Zambia presents her Poverty Reduction Strategy in this document. The document is divided
into four parts. Part one is the overview and it contains background chapters like this
executive summary, the macroeconomic background, the poverty profile of the country, and
an outline of the central position of good governance in poverty reduction. Parts two and three
outline the strategies for reducing poverty with the former focusing on the economic and
social issues while the latter focuses on the required infrastructure support. Part four outlines
the issues relating to the implementation and monitoring of the PRSP; this is followed by
appendices. Appendix 1 describes the participatory process that was followed in preparing the
Zambian PRSP. Appendix 2 is a summary of the priorities for poverty reduction expressed by
the provincial delegates, while Appendices 3 and 4 respectively are policy matrix tables and
tables on the indicators for measuring progress in the key policy areas.
Involving many stakeholders in the preparation of this document has enriched it and deeply
grounded its ownership in the country. Stakeholders were involved at every stage of its
preparation including at the level of conceptualising its roadmap through a national
sensitisation workshop. This collaboration was extended into formation of sector working
groups drawing participants from different interest groups to design sector specific
programmes for poverty reduction, which became the main ingredients of this PRSP. The
document has also benefited from wide consultations with rural areas, political leaders and
from previous consultative processes. The full details of the consultative process are
contained in Appendix 1.
Zambia, which until two decades ago was one of the most prosperous countries in Sub-
Saharan Africa, now ranks as one of the Least Developed Countries. The majority of the
people suffer from weak purchasing power, homelessness, and insufficient access to basic
necessities such as education, health, food, and clean water. Poverty can be defined in the
Zambian context as lack of access to income, employment opportunities, normal internal
entitlements for the citizens to such things as freely determined consumption of goods and
services, shelter and other basic needs of life. Currently, around 73 percent of Zambians are
classified as poor. Poverty is more prevalent in rural areas compared to the urban areas (83
percent and 56 percent respectively) but it has risen faster in urban areas lately due to failing
industries and rising unemployment. Most of the rural poor are small-scale farmers followed
by medium-scale farmers.
Poverty in Zambia, like elsewhere, is multi-dimensional and it is due to complex factors, both
personal and societal. Rural poverty is largely attributed to poorly functioning markets for
agricultural output and to low agricultural productivity because of reliance on very basic
implements as well as low utilisation of agricultural inputs. The majority of the rural and
urban poor earn livelihoods from small-scale agriculture and a variety of informal incomegenerating
activities that tend to be short-term, seasonal, and poorly rewarding, a
phenomenon that has generally resulted in severe food insecurity and the attendant high
prevalence levels of malnutrition among both children and adults.
Most fundamentally, however, the failure of Zambia’s economy over the past thirty years,
evidenced by a per capita GDP that is only a fraction of the level at independence, has had the
most telling effect on poverty in the country. Mining, the driving force in the Zambian
economy, declined for a long time, pulling down other sectors that depend on it. No major
substitutes from other economic sectors came on stream. This has resulted in reduction in
gainful employment and in failure by the state to provide basic services like education, health,
and water it provided so well in the past. In the 1990s, the HIV/AIDS pandemic and other
diseases have worsened the poverty situation. At the time when resources were already low,
HIV/AIDS has increased the disease burden beyond the individual level to adversely impact
on the economics of the family, the health system, the working environment as well as human
capital and many others.
Even with diminished resources, poverty would have been less in Zambia with better planning
and, in particular, with superior prioritisation of resource use and better governance in
general. This has not always been the case.
In summary, the worsening poverty trend in Zambia is primarily a product of:
- Lack of economic growth while the population has more than trebled since
independence.
- Inadequate or inappropriate targeting of the poor and vulnerable people as evidenced
by inappropriate budgetary locative patterns that have generally biased resources
against pro-poor interventions.
- Weak integration of the poor, particularly small-scale farmers, into the market.
- Absence of well-conceived livelihood approaches that address rural and urban
poverty.
- Poor people’s weak access to real assets due to unfavourable land ownership laws and
unsupportive land tenure systems that have worsened labour and land productivity.
- Weaknesses in governance in both its economic and political dimensions.
Little can be achieved to reduce poverty unless measures are taken to revive Zambia’s
economy. Accordingly, Zambia’s PRSP focuses on measures to achieve strong sustained
economic growth of between five to eight percent per annum. A growing economy that
creates jobs and tax revenues for the state is a sustainable powerful tool for reducing poverty.
This growth should as much as possible be broad-based, thereby promoting incomegeneration,
linkages, and equity. In the short to medium term, uncertainty in the critical
mining industry (details are provided below) will dampen Zambia’s growth objectives and
also threaten the viability of implementing this PRSP. However, this is considered to be a
temporal setback, as the country remains endowed with great mining potential.
On several grounds, agriculture in Zambia combines the virtues of growth and equity and it is
in this regard that enhanced agricultural productivity is being given the highest priority under
this PRSP. Zambia has abundant arable agricultural land and supportive agro-ecological
zones, which combined with abundant human resource base, can propel increase in output. On
equity, it is noted that the poor in Zambia are predominantly in agriculture. If the sector grows
and measures are put in place to include the poor in this growth, poverty will be reduced. The
creation of conditions that enhance long-term innovative improvement of the productivity of
agricultural resources, particularly smallholder farmers’ land and labour is, therefore,
considered crucial. A similar level of importance is being placed on the building and
consolidation of the requisite credit markets for financing new investments in the sector as
well as the improvement of marketing infrastructure for a more efficient flow of larger
volumes of produce.
Given Zambia’s vast unexploited land resources, she will also encourage large-scale
agriculture farming. The efficiency and quick response of this sector is considered to be
crucial as Zambia faces an uncertain economic future following the announcement by Anglo
American Corporation to pull out of mining interests in Zambia . The case for successful
diversification from copper mining has never been more urgent, and commercial agriculture is
envisaged to play a major role in this.
Zambia plans to shift emphasis towards producing goods for export because the limited
domestic market is a barrier to growth. The list of known agricultural products where Zambia
has both comparative and competitive advantage includes coffee, cotton, groundnuts, flowers,
paprika, and many others. These products will be grown where it is ecological suitable. Both
large-scale and small-scale producers (under outgrower schemes) will be encouraged to
produce these items.
The suitable ecological zones for some of the proposed export crops are in areas where the
bulk of the land is under traditional title. If large estates, commercial farms and smallholder
outgrower schemes are to be established there, it will require establishing new farming blocks
under the 99-year leasehold. The availability of such land will be advertised to investors while
providing outgrower farms for the local people. In this way, rural areas will attract
investments, employment, and business opportunities. Formally establishing new farming
blocks will also bring about a more open, transparent and systematic way of alienating land in
rural areas with the interests of the local people secured, as opposed to the current situation
where some people, sometimes without development capability, acquire large tracks of land
freely for speculation.
To facilitate faster and diversified agric ultural activity, the PRSP also places a high premium
on infrastructure development, particularly rural roads, and this is well reflected in the
resource allocation pattern during the PRSP period. To encourage rural-based agricultural
processing and mechanisation, the energy sector is also receiving priority attention.
Although agriculture is the priority, Zambia also plans to see growth from other economic
sectors. This is because, in fact, the surge in unemployment leading to increased urban
poverty in the recent years emanated from non-agricultural sectors, especially mining and
manufacturing. It follows, therefore, that reviving these sectors can have powerful impact on
reducing urban poverty. For mining, Zambia had great hope that after privatising the industry
copper exports would be revived, pulling the rest of the economy with it. The government,
therefore, stood ready to invest into new public infrastructure, where justifiable, to facilitate
the opening up of new large mining projects in prospective areas like Lumwana in the
Northwestern Province. The pull out by Anglo American Corporation is, therefore, considered
a setback. Nevertheless, Zambia will for a long time remain a mining country due to her
mineral resources. She will, therefore, continue to work hard to interest private sector
investors to tap into this enormous resource. For now her focus is on preventing the premature
closure of the existing mines, as this will have devastating consequences on the
economy and, in particular, on poverty.
For tourism, the plan envisages two broad interventions – national and zonal, both of which
are expected to encourage investment in the sector. National interventions include
rehabilitation of roads in tourist areas, rehabilitation of museums, tourist marketing, and
human resource development. Zonal development refers to intense development work in
identified tourist areas to make them attractive to tourist investment. It includes building or
rehabilitating access roads, tourist roads, and airports where appropriate, and power (rural
electrification).
Significantly, it also includes finding world-class investors (comparable in status to the Sun
International) in the respective development zone, who will be the key engine in the area.
Smaller lodges can feed off them. Within this framework, formulas have been designed
regarding how the local people can participate in and benefit from the tourism expansion. The
first priority zone is the Livingstone and Victoria Falls area because it promises the greatest
impact with spillover effects to other parts of Zambia. It is followed by Kafue National Park
(physically linking with Livingstone), the Lower Zambezi, and the Lusaka area. Other areas
will follow in subsequent PRSPs.
Regarding industry, the strategy focuses on choosing winners or industries that have the best
chances of export success after considering comparative advantage and existing trade
agreements. These are likely to be processors of primary goods, such as agricultural and forest
products. It is planned that some of the agricultural goods suggested for production above
should have value added before being exported. Another area is manufactured items required
by the mining industry. While exports increase the domestic market for local goods, unfair
trade practices from abroad and smuggling reduce the opportunities for local industries.
During this PRSP, efforts to have an even playing field will be intensified. Capacity building
to this effect will be undertaken.
For growth to occur in the key sectors identified above, certain basics need to be in place.
Functioning rail and road transport are among the key. Being landlocked, Zambia’s export
competitiveness depends on efficient transportation. Roads, including the rural feeders, will
be rehabilitated and maintained regularly. Zambia Railways will be concessioned to private
operators. In the petroleum sector, the products should come in at the lowest possible cost.
There will be enhanced private sector participation in procurement and distribution to attain
this objective.
In addition, plans are under way already, and will continue in the PRSP, to rehabilitate
electrical energy infrastructure. Also, private investors will be encouraged to construct a new
electrical generation plant on the Kafue River to increase power by 600 megawatts. This is
expected to meet the rise in demand from both the domestic and the East African markets.
Rural electrification will be accelerated. To ensure sustainability, the priority areas for rural
electrification will be in farming blocks so as to create a link between energy and production.
For the majority of poor Zambians depending on wood fuel, the objective is to develop more
efficient wood energy utilisation in order to reduce demand on the forests, whic h provide this
type of fuel.
Dams and delivery canals will be constructed on rivers, by either the private sector or the
government, to generate irrigation water for sale in farming blocks producing high value
crops. Another priority will be on providing clean and safe water in both urban and rural
areas. This is a mammoth exercise that can only be completed gradually over a period of
several years.
All interventions will have to be within the overall resource envelope in order to ensure fiscal
and balance of payments sustainability. After some financial projections, it is estimated that a
total of $1,200 million will be spent on PRSP programmes between 2002 and 2004. This is
made up of ongoing (pre-PRSP) and new programmes. Donors will finance 67 percent of the
total cost while the rest will come from internal resources. The success of the first Zambian
PRSP is, therefore, dependent on donor goodwill. However, Zambia will also work hard to
reduce costs of general administration in the medium-term so as to free her own resources for
the PRSP.
For the same reason of scarce financial resources, Zambia will strive hard to meet
requirements to access debt relief from donors, and she hopes that they too will deliver.
Zambia already operates on a very tight budget and the expected debt relief (HIPC and non-
HIPC) amounting to $1,300 million between 2002 and 2004 constitutes a significant portion
of the expected budgetary resources that will assist to finance the PRSP.
Given the absence of sufficient domestic savings, Zambia will work hard to attract quality
investors to complement her domestic investors in exploiting the export potential. In
particular, credible foreign investors with ready cash to invest will be encouraged, especially
on large projects that can generate substantial spin-offs.
The PRSP also focuses on the social sector activities with a view to enhancing their service
delivery effectiveness. In this regard, the health and education sectors are among the top
priorities in the next three years. To the extent that the HIV/AIDS pandemic is threatening all
the developmental achievements of the past decades through human resource depletion, this
field is also receiving PRSP priority.
Additionally, in recognition of the high level of poverty-induced destitution, particularly
among the aged and disabled, and taking into account those affected by the collapsing
‘traditional’ social security system of the extended family (e.g. street children and the blind),
the PRSP explores how best social security-related aspects pertaining to, inter alia, statefunded
safety nets are to be managed and financially supported. A sizeable amount of
resources has been earmarked for this, bearing in mind the existing absorptive capacity
limitations vis-а-vis resource utilisation. This component, however, calls for better targeting
of the core poor and the most vulnerable people. It is recognised that the broad-brush
classifications of the poor does limit opportunities for better targeting. Thus, to facilitate a
more informed basis for prioritisation and targeting, better tools for the identification of the
extremely poor or destitute people, that evidently require special poverty alleviation attention,
have to be developed during the course of PRSP implementation.
To realise the above priority goals and objectives, the issue of governance must be addressed
and a sizeable amount of resources has been allocated for this. At the economic level, this
entails making wise priorities for spending public resources and improving government’s
ability to implement programmes. There will be wide consultations with the citizens through
their elected representatives to derive public priorities. Good governance also entails
promoting accountability and efficient public expenditure management; participatory budgeting,
greater transparency in public procurement and contracting procedures, including enhancement of
government finance, accounting and internal audit systems and procedures; and improved financial
management and expenditure tracking efforts. In the political realm this calls for, inter alia,
separation of powers, legislative development, upholding the rule of law, improving oversight, and
stumping out corruption (emphasising the need for a policy of ‘zero tolerance’ of corruption).
Quickening the realisation of the Public Service Reform Programme and the accompanying policy
of decentralisation (both political/administrative and fiscal decentralisation) is considered as an
important prerequisite to the attainment of the above goals, objectives, and ideals of the PRSP.
With all these measures, Zambia is aiming to achieve an economic growth rate of 4 percent by the
year 2004, and this should set the stage for higher growth in later years. Zambia aimed for higher
economic growth in the next three years but the sudden uncertainty in the mining industry described
above calls for caution until the future becomes clearer. This uncertainty, in fact, poses one of the
greatest risks to the successful implementation of the PRSP and, to a large extent, explains Zambia’s
anxiety to ensure that economic diversification from mining does succeed as a matter of great
priority. However, it is expected that even the modest growth rate projected will push headcount
poverty back from 73 percent in 1998 to 65 percent by 2004, where it had been in 1996. At this
stage, no detailed analysis has been made on the incidence of the proposed PRSP interventions
beyond the assumption that strong economic growth and social sector spending are good for poverty
reduction. While this is generally true, specific detailed incidence analysis will be made later on.
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