Democracy and Governance in Zambia
The Development Challenge: Zambia's transition to a multiparty democracy and market-based economy continues to progress slowly, but positively. During the 1990s, the Government of the Republic of Zambia (GRZ) implemented a sweeping program of liberalization and deregulation, eliminating most major market distortions in an attempt to arrest and reverse the economic decline. Unfortunately, these efforts have been impeded by the country's legacy of corruption and limited foreign and domestic investment. Until recently, this was accompanied by poor performance of the copper sector. As a result, per capita income plummeted from $752 in 1965 to $351 in 2002.
Since 1999, the economy has been experiencing a modest recovery with positive per capita GDP increases of 1.4% annually. Poverty reduction, however, remains a challenge due to a heavy debt burden, weak institutional capacity, and ineffective public spending. According to the GRZ's 2004 budget, the current government's top three priorities are the fight against corruption; promotion of economic growth, focusing in the areas of agriculture, tourism and small scale mining; and combating HIV/AIDS. Over the past decade, Zambia's performance has declined on the majority of the United Nations Development Program's Millennium Challenge Goals. In 2000, an estimated 73% of the population lived below the official poverty line, compared to 70% in the early 1990s. The impact of the HIV/AIDS pandemic further undermines steps to reduce poverty. Zambia ranked 163 out of 175 countries in the 2003 UNDP Human Development Index which is the same as its 2002 rating. The agricultural sector continues to be central to the Zambian economy, with more than 67% of the workforce in agriculture, forestry and fisheries. Constraints in agriculture include high transportation costs; weak market infrastructure; uneven production and inconsistent quality; lack of access to market information, inputs, and credit; and cyclical drought.
A heavy external debt burden slows Zambia's development even further, with $6.45 billion in external debt as of December 2003. The debt is owed primarily to multilateral institutions and bilateral creditors. Zambia was approved for debt relief under the World Bank's enhanced Heavily Indebted Poor Country Initiative (HIPC) in 2000. Under this initiative, the government expects to successfully implement and monitor the International Monetary Fund's Poverty Reduction Growth Facility (PRGF), helping it to reach the HIPC completion point in early 2005. Should the government attain the completion point, an estimated $3.8 billion of foreign debt, more than half the country's foreign debt, would be cancelled, allowing resources to be channeled to productive sectors.
The GRZ continues to implement the Poverty Reduction Strategy Plan (PRSP 2002-2004) and Transitional National Development Plan (TNDP 2003-2005), two comprehensive economic and social plans written with the participation of donors and other stakeholders. Implementation of the PRSP/TNDP programs has been slow due to GRZ budgetary constraints. With the PRSP coming to an end in 2004 and the TNDP in 2005, the GRZ plans to develop a National Development Plan (NDP) which will cover the period 2006-2010, linked to the GRZ Medium Term Expenditure Framework (MTEF).
In 2004, following the Parliament's approval of the Decentralization Policy, the GRZ took steps to decentralize its functions. One goal is to improve communications between government institutions and Zambian citizens. Zambia has many active non governmental organizations (NGOs) and civil society groups, several independent newspapers and radio stations, two state-owned newspapers and the government-owned Zambia National Broadcasting Corporation.
Zambia plays an important role in advancing U.S. national interests by contributing to greater stability and prosperity in the southern Africa region. As a country with significant natural resources, a market-based economy, and a multi-party democracy, Zambia can play a constructive role in regional conflict resolution efforts and promote peace and stability in a region of growing importance to the United States.
The USAID Program: The USAID Country Strategic Plan for Zambia for 2004-2010 outlines an innovative approach to help Zambia address its challenges and accelerate growth. The strategy, "Prosperity, Hope and Better Health for Zambians," was developed with participation from the Zambian government and a wide range of private sector and civil society stakeholders. USAID's objectives directly contribute to several sectors and cross-cutting areas of the government's PRSP/TNDP. These objectives concentrate on increasing private sector competitiveness in agriculture and natural resources, improving the quality of basic education for more school-aged children, improving the health of Zambians, and holding the GRZ more accountable. USAID plans to ensure gender-sensitive, people-level improvements, and information and communications technology, are incorporated throughout the portfolio.
(Excerpted from the 2006 Congressional Budget Justification for Zambia)
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