Under the stewardship of President Edgar Chagwa Lungu and his Seventh National Development Plan, Zambia continues on its path of economic stability while harnessing its vast natural resources and human capital to foster a new wave of socio-economic prosperity through industrialisation and diversification.Long known as an economy built on copper and cobalt, Zambia is regarded throughout the sub-Saharan region as a beacon of stability, both in peace and macro-economics. The landlocked nation of 17 million people has strengthened its international diplomacy over the past few years to increase its bilateral trade. The 2018 edition of the World Economic Forum’s Global Peace Index saw Zambia ranked at 48, nine spots higher than the United Kingdom.
Despite the achievement, Zambia has faced some crises in the past few years, with poorly performing public sector bodies, slumping copper prices and low rainfall causing power shortages. These crises were seen as opportunities to President Edgar Chagwa Lungu, who has brought reform and vision to the country through his Seventh National Development Plan (7NDP). A five-year plan (2017-2021), with a pledge to build a resilient and diversified economy, it indicates the government’s commitment to planning, as the gateway to the Vision 2030 target, to become a middle-income nation.
With an emphasis on industrialisation and diversification, the current administration is harnessing the nation’s land and water resources, while investing heavily in ICT and infrastructure to continue its stable growth and ensure that no one is left behind. The Minister of Information, Hon. Dora Siliya points out, “I think the diversification opens up whole new opportunities in tourism, agriculture, ICT and the energy sector. We know how to invest in ICT technology and we know how to invest in power, so there are a lot of business opportunities in this country.”
With the insertion of Multi-Facility Economic Zones (MFEZs) to complement critical elements available in the manufacturing sector, President Lungu also introduced significant investment incentives which compare well to other countries in the Southern African Development Community (SADC) and Common Market for Eastern and Southern Africa (COMESA).
“A smart and prosperous Zambia cannot be attained without a strong and growing economy. In this regard, government will continue to put emphasis on macro-economic stability,” exclaims President Lungu. This emphasis has already bore several fruits. Zambia’s economy grew by 5% in the third quarter of 2018, compared to 4.5% recorded in the same period in 2017. To add to this, the Zambia Revenue Authority (ZRA) collected a total of US$4.8 billion exceeding its US$3.7 billion for the 2018 financial year by K3.8 billion, which ZRA Commissioner General Kingsley Chanda points out was due to the “increase in the number of platforms we launched through which our taxpayer can pay.”
Private sector-led investments also finished strongly in 2018, as the Zambia Development Agency (ZDA) – the nation’s promoter of trade and investment – recorded US$3.9 billion of projected investments in 2018, in various sectors of the economy. As a result of diversification efforts, the top three performing sectors in 2018 were the energy sector, the manufacturing sector and the mining sector. Of the total recorded projected investment, US$21.7 million was invested in the various Multi Facility Economic Zones (MFEZ) and industrial parks around the country.
President Lungu’s ‘green revolution’ is focused on mechanisation, resulting in the offer of significant incentives to foreign partners who can provide productivity-boosting machinery. “Agriculture is now identified as the backbone to drive our economy – it contributes now about 70% to our GDP and 10% to our economic growth. This creates a lot of employment for our women and the youth, especially those living in the rural areas,” states Hon. Micheal Katambo, Minister of Agriculture. “For production to be enhanced, the government is targeting all farmers and trying to get them to access financial institutions, so that they can access loans and buy small-mechanised equipment.” In addition to improving the sector’s resilience to climate change and reducing poverty, Lungu’s government has also set aside one million hectares of farmland for investment, open to both Zambian and foreign investors.
In 2018, Zambia mined over 800,000 tonnes of copper. As energy infrastructure is improved, that figure could soon reach one million tonnes per year. In an effort to ensure that Zambians benefit from their nation’s mineral wealth, the Minister of Finance, Hon. Margaret Mwanakatwe, declared “an increase in mineral royalty rates by 1.5 percentage points at all levels of the sliding scale and a mineral royalty tax non-deductible for income tax purposes,” among others to continue promoting value addition in the sector, in a bid to create linkages with other sectors of the economy.
Tourism is one of the key thematic areas in the 7th National Development Plan. Land of the legendary African walking safari, home of the Victoria Falls and the wild Zambezi River among others. “Zambia has the potential to become one of the five top destinations in the world,” states Hon. Charles Banda, Minister of Tourism and Arts. With more than US$1 billion spent on infrastructural upgrades, “we now see that we are conveniently positioned to be the aviation and tourism hub we want to be,” states Fumu Mondoloka, Managing Director of Zambia Airports Corporation Limited. “This promises to increase our passenger numbers and improve air traffic across the country, while improving the economy.” As one of the world’s fastest growing populations, Lungu’s industrialisation agenda remains essential to continue Zambia’s path of macro-economic and peaceful stability while promising a better, bigger and brighter future for its people.