Zambia Economic Brief: Recent Economic Developments and the State of Basic Human Opportunities for Children

December 19, 2012

  • Zambia’s economy is growing faster than the economies of most of its mineral-producing and non-mineral producing peers
  • Economic growth has been led by a strong performance in mining, manufacturing, services and agriculture;
  • Despite strong economic growth in the last decade, Zambia has made very little progress in reducing poverty and providing basic opportunities for children still remains a challenge

LUSAKA, December 19, 2012—Despite slowdowns in the global economy, the Southern African nation of Zambia is showing strong gains in its economic performance with an expected growth rate of 7.3 percent in 2012, up from 6.8 percent in 2011. 

Gains have been led by robust growth in construction, transport, communication services, manufacturing and agriculture, according to the first Zambia Economic Brief published December 11 by the World Bank.

The Brief, a short economic update that takes the pulse of Zambia’s economy, will be published twice a year and will include the World Bank’s assessment of recent economic developments in the country, the outlook in the short- to medium-term, as well as analysis on a specific development topic or theme.

The first issue, Recent Economic Developments and the State of Basic Human Opportunities for Children focuses on Zambia’s continued robust growth, fiscal outcomes, and capital inflows at the end of 2012 against the backdrop of the performance of other Sub-Saharan and global economies.

The Brief stresses the need for the government to spend borrowed and owned resources more prudently. While acknowledging continuing strong prospects for growth, it highlights considerable risks stemming from global uncertainties.

The Brief finds that opportunities for social, economic and political success in the country are often based on a child’s predetermined circumstances such as gender, ethnicity, place of birth, and family origins.

A person should not have fewer opportunities in life just because she is a girl or born in a rural area, according to the report.

With the largest driver of unequal access to opportunities in Zambia being a citizen’s province of birth, the Brief urges an increase in investments in lagging regions, particularly in infrastructure services such as drinking water, sanitation and electricity.

Finally, the Brief suggests additional services for children vulnerable to multiple forms of deprivation. For instance, Zambian children living in rural areas and with household heads who did not finish primary school, are much more likely to not finish primary school themselves, to suffer from acute malnutrition, or to have little access to sanitation facilities.

Among the Brief’s findings:

  • Growth in 2012 is expected at 7.3 percent even with a slight contraction in mining, brought on by a decline in global copper prices. The medium-term forecast is also above 7 percent for 2013-14.
  • Growth has been broad-based, led by strong performances in agriculture, manufacturing, and services.
  • Agricultural growth has been accompanied by increased diversification of production, with a higher share of non-maize crops—such as wheat, barley, sorghum, and soybean—partly in response to  uncertainty about the government’s maize-buying program.
  • Construction growth accelerated in recent years in response to increased demand from rising urban incomes and a marked pick-up in investment in mining and roads. Growth in transport services is also a response to strong demand from other sectors of the economy.
  • Zambia’s recent fiscal policy has been expansionary. After grants, the country’s average overall balance over 2010–12 was -3.5 percent of GDP.