Let’s Work Partnership Launches Value Chain Analysis and Shares Preliminary Jobs Diagnostics Findings for Zambia

February 10, 2016

The Let’s Work Partnership recently met with government officials, donors, the private sector, and other key stakeholders in Zambia to share the preliminary findings of the Zambia Jobs Diagnostic and to launch the Let’s Work’s Zambia Value Chain Analysis in the agriculture and construction sectors. Both products will be used to support the design of a forthcoming World Bank project aimed at creating economic diversification for more, better, and inclusive jobs in Zambia. The project will include a focus on agribusiness/agro-processing opportunities. The analytical work provided by the Let’s Work Partnership will seek to ensure that interventions aimed at diversifying Zambia’s economy are selected based upon their impact on jobs.

Zambia is a country with a rapidly growing workforce, which enjoyed unprecedented economic growth from 2000 to 2013 without making much of a dent in its poverty headcount.  In fact, the proportion of people below the $1.90 per day PPP in 2011 rose from 60.5 percent in 2006 to 64.4 percent in 2010, despite annualized average real economic growth at 8.7 percent that would have ranked Zambia 11th out of 195 countries in the World Bank’s World Development Indicators (WDI) database.  

Now the economy faces headwinds in a year that politicians face the polls.   A drought has led to hydro power shortages and is expected to affect this and next year’s food crops.  The dominant copper sector, privatized in the late 1990s, which propelled exports, investment, and service driven growth in Zambia for a decade, is facing lower international prices as demand from China declines. For the first time in 20 years, Zambians are starting to talk about economic diversification again.

Agriculture accounts for half of the non-copper exports, 60 percent of all jobs, and closer to 80 percent of jobs outside of main cities. Hence, the expansion of exports in the food production and agro-processing sectors could help cushion the economy from the falling demand of copper. This is especially if small-scale farmers and informal firms can be encouraged to enter the supply chains of larger, exporting, agro-processing firms.  The Zambia Jobs Diagnostic shows that agro processing firms in Zambia are more spatially diffused than other manufacturing firms, and are located in areas of high poverty density, around the main cities of Copperbelt, Lusaka, and Southern Provinces.  Hence integrating smallholders into the supply chains of leading firms in these areas could – in principle - increase rural incomes.  To achieve this, investments in cooperatives, better crop storage, consolidated loads, and out-grower schemes for small holder farmers will be required.  But there is potential because formal sector firms operate in broadly the same product markets as self-employed Zambian farmers: i.e. grain, oil seeds, and livestock.  

In addition to animal feed, dairy, and livestock sectors, which have been identified as promising for jobs, the Value Chain Analysis will seek to identify solutions that can integrate smallholders into selected value chains that have yet to be analyzed; namely in the poultry, aqua-culture, and construction sectors.  In the case of poultry, focus will be on (chicken) layers and the production of broilers by smallholders and linking their production into medium and large scale processors. With regard to aquaculture, the emphasis will be on comparing both pond and lake-based production, with particular attention on quality and availability of fingerlings.  As for the construction sector, a labor skills assessment will be carried out in association with residential housing construction. The jobs-focused analysis of these value chains is expected to shed light on key challenges and constraints restricting growth and competitiveness of a sector, and in turn limiting employment and income generating opportunities in the local economy. 

 The Zambia Jobs Diagnostic is being conducted in collaboration with the Zambia Institute for Policy Analysis and Research (ZIPAR), and will be finalized in the coming months. The Value Chain Analysis is being carried out by a consulting firm, Global Development Solutions (GDS), which is well-versed in the jobs-focused approach, and in collaboration with technical experts in each sector, based in Zambia.