In recent days, there has been some confusion about inflation in Zambia. On 27th October 2016, the Central Statistical Office (CSO) announced a 6.4 percentage-point drop in the annual rate of inflation from 18.9% in September to 12.5% in October.
Some commentators have interpreted the drop in the annual rate of inflation as a fall in actual prices. Ordinary Zambians have been confused because when they go to the shops they don’t see falling prices. Far from it, they see prices still going up.
By Felix Mwenge
The 2015 Living Conditions Monitoring Survey report has revealed that the gap between the rich and the poor in Zambia is widening. Zambia’s Gini coefficient now stands at 0.69 up from 0.60 in 2010; much higher than the African average of approximately 0.43.
The impact of the recent Zambian economic slowdown on both businesses and the public is revealed for the first time in research commissioned by the Zambia Institute for Policy Analysis and Research (ZIPAR) as part of its flagship More and Better Jobs project.
A new report highlights the importance of "Multidimensional poverty as a basis for formulating poverty reduction policies".
Lack of access to clean Energy and secondary school education attainment remained part of the biggest contributors to acute poverty in Zambia in 2014.
Zambia’s city populations are expanding at an average rate of nearly 4 percent per year and it is projected that Zambia must create 1.2 million new urban jobs by 2025 and 2.8 million by 2035.
A report published today by ZIPAR, the International Growth Centre and Just Jobs Network states that the number of Zambian workers employed in agriculture fell steeply from 71.4 percent to 48.9 percent. Zambia is witnessing a shift as the workforce moves out of agriculture into services and industry between 2008 and 2014
The report which forms part of ZIPAR’s on-going Flagship Project on “More and Better Jobs” shows that despite the country’s high levels of economic growth, its labor markets are not creating enough jobs that can propel inclusive growth. This is having a big effect on cities:
While the situation is likely to worsen with the current economic slowdown, there are some positive trends which could offset the declining rate of urban employment. For example, the construction sector employed 128 percent more workers in 2014 than in 2008. The hospitality sector also expanded formal employment by 63 percent in the same period. But these bright spots cannot outshine the warning signs of a severe lack of productive jobs in urban areas, outside the small, and shrinking, formal sector, which employs just over a quarter of urban Zambians.
The researchers propose policy changes which could inform the development of the seventh national development plan, which is currently being worked on by government. These are as follows:
At present businesses operating in informal settlements with over 70 percent of Zambia’s urban residents face difficulties which include poor connectivity to markets, limited space, poor infrastructure and technology. Government should address these challenges by recognizing and upgrading informal settlements.
The cluster approach to industrialization, which the Zambian government is currently pursuing in rural areas, is well suited to an urban economy. While the cluster approach can also succeed in rural areas there is significant scope to promote manufacturing activities in urban areas in order to create more jobs.
Connectivity-both within the city and between centres of production is one of the keys to leveraging mass effects of urban economies to create more and better jobs. Effective public transportation networks can help MSMEs to move their goods to markets. Moreover, new investments in national road and rail infrastructure can be harnessed to support the growth of labor-intensive sectors and MSMEs.
The Copperbelt is one of the most important urban regions of Zambia, but today its economic fortunes are endangered, largely because of its overdependence on copper mining. Policy makers can reverse the province’s down turn by building on its existing assets and engaging the right mix of interventions to create a vibrant urban labor market through diversifying its economic output.
Mr. Dennis Chiwele, IGC Country Manager said:
In the recent past Urbanisation was viewed as detrimental to economic development in Zambia. But our report alludes to the fact that urban economies can be the very engine of growth. Government has to rethink how we can make urban centres vibrant by providing necessary infrastructure and services.
Gibson Masumbu, Research Fellow at ZIPAR said:
With the process of structural transformation accelerating, Zambia’s cities are assuming greater importance in ensuring its people have access to productive employment. Our report comes at a better time when the country is engaged in developing the Seventh National Development Plan. Policy makers should rethink how to model the growth trajectory of our cities. They should put in place interventions that will ensure city growth is accompanied by the creation of productive jobs with appropriate wages, and basic social protections.
1. This is based on a report titled “Promoting Job-Rich Urbanisation in Zambia”. The report can be found at http://goo.gl/GVcS4u
2. The report is part of ZIPAR’s Flagship Project on More and Better Jobs. For further information on this project see: http://tinyurl.com/ju8m4u4
3. The research was conducted by the Just Job Network in collaboration with ZIPAR and the International Growth Centre (IGC).
4. ZIPAR is a socio-economic think-tank whose mandate is to conduct research and policy analysis. ZIPAR was established by the Government Republic of Zambia (GRZ) with the support of the African Capacity Building Foundation (ACBF)