Economic Management

In the past five years, Zambia has scored important successes on the economic front. Consistent economic growth has been recorded averaging 4.9 percent per annum, while macroeconomic stability has been strengthened with inflation falling to single digit levels and budget management has also improved. The Government of President Levy P. Mwanawasa, S.C has also succeeded in obtaining substantial debt relief through the Heavily Indebted Poor Countries (HIPC) and the Multilateral Debt Relief Initiative, thereby relieving the country of the previously high debt burden.

In the next four years, the Government will continue with implementation of prudent macroeconomic policies so as to consolidate macroeconomic stability. One of the main goals is to achieve higher and sustained economic growth of at least seven percent per annum, with agriculture, tourism, mining, and manufacturing continuing to be key areas of focus.

The Government will also strive to refocus public resources and efforts towards implementation of programmes that will have a quicker and more profound impact on the lives of the majority of the Zambian population.

Job and wealth creation remain a major development agenda for the Government. In the rural areas, the government will consolidate the gains already achieved in agriculture by further expanding interventions in marketing, extension services, animal disease control and live stock development. Infrastructure, especially feeder roads and irrigation facilities will be attended so as to increase productivity and access to markets.

In 2007, Government’s macroeconomic objectives are to:

(i) achieve a real Gross Domestic Product (GDP) of 7 percent
(ii) reduce inflation to five percent
(iii) reduce the Government’s domestic borrowing to 1.2 percent of GDP
(iv) raise international reserves to at least 2.5 months of import cover

With regard to fiscal policies, the Zambian Government in 2007 will continue to focus on contributing to macroeconomic stability, fiscal discipline, directing public resources to priority areas, and expanding the revenue base.

To complement fiscal policies, prudent monetary policies will continue to be pursued by the Bank of Zambia in order to reduce inflation to 5 percent in 2007. BOZ will confine its interventions in the foreign exchange market in order to smoothen fluctuations and build up international reserves.

Fifth National Development Plan:

In order to enhance economic management planning, the Zambian Government has developed and put in place the Fifth National Development Plan which will last for five years. The theme of the Plan is �Broad based wealth and job creation through citizenry participation and technological advancement�. The theme emphasizes wealth creation and empowering the citizens through job creation. It is envisaged that this will lead to poverty reduction and higher standards of living for Zambians.

The strategic focus of the Plan is economic infrastructure and human resources. On this basis the key priority sectors for public expenditure in the Plan are: infrastructure, agriculture, energy, water and sanitation, human resources development, education, heath and public safety.

The broad macroeconomic objectives for the Plan period (2006-2010) are as follows:

a) To accelerate pro-poor economic growth;
b) To achieve financial and exchange rate stability;
c) To sustain a viable balance of payments and external and domestic debt position.

With respect to the acceleration of pro-poor growth, the primary focus of economic policy remains that of reducing poverty through the implementation of policies that are both growth-oriented and pro-poor.

Focusing on pro-poor growth will ensure that the poor participate in the development process. The main growth objective is, therefore, twofold: (a) increase the overall growth rate to an average 7 percent; and (b) ensure that growth benefits the poor.

Infrastructure

The current Government is determined is committed to enhancing the construction, rehabilitation and maintenance of public infrastructure. In addition, the government hopes to achieve increased adherence to set standards and regulation of construction and maintenance. The rehabilitation and maintenance of roads countrywide continues to be high on the agenda of government.

The development of rail infrastructure is as critical as road infrastructure in facilitating economic development. Zambia, therefore, wishes to encourage investors, both local and foreign, to partner in the construction of a number of rail lines.

Agriculture

Food production and cash crops increased significantly in 2005/2006 agricultural season with a surplus of 160,000 metric tones of maize. This demonstrates that, with the support of good agricultural policies, effective and efficient delivery of inputs and favourable weather conditions, the agricultural sector can perform well.

In this sector, the resolve of the Government is to build on the successes already registered in the 2005/2006 season. The Government hopes to continue creating wealth for the Zambian people especially in rural areas and ensure that the country is food secure.

The strategy will involve the development of rural markets, provision of infrastructure, agricultural and financial services. In this regard, small scale farmers will continue receiving support under the fertilizer support programme.

Government will also not relent in its effort to utilize the capacity of the private sector in the development of the agriculture sector. Agribusiness will be supported in strengthening linkages with smallholder farmers through private sector participation in agricultural services delivery, equipment and input supply and output marketing.

In order to achieve the desired results in the agriculture sector the Zambian government has prioritized a number of programmes to be implemented in the coming years. Among them are:

(a) promotion of a well regulated and profitable irrigation sub sector that is attractive to both the public and private sector
(b) promotion of agricultural infrastructure and land development for sustainable production and productivity
(c) improvement of productive efficiency of the livestock sector in a sustainable manner
(d) promotion of fisheries development by ensuring effective utilization of fisheries resources
(e) encouraging private sector participation and promotion of a competitive, efficient and transparent private sector driven agricultural marketing and input supply system, and
(f) promotion of effective service delivery with emphasis on agricultural research and extension.

Land

The Zambian Government is determined to promote equitable access to land and security of tenure for the sustainable socio-economic development of the people. The Land policy is being reviewed to address the multitude of constraints in the acquisition of land in the country.

Mining

The Zambian government has been taking progressive strides to become a copper mining giant that the country once used to be. Factors that have combined to keeping the mining sector a risk-free and highly attractive investment destination, include the incentives being offered, the country’s fiscal regime and the provisions of the Mines and Minerals Act.

The long term vision is to have a vibrant and well organized mining industry contributing in excess of 20 per cent of gross domestic product. The sector is also expected to provide significant employment and contribute to the improvement of the living standards of the Zambian people.

Tourism, Environment and Natural Resources

Tourism continues to be one of the priority sectors on economic development agenda. This is because of the conviction that if well developed and managed, tourism can contribute significantly to the socio-economic well-being of the Zambian people through creation of employment and entrepreneurship activities for the youth. The sector has witnessed a steady growth in tourist arrivals in the past five years with a corresponding increase in earnings.

Over the next five years, Zambia will continue with its policy of private sector led tourism development with public sector facilitation. In this respect, government will continue with provision of infrastructure to attract investment to outlying areas, promotion and marketing of tourism at home and abroad. In order to improve the performance of the tourism sector, measures will be implemented aimed at reducing costs of doing business in the tourism sector.

Zambia will continue to spearhead policies and programmes for the protection of the environment and sustainable management of our natural resources. In this regard, a lot of effort is required in curbing rampant deforestation, pollution of water and air, as well as improper management of waste.

In addition, a national environment policy will soon be put in place and implemented. Local communities will be encouraged to participate in the management of their natural resources and share the benefits accruing from these resources.

Commerce, Trade and Industry

The Commerce, Trade and Industry sector continues to be a priority growth sector in Zambia. In accelerating development in this sector, Government’s focus will be on developing a competitive private sector-led economy. It is also aimed at attaining a diversified, export-led manufacturing sector and enhancing local, regional and international trade.

In this regard, government in partnership with the private sector will continue to implement the private sector development programme. During this process, measures will be put in place specifically to improve the land delivery system, streamlining immigration procedures, reviewing labour laws and business related legislation. It will also streamline company registration and licensing procedures and promote public private partnership for infrastructure development.

Government will continue to improve the competitiveness of Zambian exports to regional and other international markets, particularly by negotiating for lower tariffs and eliminating non-tariff barriers, export subsidies and domestic market support in developed markets.

Health

The Zambian Government has remained committed to implementing the health reforms aimed at providing quality health services to all Zambians. As a result of these efforts, output indicators for most immunizable diseases have improved. One of the major challenges in the health sector has been the mass exodus of critical health workers, particularly doctors and nurses, to other countries. In response to this challenge, Government has prepared a human resource plan, which has identified the critical issues that need to be addressed over the next five years.

In order to address the problem of medical equipment, the Government with support from cooperating partners will accelerate the programme to equip hospitals and health centres across the country. A drug supply fund has also been established by Government in order to facilitate bulk procurement of drugs and medical supplies, through pooling of resources from Government and cooperating partners.

Education

In the education sector, the Government intends to pay particular attention to the provision of quality education services in the next five years. In order to address the issue of staffing in schools, Government intends to recruit more teachers who will be deployed in deficit areas especially in remote areas. The issue of quality education will be addressed through revision of the current teacher training curriculum and also through increased procurement and equitable of learning materials. Government will also embark on the expansion of infrastructure to increase access to education to all school age children.

Public Service Management

Implementation of the public sector reforms will continue through the public service management component whose goal is to enhance effective delivery of service to the people. The focus will continue to be rightsizing, pay reforms, service delivery improvement and payroll management and establishment control.

In order to make service in the public sector more attractive and retain highly qualified personnel, the Government is continuously reviewing conditions of service with a view of improving them.

Human Rights

The observance of human rights, their protection and promotion is a very important milestone in achieving good governance. As a member of the global village, Zambia will strive to conduct her affairs in accordance with international norms. Government intends to domesticate international human rights treaties to which it is party and consider other appropriate treaties that will enhance the freedoms and rights of its citizens.

Fight against Corruption and Public Accountability

The Zambian Government policy regarding the fight against corruption is undergoing further review. Once finalized, the policy will provide guidelines in reviewing and reforming laws on corruption. President Mwanawasa has reaffirmed his commitment to continue the fight corruption in order to ensure that public resources are protected for the benefit of all Zambians.

The President has emphasized several times that prudent management of public resources will continue to be the hallmark of public accountability. In this regard, the Government has pledged to focus on three levels of accountability, namely,

- Political accountability that applies to people such as politicians who shall be held accountable by the electorate for the success or failure to initiate economic programmes;

- Administrative accountability that refers to administrative structures of the Government (mainly the civil service) that should have clear rules, roles and responsibilities and provide checks and balances for administrative performance; and, lastly,

- Financial and budgetary accountability that entails the ability to account for the allocation, use and control of public funds, public assets and properties.

International Relations

Zambia’s Foreign Policy is premised on the need to promote and maintain the country’s international relations, with the view top safeguard its sovereignty, territorial integrity, socio-economic development and other national interests. In this respect the Government shall continue to focus its attention on foreign relations that, first and foremost, advance the country’s economic welfare in the global economy.

Sources:

(i) Speech for the official opening of the First Session of the Tenth National Assembly by His Excellency Mr. Levy Patrick Mwanawasa, SC, President of the Republic of Zambia, 27th October 2006.

(ii) Zambia Fifth National Development Plan, Ministry of Finance and National Planning, 2007.

(iii) Zambian Government 2007 Budget.