Zambia must combine short-term economic recovery with a long-term agri-business focused jobs plan

As debate continues about the need for an IMF-supported Economic Recovery Programme, ZIPAR states that as well as ensuring short-term economic stability, Zambia must plan to create more and better jobs in the long-term. Central to any jobs plan should be agriculture and promoting access to new export markets for agri-businesses – this has the potential to provide a new engine for future jobs and economic growth in Zambia.

In a new report published today ZIPAR Senior Research Fellow, Mr. Caesar Cheelo points out that the economic slowdown experienced since 2015, characterized by load shedding, currency depreciation and high government deficits, has adversely affected the Zambian labour market. A nationally representative 2016 survey, carried out by ZIPAR, estimated that net job losses during the crisis period were around 6.5% of the workforce. There are some indications of recovery recently, but the challenge remains.

Mr. Cheelo stresses that in the short-term there is a need to contain public sector expenditure in order to reduce the overall fiscal deficit. To help achieve this, while also protecting the poorest Zambians, an IMF-supported Economic Recovery Programme is necessary. Without IMF support, there will be less government funding to protect the poorest and to support growth.

However, a long-term plan for job-rich growth is also required. With a likely tightening of government investment, public sector spending and therefore employment in service-sector jobs is unlikely to grow as it did in the peak of the mineral boom, from 2008-2012. Indeed, it is likely to decline. The Zambian economy will therefore need to open up new ‘growth channels’.

ZIPAR argues that agri-business is key. Given most Zambians still live in rural areas earning a livelihood in agriculture, finding new markets through linking farmers to agro-value-chains and increasing agro-industrial exports – especially targeting regional markets – is essential to raising rural incomes. Raising rural incomes will require improved agricultural productivity and increased employment in agro-industries, particularly agro-processing.

In the 2017 budget the government clearly recognized the importance of agriculture. This is to be welcomed. The forthcoming 7th National Development Plan is another opportunity to focus on agriculture. Some specific policy priorities that ZIPAR is drawing attention towards include:

  • Formulating and implementing business and structural reforms which reduce the costs of production and trade, particularly in relation to agricultural production and agro-processing.
  • Creating an environment attractive to foreign investment, particularly in the cash-crop, livestock, aquiculture and forestry subsectors.
  • Continued investment in the provision of reliable services (transport and storage, energy, finance and insurance, and information and communication technologies) for agriculture.

Notes to Editors

  1. This is based on the ZIPAR policy paper "What Zambia Needs for More and Better Jobs: Balancing between Macroeconomic Stability and Economic Restructuring" by Caesar Cheelo, with contributions from Dino Moretti.
  2. This paper is part of the ZIPAR Flagship Project, "More and Better Jobs".
  3. ZIPAR is a socio-economic think-tank whose mandate is to conduct research and policy analysis in order to provide objective, credible and timely policy advice to support the policy process in Zambia. ZIPAR was established by the Government Republic of Zambia (GRZ) with the support of the African Capacity Building Foundation (ACBF).

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