. The portfolio comprises 13 National International Development Association (IDA) projects ($911 million, including guarantees for Scaling Solar of $3.7 million), four regional IDA projects ($162 million) and the balance is in respect of Trust Funds ($95 million). Agriculture accounts for 16% of the World Bank portfolio, infrastructure (roads, water and electricity), accounts for about 47% of the Bank’s portfolio, and the average life of a project is 3.8 years. The other sectors are currently as follows: environment (11%), agriculture (10%), finance and private sector development (4%), and human development (22%).

    Last Updated: Oct 13, 2019

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

    The GEWEL  project   is covering school fees for 25,239 girls from the poorest households in 10 provinces of Zambia. The figure exceeds the original end-of-project target of 14,000 girls. The female drop-out rate in GEWEL districts fell from 5.8 to 3.9%, compared to 3.8 to 2.9% in non-project areas. Additionally, over 34,000 women have been supported by the program’s livelihoods package so far and targeting is ongoing for a further 41,000 women to start up and maintain household enterprises and increase income. GEWEL is implemented by the government with financial support from the World Bank.

    Improving opportunities for women to pursue careers in research

    The Centers of Excellence are providing opportunities for women to pursue careers in research at the highest levels through bursaries for masters and doctoral programs in science, technology, engineering and mathematics (STEM) particularly in sustainable mining at Copperbelt University and human and animal diseases at the University of Zambia. So far, a total of 82 female master’s students have benefited from the program either as graduates or currently undertaking studies. An additional 18 female students are currently enrolled in PhD programs at both Africa Centers of Excellence (ACEs). The participation in comparison to male students is increasing annually, and currently stands at above 40%.

    Increasing access to electricity in Zambia

    The World Bank is supporting the Zambian government on electricity access initiatives and continues to invest heavily in access across Zambia. Between, 2009 and 2015, the Bank financed the connection of approximately 91,000 households – benefiting almost 500,000 people. More recently, through the Electricity Access Project, Bank is also supporting subsidizing the cost of connection to the grid for 22,000 low-income households and about 1,000 Small Enterprises in rural areas.

    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 48.5% in March 2018 in project areas. Full immunization coverage for children below one year has also increased from a baseline of 80% in 2013 to 89.5% in March 2018 in project areas.

    Southern Africa Tuberculosis and Health System Support

    Southern Africa Tuberculosis and Health System Support project is a regional center for occupational lung diseases established in Zambia’s copper belt to serve the Southern Africa Development Community (SADC) region. The centre is facilitating laboratories compliance with regionally harmonized standard operating procedures for surveillance of Multi Drug Resistant Tuberculosis (MDR-TB) case notification. By Mid-Term of the Project, Tuberculosis case notifications in target areas increased from 25,752 in 2016 to 40,134 by March 2019. The treatment success rate has increased from 85% at baseline (2016) to 90% by the close of 2018.

    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 National Financial Inclusion Strategy (NFIS) coordination structure that supports the 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: Oct 13, 2019

  • 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 in Zambia. The World Bank Group’s strategy adheres to the principles agreed with other cooperating partners supporting Zambia development efforts, as articulated in the Joint Assistance Strategy for Zambia (JASZ), which is comprised of 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 $861 million, two trust-funded projects ($54 million) and four regional projects valued at $162 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 13 projects, totaling $86.5 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 regional trade. Zambia is part of the Common Market for Eastern and Southern Africa (COMESA) and the Southern African Development Community (SADC) bodies that promote regional trade. Overall, Zambia has performed well in all dimensions of the regional integration index, ranking second in COMESA and fourth in the SADC region.

    Last Updated: Oct 13, 2019

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LENDING

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

*Amounts include IBRD and IDA commitments


PHOTO GALLERY

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In Depth

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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