Lusaka — While Zambia's economy is still recovering from the COVID-19 pandemic and a previous recession, a new Country Economic Monitor (CEM) report shows pathways that can support the country's productivity to enhance economic transformation, create better jobs, and deliver sustained and inclusive growth.
The new CEM, launched today, titled Unlocking Productivity and Economic Transformation for Better Jobs, shows that structural issues persist in the Zambian economy despite remarkable economic growth in the 2000s decade, as growth has not been inclusive enough to significantly reduce poverty and create enough good jobs. The Zambia CEM provides a deeper analysis of the country's economic landscape. It dissects Zambia's growth performance and the limitations of its growth model. During the 2010s decade, the economy was not resilient enough, and thus COVID-19 hit an economy that was already struggling, triggering a recession and leading to the external debt default in 2020.
"Low job creation trends and a limited poverty response to economic growth could affect Zambia's sustained and inclusive growth prospects. However, the recent debt resolution and reforms are expected to boost private sector investment and support macroeconomic stability," says Nathan Belete, World Bank Country Director for Malawi, Tanzania, Zambia, and Zimbabwe.
According to the report, raising the productivity of agriculture is the first proposed pathway, and is at the heart of Zambia's development challenge.
"Zambia's agricultural productivity is below its potential and is declining," said Albert Pijuan Sala, World Bank Senior Economist for Zambia and co-author of the report. "Raising productivity has enormous potential to drive poverty reduction and inclusive growth. However, challenges in the sector, such as expensive and distortive support programs, coupled with an increasing frequency of climate hazards, constrain productivity growth and dampen opportunities to diversify beyond maize."
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The second pathway involves Zambia making critical economy-wide reforms to unlock broad-based private sector investment and productivity growth, increasing its role in driving jobs and economic transformation. "As the country continues to urbanize, the lack of enough good, well-paying jobs is holding back Zambia's growth potential and its ability to maximize gains from economic transformation," said Jorge Tudela Pye, World Bank Economist and co-author of the report. "The country must prioritize strategies for new and existing firms in labor-intensive sectors to rise and become more productive, creating more and better jobs for the growing working-age population."
