During my research, I realized how rich a country Zambia is. Yet, few writers talk about this 753000 km, 13 million people strong landlocked country. Zambia is strategically placed, sharing borders with 8 countries-the DRC, Tanzania, Malawi, Mozambique, Zimbabwe, Botswana, Namibia and Angola.
The following sections: Political, Economic and Social, gives more details on its environment
Zambia is docile when it comes to political stability. There have been no upheavals wanting to change the government or governments by a coup d’état and, aside from the occasional high-profile assassination. Any violent conflicts usually end in courtroom rather than arms. Zambia enjoys absolute democracy since 1991 and had a major change in political arena when the two major parties- the Patriotic Front (PF) and and the United Party for National Development (UPND) decided to merge to fight the presidential elections as Movement for Multiparty Democracy (MMD) which has been in power since 1991.
Despite of the politically stable environment the leadership is not at its best as it is affected by corruption and political interference. Zambia was ranked 75th out of 91 in the Transparency International Corruption Perception index according to the African Economic Outlook. In order to combat this problem, the Zambian government has put in strict laws against corruption. Cases including financial improprieties in the health and roads sectors were addressed bring improvement to the sectors. Zambia moved up 6 spots in the Index in 2003 resulting in the positive impact created by the government.
In the above table populated by World Development Indicators in 2011 there had been a tremendous potential of growth. From 2000-2009 the growth rate was about 5% that led to a major hike in the GDP Per capita, which was recorded, to be 1703 USD from 330 USD in 2001, showing the enormous progress made by Zambia in less than a decade. This rapid growth in the Zambian economy primarily attributed to the Governments bold move of privatization and liberalization.
This has freed up a lot of its resources by allowing the private sector to step up, leading to a rapid increase in the FDI’s from 2% in 2001 to 10% in 2010. It promoted a lot of trade with its global counterparts as seen by the trade openness ratio of 73.2 which initiated the move from a Least Developed Country to a Middle Income Country.
This improvement and resilience of the Zambian economy is partially attributed to decisive government policy reforms of the late 1990s of privatization and liberalization. By government allowing private sector to participate in the economy, it freed up some of some resources while at the same time encourage foreign direct investment (FDI) to flow into the country.
The benefit was also experienced in nontraditional sectors such as services and manufacturing. Agriculture also benefited from these policies as more investment flowed into the sector.
In 2011 FDI increased to 10% of the GDP compared to a mere 2% in 2001. A further breakdown of Zambia’ GDP can be seen from the above chart populated by the Central Statistics office. The chart shows a breakdown in 3 sectors the Primary, Secondary and Tertiary or the Services sectors respectively from 2006 to 2010. The services sectors being the largest of all the three constitute 48% of the total GDP followed by the secondary growing steadily from just over a quarter to almost one-third. The biggest problem that can clearly be seen from the above chart is that the Primary sectors that include the manufacturing is still below 10% and contributes very minimally towards the GDP as a while. While steps to create global alliances with countries like china and brazil are being taken to import goods to reap the damages of a week primary sector especially in construction which has led manufacturing to grow to about 5% in the next 5 years.
Zambian Government is making a cautious effort to minimize its dependence on other countries for imports and trying to facilitate and create a base for the locally produced goods and services.
The UNDP reported a steep drop in poverty in 2006 but the fact is that extreme poverty still effects parts of the rural areas as in certain pockets it is as high as 67%. Concentrated poverty pockets show concerns of increasing crime rates and illegal activities unlike those in more scattered pockets. Even though the economic growth is rapid but it does not result in generating employment especially in case of Zambia.
A poor manufacturing base is a reason for this as well. Manufacturing invites both skilled as well as unskilled labor unlike the secondary or tertiary sectors that require minimum. This is why employment is low.
The Government should incorporate polices that address food pricing, marketing more of their agricultural produce so that more channels of income can be generated. Farmer incentive and investment opportunities that will help Zambia utilize its human capital to their full and help foster all round development.
Distribution of wealth is very difficult to attain in most developing countries- the rich getting richer and the poor keep getting poorer. This gap if not bridged can lead to problems in exploitation and human rights issues.
Zambia is currently facing an AIDS epidemic where 17% of the affected are adults aged 17-25. Lack of healthcare facilities and awareness are primary challenges. Most AIDS patients are in towns and cities where population density is high. Thereno state of the art healthcare facilities for treating infected people. Despite of aid by the UN and USA in this sector, healthcare is not affordable and accessible to all.
There s no doubt that Zambia as an economy has come a long way but still there is more room for improvement. The social conditions are just not fit for long-term development. Zambia has to aim for a holistic development strategy and not just certain areas. Economic growth will lead to only inequalities in distribution of wealth, which is not the answer to the problem but a major case for future problems. Government has to work on implementing policies that aim at the improvement of social conditions. Zambia has to harness the human capital it has else it will loose its competitive advantage and global recognition.