I would like to follow-up on Dr. Bourgeois’ invitation to go deeper into the “raison d’être” of the different scenarios (in his comments on Malawi). Despite Zambia’s 6-7% annual economic growth in the last decade, such growth has not translated into significant poverty reduction. The World Bank reports that 60% percent of the population lives below the poverty line and 42% are considered to be in extreme poverty. The urban picture is far better than the rural: in the Copperbelt and Lusaka provinces, for example, poverty incidence is fairly low (22% and 34% respectively), whereas in the rest of the country, which is dominated by agriculture, poverty rates are greater than 70%. Almost 90% of Zambians who live below the extreme poverty line are concentrated in rural areas. Despite vast potential and stated commitments to diversification, the mining sector continues to dominate the economy.
What will the situation be in 30 years? From an outsider’s perspective, for the positive “Kudyela Scenario” to come to fruition, Zambia’s growth will need to translate into a corresponding increase in job creation and progress on poverty reduction. Zambia’s natural resources will need to be fully harnessed to foster structural transformation and inclusive job creation. Currently the country is dependent on copper mining, which accounts for about 80% of foreign exchange earnings and only 6% of total revenues (African Dev. Bak, 2013). Thus, Zambia’s long-term economic prospects hinge on the prudent utilization and deployment of copper revenues as well as harnessing the potential for agricultural development. The challenges that are likely to be encountered, as often occurs in extractive-based economies is that rents from these activities are captured by a country’s elites instead of being put to use for the broader development agenda of the country. This would indicate that there is a risk that the “Mwadyamweka Scenario” may occur.
Andrea Cattaneo