Zambia - Country Economic Memorandum : Policies for Growth and Diversification, Volume 1. Main Report
In October 1991 Zambia moved to a multiparty democratic system. In the following years, the government implemented a number of policy and structural reforms, liberalizing exchange and interest rates, simplifying the tariff structure, and removing q...
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| Format: | Country Economic Memorandum |
| Language: | English en_US |
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| Online Access: | http://documents.worldbank.org/curated/en/2004/10/5442375/zambia-country-economic-memorandum-policies-growth-diversification-vol-1-2-main-report http://hdl.handle.net/10986/15666 |
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okr-10986-156662021-04-23T14:03:18Z Zambia - Country Economic Memorandum : Policies for Growth and Diversification, Volume 1. Main Report World Bank STRUCTURAL REFORMS POLICY REFORM LIBERALIZATION EXCHANGE RATE ADJUSTMENT TRADE LIBERALIZATION PRIVATIZATION STATE-OWNED ENTERPRISES AGRICULTURAL DEVELOPMENT SOCIOECONOMIC CONDITIONS POVERTY INCIDENCE GROSS DOMESTIC PRODUCT COPPER PRICES PER CAPITA INCOME PURCHASING POWER MACROECONOMIC POLICY In October 1991 Zambia moved to a multiparty democratic system. In the following years, the government implemented a number of policy and structural reforms, liberalizing exchange and interest rates, simplifying the tariff structure, and removing quantitative restrictions on trade, privatizing most state-owned enterprises, and substantially withdrawing from the agriculture sector. Despite these reforms, economic growth has remained lackluster, and poverty and social conditions have worsened. There are however, hopeful signs that increased growth and poverty reduction are within reach in Zambia. The country's economy has long been tied to the copper industry, whose purchasing power has been in decline for decades. But declining copper prices were not the only reasons Zambia's economic performance declined between 1991 and 2002. Excluding the one-time disruption in real sector activity in 1994-95, real GDP grew at an average annual rate of 3 percent during 1991-2002. The report argues that estimates puts its annual long-term growth potential at about 5 percent, implying per capita income growth of 2.5-3.0 percent a year, and, the reason why its potential is not being achieved, lies in several key problems, namely macroeconomic mismanagement, lack of ownership of reform and poor policy implementation, a weak investment climate, lack of good governance, and, the HIV/AIDS pandemic. And further asserts that central to the lack of macroeconomic stability - in particular to the high inflation and real interest rate - is the lack of fiscal control and commitment to fiscal discipline. Zambia's large external and rising domestic debt, combined with budgetary dependence on external financing, has constrained the government's ability to exert monetary control to achieve macroeconomic stability. The financial sector must become more efficient and capable of supporting private investment and growth. Key institutional and policy issues for immediate attention are creating a mechanism to resolve the debt of failed banks and state-owned non-bank financial institutions; upgrading the human and technological resources of financial system regulators and supervisors; improving access to financial services, in particular rural financial services; and, investing in financial system infrastructure to improve market data, and accounting and auditing standards. The report expands on the country's opportunities in the mining sector, particularly copper, but also on its rich reserves of gemstone minerals, as an opportunity for export diversification; in the manufacturing sector, specifically textiles, garments, and processed foods; and, in tourism development. 2013-09-05T16:21:34Z 2013-09-05T16:21:34Z 2004-10-20 http://documents.worldbank.org/curated/en/2004/10/5442375/zambia-country-economic-memorandum-policies-growth-diversification-vol-1-2-main-report http://hdl.handle.net/10986/15666 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Washington, DC Economic & Sector Work :: Country Economic Memorandum Economic & Sector Work Africa Zambia |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
STRUCTURAL REFORMS POLICY REFORM LIBERALIZATION EXCHANGE RATE ADJUSTMENT TRADE LIBERALIZATION PRIVATIZATION STATE-OWNED ENTERPRISES AGRICULTURAL DEVELOPMENT SOCIOECONOMIC CONDITIONS POVERTY INCIDENCE GROSS DOMESTIC PRODUCT COPPER PRICES PER CAPITA INCOME PURCHASING POWER MACROECONOMIC POLICY |
| spellingShingle |
STRUCTURAL REFORMS POLICY REFORM LIBERALIZATION EXCHANGE RATE ADJUSTMENT TRADE LIBERALIZATION PRIVATIZATION STATE-OWNED ENTERPRISES AGRICULTURAL DEVELOPMENT SOCIOECONOMIC CONDITIONS POVERTY INCIDENCE GROSS DOMESTIC PRODUCT COPPER PRICES PER CAPITA INCOME PURCHASING POWER MACROECONOMIC POLICY World Bank Zambia - Country Economic Memorandum : Policies for Growth and Diversification, Volume 1. Main Report |
| geographic_facet |
Africa Zambia |
| description |
In October 1991 Zambia moved to a
multiparty democratic system. In the following years, the
government implemented a number of policy and structural
reforms, liberalizing exchange and interest rates,
simplifying the tariff structure, and removing quantitative
restrictions on trade, privatizing most state-owned
enterprises, and substantially withdrawing from the
agriculture sector. Despite these reforms, economic growth
has remained lackluster, and poverty and social conditions
have worsened. There are however, hopeful signs that
increased growth and poverty reduction are within reach in
Zambia. The country's economy has long been tied to the
copper industry, whose purchasing power has been in decline
for decades. But declining copper prices were not the only
reasons Zambia's economic performance declined between
1991 and 2002. Excluding the one-time disruption in real
sector activity in 1994-95, real GDP grew at an average
annual rate of 3 percent during 1991-2002. The report argues
that estimates puts its annual long-term growth potential at
about 5 percent, implying per capita income growth of
2.5-3.0 percent a year, and, the reason why its potential is
not being achieved, lies in several key problems, namely
macroeconomic mismanagement, lack of ownership of reform and
poor policy implementation, a weak investment climate, lack
of good governance, and, the HIV/AIDS pandemic. And further
asserts that central to the lack of macroeconomic stability
- in particular to the high inflation and real interest rate
- is the lack of fiscal control and commitment to fiscal
discipline. Zambia's large external and rising domestic
debt, combined with budgetary dependence on external
financing, has constrained the government's ability to
exert monetary control to achieve macroeconomic stability.
The financial sector must become more efficient and capable
of supporting private investment and growth. Key
institutional and policy issues for immediate attention are
creating a mechanism to resolve the debt of failed banks and
state-owned non-bank financial institutions; upgrading the
human and technological resources of financial system
regulators and supervisors; improving access to financial
services, in particular rural financial services; and,
investing in financial system infrastructure to improve
market data, and accounting and auditing standards. The
report expands on the country's opportunities in the
mining sector, particularly copper, but also on its rich
reserves of gemstone minerals, as an opportunity for export
diversification; in the manufacturing sector, specifically
textiles, garments, and processed foods; and, in tourism development. |
| format |
Economic & Sector Work :: Country Economic Memorandum |
| author |
World Bank |
| author_facet |
World Bank |
| author_sort |
World Bank |
| title |
Zambia - Country Economic Memorandum : Policies for Growth and Diversification, Volume 1. Main Report |
| title_short |
Zambia - Country Economic Memorandum : Policies for Growth and Diversification, Volume 1. Main Report |
| title_full |
Zambia - Country Economic Memorandum : Policies for Growth and Diversification, Volume 1. Main Report |
| title_fullStr |
Zambia - Country Economic Memorandum : Policies for Growth and Diversification, Volume 1. Main Report |
| title_full_unstemmed |
Zambia - Country Economic Memorandum : Policies for Growth and Diversification, Volume 1. Main Report |
| title_sort |
zambia - country economic memorandum : policies for growth and diversification, volume 1. main report |
| publisher |
Washington, DC |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2004/10/5442375/zambia-country-economic-memorandum-policies-growth-diversification-vol-1-2-main-report http://hdl.handle.net/10986/15666 |
| _version_ |
1764428775910539264 |