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Zambia : Economic revival in 2024

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Zambia : Economic revival in 2024

According to the Policy Monitoring and Research Centre (PMRC), Zambia shows promising economic prospects in 2024 with a 4 % increase in Gross Domestic Product (GDP).

Overview of the Zambian economy : Capital and GDP

Zambia boasts a medium-sized economy, with a GDP of 29.16 billion USD in 2022. However, wealth disparities persist, with approximately 45 % of wealth concentrated in the hands of the top 10 % of wealthiest individuals. According to a study, the capital city, Lusaka, contributes around 24.2 % to the nation’s annual GDP, with an average growth rate of 3.1 %. The informal sector is predominant in generating this wealth, accounting for an average of 40 % of the city’s GDP since 2016. Concerning GDP per capita, each urban dweller generates nearly 2,200 USD, significantly surpassing the national average of 1,400 USD.

Governmental efforts : Catalysts for growth

Zambia’s economic prospects for 2024 stem from ongoing political reforms and budgetary cleanup measures, thereby bolstering market confidence. The conclusion of an agreement with the Official Creditors Committee (OCC) on a debt treatment aligned with the International Monetary Fund (IMF) program is expected to enhance the business environment and key macroeconomic indicators. Continued collaboration with bilateral and multilateral partners contributes to attracting foreign investments and supports the country’s economic program.

Advancements in human development improvement achieved in 2023 are widely acclaimed. This success primarily arises from the influx of investments in education, notably through introducing a free education policy. Furthermore, increasing efforts are being made to strengthen the nation’s resilience against the challenges of climate change. For instance, in October 2023, UNITAR, UNESCO, FAO, Copperbelt University, and the University of Zambia jointly launched the FACE-NDC project.

This program represents the country’s most significant investment in climate education ever undertaken. The approach promises to revolutionize climate change education and enhance the capacity of the Zambian population by 2030. The project receives a contribution of 17 million EUR, equivalent to 18.5 million USD, from Germany’s International Climate Initiative (IKI).

Economic potential of natural resources

Zambia possesses diverse biodiversity and abundant mineral resources, offering substantial economic potential. Natural resources account for 40 % of its wealth, providing a solid foundation for its economic revival and poverty reduction strategies.

Zambia’s mineral riches

The mining sector holds a pivotal position in the Zambian economy. The country exploits minerals such as cobalt, uranium, manganese and gemstones like emeralds. Its mining deposits are primarily concentrated in the Copperbelt region, spanning between this province and those of Haut-Katanga and Lualaba in the Democratic Republic of Congo (DRC).

Moreover, the PMRC’s optimism regarding Zambia’s economic recovery stems from favorable commodity prices and export trends. Sydney Mwamba, the Executive Director of this center, emphasizes the positive impact of rising copper prices on the national economy. The country heavily relies on the copper industry, which accounts for 18 % of GDP and over 75 % of export earnings in recent years. Zambia ranks as the second-largest producer of copper in Africa and ranks in the top 10 globally.

Zambian tourism : Potential and challenges

The diverse landscape attracts nature enthusiasts and adventurers, from Victoria Falls to vast national parks. However, several challenges hinder the optimal exploitation of this potential:

  • Accessibility : Despite its natural beauty, the lack of quality transport and accommodation infrastructure in some remote regions limits tourist access.
  • Cost : Tourism in Zambia is relatively expensive compared to similar destinations, which may deter some potential visitors.
  • Awareness of the importance of sustainable tourism : The development of this industry must be carried out sustainably to avoid damaging fragile ecosystems.

Nevertheless, Zambia’s tourism resources still need to be explored. With the right strategies and investments, this sector can become a significant driver of the economy. For example, the World Bank provides financial support to stimulate the green, resilient, and transformative economy in June 2023. This 100 million USD funding is dedicated to regulatory reform and capacity building of the country’s key tourism agencies.

The project aligns with Vision 2030 and the priorities of the Zambian government’s 8th National Development Plan (8NDP). The approach aims to encourage the development of emerging tourist destinations, namely Liuwa Plains National Park, the Source of the Zambezi, and Kasaba Bay. « Diversifying resource-based economic activity, coupled with private sector investments, will create employment opportunities while preserving the environment in areas specifically targeted by the project », says Sahr Kpundeh, World Bank Country Director for Zambia. According to the financial institution, Lusaka is expected to pave the way for new green economic paths that leverage the region’s natural assets and comparative advantages.

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