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USAID Information:
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Zambia
Please note: All linked documents are in PDF format
| Objective |
SO Number |
FY 2004 |
FY 2005 |
FY 2006 |
| Increased Competitiveness |
611-005 |
7,094 |
7,154 |
7,756 |
| Basic Education |
611-006 | 6,472 |
5,888 |
3,959 |
| Improved Health Status |
611-007 | 23,151 |
12,700 |
11,100 |
| Democracy and Governance |
611-008 | 1,870 |
1,520 |
2,112 |
| Multi-sectoral Response to HIV/AIDS |
611-009 | 10,900 |
1,035 |
0 |
| Total (in thousands of dollars) |
49,487 |
28,297 |
24,927 |
Excludes P.L. 480. See Program Annex.
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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.
USAID has continued to raise awareness and understanding of the concept and practice of public-private partnerships. USAID supported alliances in six key economic sectors: dairy, commodity warehousing, small and medium enterprise development, smallholder fresh vegetable exports, information communication and technology and economic diversification in the Copperbelt region. A seventh regional alliance on cooperative business development operates in both Zambia and Mozambique.
Other Program Elements: USAID's activities are complemented by several Presidential Initiatives and other centrally funded programs. The Africa Bureau manages the Trade for African Development and Enterprise Initiative and the Initiative to End Hunger in Africa (IEHA). USAID is using IEHA funds to support a Development Credit Authority (DCA) guarantee program aimed at promoting commercial bank lending against certified warehouse commodity receipts. In this program, the Zambia Agricultural Commodity Agency certifies warehouses to issue receipts to farmers, traders, millers and other commercial depositors of grain against which receipts credit may be obtained from participating banks. USAID's education activities are complemented by funding from the Africa Education Initiative, and funds from the Anti-Corruption Initiative also are being used for activities in Zambia. USAID's trade competitiveness "hub" for Southern Africa and the regional program for East Africa both address issues related to regional trade facilitation. USAID works closely with the Common Markets for Eastern and Southern Africa (COMESA) to harmonize regional trade policies. USAID's Regional Urban Development Office is exploring the possibility of obtaining Development Credit Authority loan guarantees for Zambia in partnership with Houses for Africa and Stanbic Bank.
The U.S. Department of Agriculture provides technical assistance for pest risk assessments for the entry of horticultural products into the U.S. market. USAID's Economic Growth, Agriculture, and Trade Bureau provides technical assistance in Zambia for regulation and rural electrification through energy sector partnerships. USAID's Bureau for Democracy, Conflict, and Humanitarian Assistance (DCHA) provides emergency food aid through the Consortium for the Southern African Food Emergency program. DCHA also has provided grants to several U.S. private voluntary organizations in Zambia. In addition, DCHA is helping to assess the threat to crops from locusts that are beginning to swarm in Namibia and western Zambia, to determine if mitigation is warranted to minimize the impact on the next harvest.
Zambia is a focus country under the President's Emergency Plan for AIDS Relief. Additional funding from the Global HIV/AIDS Initiative account is anticipated for both FY 2005 and FY 2006. Zambia has been a recipient of funds from the Initiative to Prevent Mother-to-Child Transmission of HIV/AIDS, which is being incorporated into President's Emergency Plan in FY 2005.
Other Donors: Overall donor assistance to Zambia totals about $350 million a year. The United States and the United Kingdom are Zambia's first and second largest bilateral donors, respectively. Other major bilateral donors include Germany (small and medium business development), Norway (rural agribusiness development and the environment), and Japan (health and infrastructure). Multilateral donors include the United Nations agencies, the European Union, the World Bank, the International Monetary Fund, and the African Development Bank. USAID collaborates closely with other donors in implementing health, education, agriculture, and democracy and governance programs. There are several jointly-supported economic growth initiatives in Zambia: the Agricultural Consultative Forum, the Zambia Business Forum, Private Sector Donors Group, and the Agriculture Donors Group. All donors support the national Health Strategic Plan and sit on the donors' Health Sector Committee.
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