Zambie

This chapter investigates Zambia’s reforms in terms of two policy frameworks that strongly influence the investment climate: trade policy and competition policy. In terms of trade policy, the chapter explores how Zambia has been enhancing trade policy consistency, and aiming to diversify its trading structure away from mining. A major challenge nonetheless remains the competitiveness of domestic companies, especially SMEs, which affects their ability to benefit from increasing trading opportunities achieved through sound trade policy. In terms of competition policy, the chapter analyses how the recent Competition and Consumer Protection Act aims to enhance enforcement powers of the Competition Commission and further protect consumer welfare, and what implementation challenges remain in this respect.

Over the past decade Zambia has taken important steps in building a more efficient framework for setting up businesses, hence addressing some of the structural and operational bottlenecks inherited from the centrally planned economy prior to 1990. This chapter examines various measures adopted by the government to reduce administrative burdens on investors and to increase the role of the Zambia Development Agency in promoting investment. This chapter also illustrates that while reforms such as the Business Licensing Reform Programme are showing impact, Zambia could take better advantage of various investment promotion options available so as to become a more competitive investment destination.

Zambia’s economy has shown relatively strong performance since the 1990s, and the recently launched private sector development reforms are expected to help maintain a positive momentum. The government limits its direct involvement in business to strategic investments deemed critical for the delivery of public goals and services, and seeks to maintain high standards of consumer protection. Moreover it engages the private sector on policy and regulatory reforms. Yet, clearly formulated and well-implemented RBC policies should be considered to help raise the contribution to society of strongly performing sectors of the economy. This chapter highlights this progress, and concludes that the main remaining challenges are those of domesticating international practices and strengthening regulatory capacities.

The government of Zambia has integrated infrastructure investment into broader economic growth objectives under the five-year national development plan. This chapter maps progress in developing and attracting investment in all key infrastructure sectors: telecommunications, electricity, transport, and water and sanitation. It indicates that Zambia has a relatively good network of primary and secondary roads, although it is significantly weaker in rural areas. The deteriorating rail networks are also a crucial issue because as a land-locked mineral-exporting country, Zambia has to rely on regional transport infrastructure. While private investment in telecommunications and the energy sector is relatively recent, it carries strong potential. This chapter also analyses the regulatory and institutional framework for infrastructure development, including how the government evaluates the country’s most pressing infrastructure needs.

This case study aims to illustrate the application of the international drivers of corruption framework, by providing an initial analysis of the main international drivers affecting Zambia. It is structured around the four steps of the framework and the guiding questions. After briefly analysing the political economy context and highlighting a range of significant international drivers, it explores two drivers in more detail: foreign business bribery and the international role in the prosecution of former President Chiluba.

The projected 6.6% growth in Zambia's GDP in 2010 is up from 6.4% in 2009. Agriculture, tourism, construction, manufacturing and mining are driving growth which is expected to expand by 6.5% and 6.7% in 2011 and 2012 respectively.

Après trois décennies de performances économiques plutôt médiocres, la situation macro-économique de la Zambie a changé ces dix dernières années avec une croissance sans précédent du produit intérieur brut (PIB), de 4.8 % en moyenne de 1999 à 2009. La croissance continue d’être tirée par le bâtiment et les travaux publics (BTP), l’exploitation minière et l'agriculture. Mais elle reste sévèrement handicapée par : des goulets d’étranglement de l'offre d'énergie ; les pesanteurs du secteur public, en particulier de l'administration ; les problèmes d’infrastructures ; et le peu de progrès sur la voie des réformes institutionnelles clés. Côté positif, la croissance du PIB est estimée à 6.1 % pour 2009, à peine en légère baisse par rapport aux 6.3 % de 2008, et les prévisions restent assez bonnes pour 2010 (5.5 %) et 2011 (5.7 %).

After 30 years of relatively dismal economic performance, Zambia’s macroeconomic situation has changed in the last 10 years with gross domestic product (GDP) growth at an unprecedented average of 4.8% between 1999 and 2009. Growth continues to be driven by increased output in the construction, mining and agriculture sectors. Nonetheless, the growth process continues to be severely limited by: energy bottlenecks; public-sector constraints, mainly in the civil service; infrastructural problems; and insufficient progress towards key institutional reforms. On a positive note, GDP growth for 2009 was estimated at 6.1%, a relatively small dip from 6.3 in 2008, and the 2010 and 2011 GDP growth forecasts stand at 5.5% and 5.7%, respectively.

Zambia is one of the most urbanised countries in Africa and has achieved a reasonable level of democracy. These factors should benefit women, yet the overall situation in regard to gender equality remains difficult. Tradition imposes many restrictions on women, the effects of which are more pronounced in rural communities than in urban areas.

EN 2008, LA CROISSANCE DE LA Zambie s’est tassée à 5.5 pour cent, contre 6.1 pour cent en 2007, surtout en raison du net recul des cours du cuivre. Un nouveau ralentissement de la croissance à 2.8 pour cent est prévu pour 2009 sous l’effet de la récession mondiale. Le bond de l’inflation en 2008, qui avait atteint 16.6 pour cent en glissement annuel en décembre, s’explique essentiellement par la hausse des prix des denrées alimentaires et du pétrole. Sur 2009 et 2010, l’inflation moyenne devrait retomber sous la barre des 10 pour cent, car le pétrole et l’alimentation devraient se maintenir à leur niveau de fin 2008.

IN 2008, ZAMBIA’S GROWTH DECLINED TO 5.5 per cent from 6.21 per cent in 2007 due mainly to the sharp decline in copper prices. A further reduction in growth to 2.8 per cent is expected for 2009 due to the global recession. The increase in food and oil prices overall were the main causes of the substantial increase in inflation in 2008, which reached 16.6 per cent yearon- year in December. For 2009 and 2010, average inflation is expected to decline to single-digit levels as oil and food prices are expected to remain at their levels of end 2008.

Zambia has a huge agricultural potential, which is still largely untapped, and could play a key role in growth and poverty eradication. Since the early 2000s, the government has implemented important reforms to promote privatisation and trade reforms, leading to higher investment and a strong growth in export crops such as cotton and horticulture. Despite this success, agricultural productivity, especially for food crops, remains low. The study shows that public resources to the agricultural sector have drastically decreased since the early 1990s, while private sector providers have not stepped in to fill the void left by the government disengagement from input supply and marketing. Despite a strong government commitment to reverse this trend, budget figures show that the share in total allocations dropped again in the 2008 budget. The study also argues that evaluations of past donor interventions in agriculture are not very positive, especially in terms of their sustainability. Projects often paid little attention to local absorptive and implementing capacity, had too narrow a focus on production and food security, and lacked an adequate understanding of the socio-economic conditions and behaviour of the target groups. Lack of co-ordination resulted in duplications and insufficient scale. A new generation of donor projects emerged in the early 2000s, with a strong focus on commercialisation and the development of market linkages, especially via contract farming. These projects have borne good results in terms of production volumes, quality standards and access to international commodity chains, as well as farmers’ income. The key challenge for donors is to scale up these success cases and ensure sustainability. The implementation of the Joint Assistance Strategy for Zambia 2007-2010 is an opportunity to achieve a better division of labour, strengthen synergies on the ground and reduce transaction costs for government. Acknowledgements The Zambia