PMRC Newsletter: January – December 2020

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Dear Friends & Colleagues
POST COVID-19 ECONOMIC RECOVERY: WHAT NEXT FOR THE AFRICAN CONTINENTAL FREE TRADE AREA

The Coronavirus pandemic is a challenge that was not anticipated by the global economy and it arrived at a period when prospects for many African countries were promising. At the beginning of 2020, Africa was on track to continue its economic expansion, with growth projected to rise from 2.9 per cent in 2019 to 3.2 percent in 2020, and 3.5 per cent in 2021; but the pandemic arrived and destabilized almost all economies in Africa. In view of this, counter measures have since been instituted which are aimed at; (1), protecting the health of the citizens, (2) minimizing the spread of the virus as much as possible and (3) ensuring that the economies are shielded from adverse negative effects.

As of July 13th, there have been more than 12 million COVID-19 cases reported globally with approximately 500,000 deaths. In Africa, the confirmed cases stand at approximately 578,307 with more than 12,000 deaths and 284,972 recoveries while in Zambia, we have 1,895 cases 1,348 recoveries and 42 deaths. The impact of the COVID-19 pandemic has been both extensive and severe, including but not limited to, a health and an economic strain characterized by financial market stress and a collapse in commodity prices in several countries. The outbreak has led to disruptions in supply chains, created uncertainties and significantly dampened near-term growth prospects. The reality may depict that Africa has not been as severely affected by the pandemic compared to other global regions but in reality; Africa is vulnerable to the impact of COVID-19 because it is highly dependent on imports for its medicinal and pharmaceutical products among others. Key sectors of the African economy such as tourism, aviation, commerce, energy; are already experiencing a slowdown as a result of the pandemic. The external effects also emanate from direct trade links between affected partner continents such as Asia, Europe and the United States. This has further caused decline in Foreign Direct Investment (FDI) and remittances from African Diaspora among others.

WHAT IS THE CFTA?

The African Continental Free Trade Agreement (AfCFTA) is a flagship project of African Union Agenda 2063 and refers to a continental geographic zone in which goods and services are to move with no restrictions; among member states of the African Union (AU). The AfCFTA aims to boost Intra-African trade by providing a comprehensive and mutually beneficial trade agreements among the member states, covering trade in goods and services, investment, intellectual property rights and competition policy. The agreement brings together 1.2 billion people with a combined Gross Domestic Product (GDP) of more than US$2 trillion. The CFTA was scheduled for implementation from 1 July 2020 but this has been postponed to 2021 because of the impact of COVID-19 and the need for African leaders to focus on combating the pandemic in their respective countries.

Prospects of the CFTA amidst COVID-19 pandemic

Although the implementation of the African Continental Free Trade Agreement (AfCFTA) has been postponed due to COVID-19, African countries should continue to make progress in their national plans to liberalise goods and services. The COVID-19 pandemic has negatively affected the entire African Continent but also provides an opportunity for African countries to embark on innovative ways of business and resilience. Even though the official launch of the CFTA was postponed to 2021, African nations should swiftly begin to put up all the necessary requirements in place. African Nations must build upon the pillars of integration and start building regional value chains to advance industrialization and improve infrastructure. From the COVID 19 pandemic, it is evident that African nations must now realize the need to adopt a developmental regionalism approach to trade integration. The fight against COVID-19 must awaken urgency among African nations consolidating the prospects of expediting integration as foundation for the implementation of the CFTA when it shall be launched in 2021. Beyond the immediate response, recovery strategies for Africa should include a strong structural component to reduce dependence on external financial flows and global markets, and develop more value-adding, knowledge-intensive and industrialized economies, underpinned by a more competitive and efficient services sector. Financing for such ventures can adopt models such as the issuance of bonds (as is the case with Zambia) as well as under the Public Private Partnerships (PPPs) framework. This crisis provides an opportunity to take more concrete steps towards setting the groundwork for a successful implementation of the African Continental Free Trade Agreement (AfCFTA).

ZAMBIA’S POSITIONING

In view of the current global challenges, Zambia must remain strategic and position itself for a resilient and determined road towards economic recovery. Yes, the COVID-19 has negatively affected the economy and several businesses and now is the time to formulate a “ZAMBIA POST COVID ECONOMIC RECOVERY ROADMAP”. This strategic plan should detail steps that must be taken to springboard the economy on a path of recovery. It should detail how the 2020 national budget will be re strategized as well as how economic sectors will be strengthened to ensure that the country is able to generate substantial amount of revenue despite the difficult times facing humanity. This is also a call for concerted efforts between Government, civil society, academia and private sector to work out a plan on enhancing domestic resources mobilization using innovative means. The report that more than K6 billion has been raised from the intended K 8 billion under the COVID bond is very encouraging and will indeed assist to improve the liquidity levels in the economy that have reduced due to the Coronavirus pandemic.

The call for Zambia is to remain focused towards our aspirations in the Vision 2030, the Seventh National Development Plan (7NDP) and indeed our targets in the Medium Term Expenditure Framework (MTEF). This period should be used to re-stratergise our efforts as a nation so that we are resilient to negative global occurrences on our economy. This is also the time for Zambia to push further discussions with the International Monetary Fund (IMF) for processes and procedures towards a possible IMF programme. Overall, this period is a time to enhance our efforts as a nation as we strive towards recovery and growth of our economy.

Zambia has been pursuing economic diversification ever since the first republic and copper mining has been the major forex earner but with notable fluctuating trends over the years. As early as the First National Development Plan (1966-1970), both the need to diversify away from copper, as well as the emphasis of growth of other sectors such as agriculture and manufacturing, were emphasized. Economic diversification is the process of shifting an economy away from a single or dominant revenue source towards multiple sources from a growing range of sectors and markets. Economic diversification is widely viewed as a positive objective in sustaining economic growth as it enables countries to be less vulnerable to adverse terms of shocks by stabilizing export revenues. According to the Seventh National Development Plan (7NDP 2017-2021), the key sectors towards Economic Diversification in Zambia include; Agriculture, Tourism, Energy, ICT and Manufacturing sectors. One of the primary benefits of diversification is that a diversified economy creates a sustainable cycle of economic activity where sectors and businesses continually interlink and share benefits even as the economy grows. This also increases prospects for employment and growth and is in alignment with the multi sectoral development approach being espoused in the 7NDP today. Zambia has continued to pursue economic diversification with policy shift away from mining towards agriculture, manufacturing and tourism among other sectors. The focus of this article is the manufacturing sector.

The Manufacturing sector in Zambia accounts for approximately 11% of the country’s GDP and has been growing at an average annual growth rate of three (3) percent in the last five years, based on figures available from the Zambia Development Agency (ZDA). Zambia’s manufacturing sector has considerable investment potential as the domestic economy is relatively well endowed with resource factors such as raw materials, required labour force, abundant water and rich minerals. The priority areas for investment in the sector include; food processing, textiles and clothing, mineral processing, chemical products, engineering, leather products, electrical goods, pharmaceutical products and packaging materials. (ZDA, 2018). In a quest to diversify the economy in the manufacturing sector, the Government has been working on setting up Multi Facility Economic Zones, Industrial Parks and other support infrastructure to accelerate industrialization. The actualized investment into the Multi Facility Economic Zones is estimated at US$ 3.3 billion, with more than 15,000 jobs created. In a bid to promote local content, the Government is implementing the National Local Content Strategy aimed at fostering business linkages between micro, small, medium and large enterprises. The strategy is also meant to enhance local content along the value chain, which will benefit Zambians as millions of dollars are spent annually on goods and services, which are imported into the country. The Government through the Zambia Development Agency is also implementing the business linkage programme aimed at creating synergies in industry and market access for micro, small and medium enterprises.

The success of diversification depends on the mix, sequencing, and timing of investments, policy reforms and institution building, and on the consistency with the underlying assets and related comparative advantages of the country. Investments in skills, infrastructure, institutions and governance quality (ie. enhancing the transparency, accountability, and predictability of Government decision-making) increase the likelihood of success of diversification but are in turn affected by the extent of diversification. Providing the foundations for structural transformation and private sector driven growth is an essential element in achieving a broader base of economic activities. Further, clear, transparent and predictable business regulations that provide a level playing field among investors (small and large, foreign and domestic) are essential for economic diversification.

Conclusion

Zambia has to make fundamental policy shifts if the country is to achieve the objectives of the Vision 2030. Achieving these objectives is essential to repositioning the Zambian economy onto growth and development, in a manner that makes the country less susceptible to both domestic and external shocks. This is seen as a critical area of focus midway before the expiry of the Vision 2030. The Seventh National Development Plan (7NDP) provides a clear roadmap of what needs to be done to diversify our country’s economy, going forward there is dire need for the mobilization of resources that will finance the various strategies and policies as outlined within the 7NDP towards the realization of economic diversification.

The Zambian Government through the Seventh National Development Plan (7NDP) have identified the important role of Information and Communication Technology (ICT) in service delivery as part of its e-governance agenda. According to the 7NDP, ICTs are a catalyst for socio-economic development as they promote competitiveness and are an enabler of good governance. Though ICTs over the years have been adopted slowly by Government into the e-governance agenda compared to other countries in sub Saharan Africa, Zambia has focussed on gradually developing ICTs to spur growth in the digital economy through technologies such as mobile phones, broadband internet and computers which have changed the way people work and access services in the Health, Agriculture, Education and Financial sectors. In the wake of the COVID-19 pandemic, teachers and learners have had to adapt to a world of almost universal online education that solely relies on ICT infrastructure as nearly 94% of all learners have faced closures and disruptions to their school calendar.

In the education sector, Zambian schools have over the years adopted the use of computers, projectors, photocopiers and other related ICT equipment by both teachers and learners. The adoption of ICTs in the sector has occurred on two levels. The first has been the introduction of computer studies as part of the curriculum for learners as a subject and the second level was the introduction of ICTs training in tertiary institutions for teachers as a way of facilitating for better knowledge transfer to learners.

One of the objectives of using ICTs in the education system in Zambia has been to improve and expand access to education, training and research but this process has not been without challenges as schools acquire and roll-out use of ICT equipment in various levels of teaching and learning. There are a large number of initiatives that are using ICTs in an attempt to improve the quality of school education. Whereas, children in urban areas have more access to laptops and the internet in schools and at home, children in rural areas are faced with a severe digital divide exacerbated by poor access to electricity and poverty. Some of the challenges this process has faced stem from inadequate computers for use among learners leading to a higher computer-learner ratio, lack of infrastructure to support delivery of subjects and in some instances other schools use semi-functional computer laboratories. Another huge challenge is that of internet connectivity especially in rural areas while in urban areas the sustenance of the internet services is difficult due to budget constraints. Zambia’s current mobile broadband penetration currently stands at 51.3% while fixed internet penetration is 0.5% (ZICTA Q1-2020)

In order to actualise the e-governance agenda of improved service delivery in the education sector, the Government is urged to prioritize the formulation and implementation of an ICT policy which will guide implementation of efforts to improve ICTs in schools such as funding for ICTs equipment and infrastructure as well as teacher training for better delivery of subjects in schools.

In conclusion, the use of ICTs in the education sector may not be the solution for all the challenges that are currently faced in the education sector, many challenges still remain in ensuring universal access to education. However, the continued implementation of ICT education in both rural and urban areas in Zambia presents a great opportunity for the nation to have greater access to information and communication platforms that can foster new and better skills for the young generation and this will enable Zambia to make use of, contribute to and create international information platforms. In order for Zambian schools to derive the benefits that come with the use of ICTs in schools, serious financial commitment and implementation frameworks are required especially for girls and other vulnerable groups to guarantee them successful ICT skills acquisition and quality education in order for them to be easily competitive in the global labour market.

This article is an extract from a PMRC Analysis titled; Implementation Status and Challenges of ICTs in Zambian Schools. To access the analysis visit www.pmrczambia.com

The railway system in Zambia is comprised of an extensive network of surface transport with the potential to offer safe, efficient, and environmentally friendly transport across the country and the region, connecting all major centres of economic activity and facilitating growth.

There are two main players in the Zambian Rail Sector, namely, Zambian Railways Limited (ZRL) and Tanzania-Zambia Railway Authority Railway Authority (TAZARA). ZRL is wholly owned by the Zambian Government and manages a rail track covering almost 1,000 km. Since the time of concession from 2003 to 2012, the tonnage moved on rail had declined drastically from 1,323,191mt in 2004 to 690,793mt in 2009. This was due to a lack of investment in track rehabilitation and infrastructure upgrades by the concessionaire. After the cancellation of the concession on 10th September 2012, tonnage moved improved marginally to 702,603mt in 2017.

TAZARA on the other hand is co-owned by the Governments of Zambia and Tanzania. It is a key railway that covers approximately 1,900 km from Kapiri-Mposhi in Zambia to Dar-es-Salaam in Tanzania. Amidst daunting operational challenges, TAZARA’s annual freight traffic volumes hit a low of 122,473mt in 2015 compared for instance to figures of over 530,000mt in 2010.

Challenges in the sector

The railway traffic dwindled to current levels following the deregulation of road transport in the region, due to high fixed costs, low investments in rail track infrastructure, working capital and rolling stock. There is also a lack of integration among railway companies within the region who have opted to operate as autonomous entities. The average speed of locomotives has also averaged 40km per hour, which is too slow for modern business.

Another challenge relates to the fact that TAZARA and ZRL have insufficient locomotives and wagons. For instance, in 2014, ZRL had a total locomotive fleet holding of 37, out of which 24 were operational while 13 were defective and extensively cannibalized.

Government interventions to increase rail freight

The Seventh National Development Plan (7NDP) prioritizes the construction of new rail spurs and the rehabilitation of existing lines to increase operational efficiency, reduce the cost of freight, and increase the tonnage being carried. Furthermore, the Government has pledged to encourage private investment in the construction of other rail spurs, including intra-city transit systems. Plans are also in place to migrate the rail gauge from the existing Cape gauge to Standard gauge to enable higher speeds and higher tonnage of freight. In 2012, Government nullified its concession with the Railway System of Zambia (RSZ) in 2012, leading to an 18% growth in the traffic of ZRL between 2012 and 2017. In October 2018, The Industrial Development Corporation (IDC) Board approved an investment of $850 million into rail infrastructure and rolling stock for ZRL. This investment is important because it is a wholesome package intended to alleviate capacity constraints of ZRL.

In January 2012, Government brought into effect a Statutory Instrument (SI) to compel transporters of heavy cargo to move 30% of bulk cargo from road to railway in order to optimize the transport sector and promote the sustainability of the rail subsector. The implementation of the 30% quota system is aimed at preserving road infrastructure as well as increasing revenue and efficiency in the railway operations.

Recommendations and way forward

There is need to unbundle the rail line operations through the creation of the Railway Development Agency, so that rail infrastructure development and management are separated from operations. ZRL will focus on running its business operations competitively and in a sustainable manner without focusing on maintenance and investment in rail track infrastructure.

Government is urged to continue with maintenance and upgrading of rail infrastructure to reach the desired speed of 80km per hour for freight trains and 120km per hour for passenger trains.

Zambia should engage in bilateral/multilateral railway route management groups with other countries to collaborate on rail use and infrastructure development to increase volumes and ensure the sustainability of the rail sector.

Government is urged to change the policy environment and encourage private train operators to join the Rail Sector industry. These operators can then be charged for use of rail track infrastructure, thereby boosting Government revenues.

After liberalization of the rail sector, Government would then need to institute a regulatory body to monitor market performance, competition and safety issues to complement the work of the General Inspector of Railways at the Ministry of Transport and communications.

This article is an extract from a PMRC Analysis of Zambia Rail Sector – Structural Deficiencies & the Way Forward. To access the analysis visit www.pmrczambia.com

The COVID-19 pandemic has disrupted industrial and economic output in countries and regions around the globe with each industry facing unique characteristics that present novel challenges in the context of the pandemic. Zambia’s mining industry which is considered an ancient and global industry with origins that date back to the foundations of civilization and has had positive impact on economic development throughout history has not been spared.

Zambia’s mining industry in the context of COVID-19 is now faced with many significant challenges, many of which we’ve never seen. The prevailing conditions have made it difficult for mining companies to dial up capacity while managing the risks of pandemic in the wake of declining commodity prices triggered by sudden economic stoppages in several regions around the world. This drop in prices has affected operational margins for players in the industry with some being pushed into negative cash flows. While it can be argued that price volatility is familiar to the mining industry, the steps taken in managing it in each context pose a challenge for industry players that must be tackled by building consensus from all stakeholders.

PMRC therefore welcomes Government’s decision to constitute a team of cabinet ministers, technical experts and trade unionists to look at the sustainability of the mining sector during and beyond COVID-19. While protection and sustainability of mining sector jobs is vital the team needs to ensure that the following measures are strongly considered;

Immediate focus must be placed on the protection of health and safety of employees while striving to keep mines functioning as effectively as possible. This can be achieved through the deployment of crisis response units for critical decision making and to monitor financial health of the mines to maintain cash flows in efforts to ensure continuity in operations and supply chains. Government is urged to mitigate risks to disruption by instituting early warning mechanisms and implementing measures to protect industry cash flows by deferring tax obligations, considering extension of deadlines and suspension of tax measures that have potential to stall mining and supply chain operations.

As easing of restrictions around the world is rolled out, Government is urged to prioritize and maintain safety and well-being of employees in the face of possible COVID-19 risks. Timing of the sector’s recovery period is likely to vary across the globe and there’s need plan how this will affect operations and business processes with the possibility of restricted travel. Government is urged to institute a fiscal regime that will respond to the prevailing times and attract greater investment to spur a quick rebound. Government is further urged to ensure minimal disruptions to the supply chain especially critical supplies and consumables that keep the mining sector functional.

The effects of the pandemic may inflict changes that in some cases maybe permanent (“The New Normal”). It is therefore important for industry players to re-think strategies around commodity demand and pricing, work space layout, social distancing and response to future crises. Given the economic impacts of the crisis mining sector players are urged to prioritise local suppliers while establishing a fair balance with international suppliers.

Like many industries with big challenges to future growth, change is being driven in mining by technology, innovations, better processes, social demands and even new opportunities. The unprecedented impact and scale of the COVID-19 pandemic has negatively affected many world over and disrupted livelihoods. The situation continues to be dynamic and calls for rapid solutions and effective monitoring. Government is urged to consider the immediate priorities and forecast the future of the mining industry and its evolution. This is one sure way to designing smart strategies to gain competitive advantage and staying ahead.

As we dust off our challenges with masks on and examine what the future holds for the mining industry we need to embrace the “new normal” and accelerate efforts to make operational employment in the mining sector safer and sustainable to support Zambia’s Economic Development Agenda.

Earlier this year, the Energy Regulation Board approved ZESCO Limited’s application for an upward tariff adjustment effective 1st January 2020 and since then there have been a number of positive power sector policy and regulatory reforms that have taken place. The Government of the Republic of Zambia approved the Revised National Energy Policy, 2019 which is anchored on the Seventh National Development Plan (7NDP) and Vision 2030 in order to guide the development and management of the energy sector by considering technological advancement and developments in the energy sector. The Electricity and Energy Regulation Acts were revised to provide for sale and purchase of electricity within and outside Zambia and improve the regulatory environment among other objectives.

Adequate and reliable power supply underpins any successful economy and Zambia has struggled to generate enough electricity to meet growing demand as the country has developed.

Load management has in the past and present time led to severe consequences for the economy as businesses and small to medium sized enterprises have scaled back production and households have had to grapple with long hours of darkness. As demand continues to grow it is essential that Zambia gets the power sector generation mix right for the country to fulfil its potential for growth.

Under investment in the power sector over the years has been largely due to below cost tariffs and a bureaucratic regulatory environment which has slowed private sector investment. Some of the challenges identified include;

Over dependence on Hydrological sources of power which made up 80.45 percent of installed capacity as of 2019. The remainder of the generation mix comprised of coal (10.06%); HFO (3.69%); diesel (2.80%); and solar (2.99%).

Modelling trends from Zambia’s river basins suggest that hydropower potential will gradually decline in the future due to climate change and increasing water demand from other sources.

Low rates of access to electricity in rural areas at around 4.4%. Despite this the Rural Electrification Authority successfully completed the implementation of ten carry-over projects in six provinces across Zambia consisting nine Grid Extension Projects and One Mini Hydro Power Project

Below cost tariffs which have constrained ZESCO’s ability to undertake new investments and to a degree its ability to raise capital which in turn is linked to its financial situation.

This mix of factors point to the need for Zambia to focus on attracting private investment in the power sector and speeding up projects that are near completion through;

Prioritization of projects that have potential to yield high economic returns in the short to medium term and stemming cost escalation.

Establishment of a central planning function in the Ministry of Energy, to develop a strategic vision and delivery plan for increasing and diversifying power capacity in the country through investment in Independent Power Producers.

Establishment of a central procurement function to sit alongside the planning function and secure investment in line with the Government’s strategic vision. The procurement process is lengthy and opaque, which has discouraged investment across the board. The planning function should look to centralise commercial capability, run more competitive tenders and streamline the procurement process, which will lower barriers to entry for investors and deliver value for money for consumers.

Improve the credit-worthiness of ZESCO: as an off-taker, it is essential that investors have confidence that the organization can purchase the energy generated, which can be improved through increased financial transparency and providing more secure guarantees. ZESCO further needs to revisit the administration of its lifeline tariff by exploring viable options for reforming the current subsidy policy whose targeting is poor (The lifeline subsidy policy currently covers all households regardless of income status).

Conclusion

Historically, Zambia’s approach for power development has been for the Government, via ZESCO, to undertake investment in capacity. The Government has also led the recent Zambia Power Rehabilitation Project which involved various capacity and transmission upgrades as well as demand side management measures. Recently, ZESCO Limited and Power China signed three contracts to develop 600MW (AC) grid-connected Solar PV Power Plants to be located in Chibombo, Chirundu, and Siavonga Districts. This marks a giant step in ZESCO’s efforts to diversify the energy mix in the wake of climate change.

As noted in the 7NDP, Zambia has plentiful resources for electricity generation, including hydropower, solar, biomass, geothermal. The challenge is getting investment in power plants that can convert these resources into useful electricity. There is no shortage of potential pipeline projects. However, many of these projects can only reach completion if the correct policy framework is developed and supported.

Public Financial Management (PFM) reforms entail changes to laws, systems and processes used by Governments, to mobilise revenue, allocate public funds, undertake public spending, account for funds and audit. A strong PFM system is essential for effective Governance because effective delivery of public services is associated with poverty reduction and growth. To this effect Government has made reforms to the Public Finance Management Act and has intentions of reviewing the Public Procurement and the Loans and Guarantees Act;

Public Financial Management (PFM) Act of 2018; From 2004 when the PFM of 2004 was enacted, few PFM legal reforms occurred. There had been challenges in achieving the intended purpose of the Act because of gaps such as absence of portions for handling cases of financial misconduct. The Revised PFM Act of 2018 came into effect due to stakeholder’s request as well as Government’s own realization to strengthen the legal framework aimed at improving management of public resources.

Public Procurement Act; In 2015, Government introduced an electronic Government Procurement (E-GP) system aimed at enhancing transparency, riding the Government system of corruption and supporting provisions of the PFM Act. The E-GP system is designed to enhance socio-economic development and adherence to the national development plan by reducing the procurement cycle and associated costs. However, the current procurement system features structural and content inadequacies to support the PFM Act leading to avoidable losses for the Government. There are inadequacies in fund release delays and inflated quotations, affecting project implementations and contract management. For this reason, there is need to revise the Public Procurement Act to incorporate price referencing and bench marking to seal revenue leakages.

Enactment of the Planning and Budgeting Bill of 2019. Once enacted this legislation will help to ensure that there is an increase in transparency, accountability and citizens participation in public finance management. The poorest in society will be incorporated in decision making especially on matters that hinge on budgeting. The powers which lie in Cabinet and Parliament on budgets and plans will be equally distributed among citizens and their representatives.

Review of Loans and Guarantees legislation; This will empower Parliament to monitor debt contraction by the Executive. The Minister of Finance will be compelled to table before Parliament justifications for contracting debt. This will guarantee debt sustainability for continued economic growth and therefore enhanced public finance management.

Enhancing domestic Resource Mobilisation (DRM)

Legislative reforms from the expenditure side of the budget need to be matched with reforms to the revenue side through enhanced DRM. DRM refers to the generation of Government revenue from domestic resources. Tax revenue, as a percentage of GDP is one measure of the degree to which the Government controls the economy’s domestic resources. In the 1970s Zambia’s tax revenue as a percentage of GDP was 42 % compared to 15.2% in 2017 and 19.1% earlier projected for 2021 [ this figure has since been downgraded in view of the COVID-19 pandemic]. The statistics mean a lot needs to be done to raise domestic revenues given the hard-to-tax informal sector in Zambia. The informal sector’s tax potential in Zambia is about 42% of total tax revenues. Amongst the several strategies that could be used to enhance DRM is the need to upscale the Massive Land Titling Programme which can enhance payment processes from ground rates. There is also need to equip revenue administrators with knowledge and tools to raise revenue in the hard-to-tax sectors through the use of intermediaries. The need to fight tax evasion through early detection cannot be overemphasied. This could be achived through , smarter auditing,effective investigation and prosecution that hold evaders accountable and thus create public confidence in the tax system.

Approximately 50% of adults in rural areas are unbanked or have no access to financial services (Finscope Report 2015). Access to financial services has been a challenge due to various reasons, which among others include low population density in rural areas and extremely poor infrastructure, compounded by low productivity, making it difficult and expensive to provide such services. The importance of increasing access to financial services cannot be overemphasized because of the key role it plays in reducing poverty, increasing employment and attracting development. This can consequently help to bridge the rural-urban economic divide; with 77% poor people in rural areas compared to only 23% urban areas (Living Conditions Monitoring Survey,2015).

To this effect the Zambian Government developed the Rural Finance Policy and Strategy of 2012, a key policy document aimed at promoting access to financial services in rural areas and thereby reducing vulnerability and promoting prosperity of the rural population. Some of the interventions/strategies that have been implemented by the Government as stated in the Rural Finance Policy and Strategy to promote access to financial services include the following among others:

1. Enactment of the Credit Reporting Act in 2018 to provide for the establishment of a Credit Registry and the overall governance and management of credit reporting agencies including the protection of data subjects as well as information sharing and reporting, to enable assessment of credit worthiness of data subjects.

2. Support efforts to enable inter-operability of the national payment switch to reduce the cost of financial services and modernize payment systems. The interoperability of payment systems was effected in 2019 and it is hoped that this will effectively facilitate better access to financial services for the unbanked in rural areas by reducing costs of financial services and modernization of payment systems.

3. Revision of the National Payment Systems Directives on Electronic Money Issuance. In 2018, the Bank of Zambia revised the National Payment Systems Directives on Electronic Money Issuance that were initially issued in 2015. The key changes to the directives included the following:

Permitting customers to hold multiple wallets.

Permitting both commercial banks and approved non-bank financial institutions to host Holding Accounts for electronic money.

Inclusion of specific guidance on the use of interest earned on Holding Accounts.

Provisions for consumer protection and the need for e-money institutions to have procedures for dealing with customer complaints.

Consequently, the volume of transactions processed on mobile money platforms in 2018 rose by 76.0% compared to 2017.

4. Support towards the implementation of micro-insurance products in the agriculture sector; In 2017, Government awarded Mayfair Insurance Company a contract to offer weather-based index insurance to all farmers who benefited from Government input subsidies through Farmer Input Supply Programme (FISP).

5. In September 2018, Government established the Rural Finance Unit to coordinate rural finance, under the Department of Investment and Debt Management at the Ministry of Finance (MoF).

6. In 2016, Government enacted the Movable Property Security Interest Act (MPSI) to Support efforts to fully establish unified collateral registry, including the use of movable property. The Act is aimed at making the business environment attractive for lenders to accept movable property as collateral. The MPSI Act seeks to make movable property a reliable form of collateral, thereby diversifying the nature of mobile assets used as collateral resulting in enhanced borrowing.

7. The Bank of Zambia has also been at the fore of promoting the Financial Literacy Week aimed at empowering people with knowledge on available financial products and services as well as creating momentum on both the supply and demand side information for the development of consumer centric financial products and services.

RECOMMENDATIONS

In order to further upscale financial inclusion in rural areas specifically and the entire country generally, the following issues need to be addressed:

The Central Bank of Zambia needs to urgently develop Agency Banking Regulations to guide and accelerate agency banking in underserved rural areas and consequently increase the agency banking’s share of transaction volume by financial agents.

The Development Bank of Zambia needs to play an active role as an apex financial institution providing finances to micro-financial institutions for onward lending to rural areas as espoused in the Rural Finance Policy and Strategy and Rural Finance Expansion Programme (RUFEP) programme design.

Government and Zambia Agriculture Commodity Exchange (ZAMACE) needs to put in place measures that will guarantee smallholder farmers’ active participating in the agriculture commodity exchange as opposed to the current scenario where majority of farmers having access to the agriculture commodity exchange are well-established farmers.

The Pensions and Insurance Authority (PIA) needs to upscale its efforts in ensuring that the necessary micro-insurance guidelines/principles are promptly put in place to promote growth of insurance uptake in rural areas and the country at large. Additionally, legislation (Insurance Act) needs to be amended to accommodate licensing of micro-insurers and facilitate the opening up of the distribution space.

Following the enactment of Movable Property Security Interest (MPSI) Act in 2016, Patents and Companies Registration Agency (PACRA) and other stakeholders need to increase sensitization in rural communities on the new options available to smallholder farmers through MPSI Act regarding use of movable assets as collateral to access finance.

The Zambia Statistics Agency needs to include “financial inclusion variables” in its routine national surveys to be able to measure financial inclusion statistics as opposed to the country relying on private sector sanctioned surveys to measure financial inclusion.

The Ministry of Agriculture needs to decisively deal with complaints specifically relating to inconsistencies in Weather Insurance Index payouts where some farmers receive payouts while others do not, yet they are residing in the same geographical area affected by the drought. Enhanced confidence in Weather Insurance Index will enhance uptake of other micro-insurance products by farmers.

Some of the key activities during the Financial Literacy Week need to be extended to the rest of the year and priority should be given to rural areas with lower levels of financial inclusion.

Climate Change in Zambia has also negatively impacted the Zambian agricultural sector vis-à-vis an increase in the incidence of hunger due to destruction of crops, reduction in cultivatable land and increased soil erosion. On an economic outlook, the production of staple crops which include maize, millet, sorghum and rice has been dropping steadily in recent years.

According to the Crop Forecast for the 2018/19 Agriculture Season, maize production declined from 2,394,907 metric tonnes in 2017/18 farming season to 2,004,389 metric tonnes in 2018/19 accounting for 16% decline in production due to climate change effects that led to prolonged dry spells15. Out of the total production of maize small and medium scale farmers contributed 94.5% while large scale farmers took up 5.5%16.

Electricity is key to improving agriculture production, food security and boosting agribusinesses. Agriculture uses electricity to operate machinery and equipment, to heat or cool buildings, for lighting on the farm, for irrigation and indirectly in the production of fertilizers and other chemicals produced off the farm. The Seventh National Development Plan (7NDP) indicates that most rural parts of Zambia have low access to electricity and have poor road networks to attract investment and contribute effectively to diversification and job creation, especially in the agriculture sector17. The increased extent of load shedding to fifteen 15 hours a day is only worsening the state of vulnerability of rural farmers.

Farming has been highlighted as a significant contributor to climate change, but it has also been affected by negative effects such as the two main greenhouse gasses, methane and nitrous oxide, which are released in high amounts during crop and animal production. In aiming to reduce these greenhouse gasses, farmers need to adopt farming practices that will not harm nature or negatively affect the climate. These farming practices include Climate Smart Agriculture techniques such as Conservation Agriculture (CA). CA is an approach which includes a set of practices which conserve the soil, water, soil moisture, enhance fertilizer and seed use and in turn saves money and time.

When it comes to adaptation measures in the agricultural sector, since Climate Change is already When it comes to adaptation measures in the agricultural sector, since Climate Change is already running its course, the Zambian Government is urged to encourage more farmers to find means of improving sustainable agricultural practices. Data from the 2015 national representative Rural Household Survey, conducted by IAPRI found that only 8.8% of smallholder households adopted Conservation Agriculture (CA) as a climate smart agriculture technique in the 2013/’14 farming season18. The rates were however, slightly higher in areas that were affected by climate change effects such as the Agro-Ecological Zone I and II, in the southern parts of the country, where 11.7% of farmers adopted Conservation Agriculture as a climate smart technique19.

Average Annual Temperatures

The average number of ‘hot’ days per year in Zambia has increased by 43 (an additional 11.8% of days) between 1960 and 2003.The frequency of cold days and nights has decreased since 1960 in all seasons and the average number of ‘cold ‘days per year has decreased by 22 (6% of days) between 1960 and 200320. Figure 1 shows that the average temperature for each month in a calendar year has increased when comparing periods 1960-1990 and 1991-2016.
Average Annual Precipitation

Mean annual rainfall over Zambia has decreased by an average rate of 1.9 mm per month (2.3%) per decade since 1960. This is largely due to decreases in DecemberFebruary rainfall (or part of the wet season), which has decreased by 7.1 mm per month (3.5%) per decade21.

Figure 2 indicates that the average monthly precipitation for the months of September, October, November, December and February have reduced when comparing periods 1960-1990 and 1991-2016.

LINK FOR THE PUBLICATION

The Agriculture sector is very critical for achieving diversification, economic growth and poverty reduction in Zambia. This sector is the fourth largest contributor to GDP and the largest contributor to employment. It contributes about 19 percent to GDP and employs majority share of the population. Family agriculture is the backbone of the rural economy and thus holds great potential for modernization due to its predominance.4

Given the potential for increased agricultural output and the importance of agriculture to the Zambian labor force, the Government is prioritizing agriculture as a means of driving diversified growth but the reality is that Agricultural output is far below what is possible. According to the Zambia Development Agency (ZDA), 58% of Zambia’s land area has medium to high agricultural potential, but less than 20% of agricultural land is currently in use. Agriculture represents roughly 20% of total Zambian GDP and 10% of its total exports, yet it employs over 70% of Zambia’s population.5

Agriculture is very viable but has been with its challenges. The 2018/2019 farming season underscored the continued challenges of climate change and therefore the importance of risk mitigation and management measures. Addressing climate related challenges requires the adoption of climate smart agricultural technologies and practices. These are already being disseminated in the 2019/2020 farming season and will continue in the subsequent farming seasons. We also observe that in order to reduce dependency on rain-fed agriculture, Government is pursuing various irrigation development projects and an example is the Mwomboshi dam in Chisamba District which has been completed, while the irrigation scheme will be completed in 2020. There are other notable projects currently being developed.

In relation to the FISP, Government is continuing with the implementation of the Farmer Input Support Programme with 60% under direct input supply and 40% under the e-voucher system. Over 716,000 farmers accessed inputs under the e-voucher system. Further, around 5,800 agro-dealers throughout the country have been involved in the supply of agro- inputs. The challenge here is to reform the implementation and management of the Farmer Input Support Programme so as to cut the administrative costs as well as avoid wastage.

Zambia remains endowed with numerous tourism resources and attractions however, local tourism has still remained unsatisfactory. Further, the infrastructure, especially roads leading to the tourist sites, needs to be prioritized, in the infrastructure projects currently being implemented in the country. This applies to all the major tourism zones. There is immense potential for growth in the Tourism sector and the diversification effort in the sector can be achieved by integrating the country’s rich cultural heritage into tourism packages beyond traditional ceremonies and promoting domestic tourism . With regards to foreign tourists, the aim must be to lengthen tourists stay to an average of six days from the current four days. These prospects would indeed promote growth in the Tourism sector and ensure increased contribution to GDP.

Tourism Sector

What has been planned to promote tourism

Promoting tourism-related infrastructure is one strategy the Government intends to use to diversify the tourism sector.

The Government will develop, upgrade and rehabilitate roads, viewing loops and airstrips to and within the major national parks, namely Kafue, Lower Zambezi and the Mosi-oa-Tunya to efficiently interlink the major destinations in the southern tourism circuit and South Luangwa to prolong the tourism season from seven to 12 months per annum.

The development of arts and culture infrastructure will also be supported, to improve the contribution of the country’s unique natural and cultural heritage to diversify the tourism product. Cultural villages that are currently undergoing construction will be completed.

The Government will also promote the development and expansion of non-traditional modes of tourism, such as eco- and agro-tourism and cultural and community-based tourism.

LINK FOR THE PUBLICATION

https://pmrczambia.com/wp-content/uploads/2020/01/Economic-Diversification-in-Zambia-Are-we-getting-there-Assessing-the-Prospects-for-Economic-Diversification-in-Zambia-.pdf

Children’s rights assert that all children must be protected from violence, abuse, neglect and exploitation but this is not always the reality for many children globally. As poverty, armed conflict and HIV rates continue to soar, the number of orphans and displaced children is equally increasing. The United Nations International Children’s Emergency Fund (UNICEF) estimates that there are about 52 million orphans in Africa; a figure accounting for children who have lost either one or both parents to any cause of death and is under the age of 18.

In many African countries, poverty, AIDS and armed conflict result in neglect of children and are major factors contributing to an overburden on and the undermining of traditional social support systems. Given these factors, the extended family is increasingly unable to cope with assimilating new members such as orphaned children, leading to destitution. Although child-care facilities have been helpful in absorbing some of these children, the system has been overwhelmed and in some cases can no longer cater for children over the age of 18, as such they get thrown out. This has resulted in a continued rise in the prevalence rate of child-headed households. The Zambia Statistics Agency identified a total of 5,986 child-headed households in the 2010 Census. The demographical data shows that 3,803 child-headed households are in rural areas while 2,183 are in urban areas. This situation has been exacerbated by the HIV/AIDS epidemic that has left many children destitute, orphaned and living on the street. Similarly, rising levels of poverty and a break-down in traditional family structures has also contributed to child-headed households.

Child-headed households refer to households managed by children aged 17 years or younger. It is argued that this responsibility placed on children negates their basic rights such as; the right to family care, the right to a childhood, the right to enjoy the highest attainable standard of health, the right to education and the right to protection against all forms of abuse and negligent treatment, among others. They are thought to be one of the most vulnerable groups in society and at risk of many social and economic challenges that negatively impact them due to their age and inability to provide or access basic social amenities. This broadly perpetuates a vicious intergenerational cycle of poverty. Also, they tend to be most susceptible to hunger and disease, among many other social ills. These vulnerabilities are further heightened among children with disabilities. Moreover, poverty and a lack of access to income are key drivers of early engagement in sexual deviance, transactional sex and child marriages. Often, children have no means to meet their basic needs; a situation that forces them into these relationships in order to obtain food and other goods. In Zambia, these children often resort to begging on the streets for survival, thus increasing their risk to physical, sexual and emotional abuse.

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In any nation, land is regarded as one of the most important assets due to its insurmountable value and the power it holds in building societies that are inclusive, resilient, and sustainable. It can be a vital part of cultural and social identities, a valuable asset to stimulate economic growth, and a central component to preserving natural resources.

Land tenure refers to the relationship that individuals and groups hold with respect to land and land-based resources, such as trees, minerals, pasture, and water. Land tenure rules define the ways in which property rights to land are allocated, transferred, used or managed in a particular society. When land tenure is secure, land can be a cornerstone for economic growth and an incentive for investment, but when land rights are insecure, this can lead to conflicts, instability and the exclusion of vulnerable groups, such as women, indigenous people and the poor (USAID, 2020).

Land in Zambia is divided into state land and customary land, where state land comprises about 6% and 94% of the land is owned under customary law (Kabala, 2014).

Different land tenure systems have their advantages and disadvantages. Customary systems, which are often based on traditional, unwritten, and locally relevant rules about how to use and allocate land and resources, facilitate social cohesion, but they may not be able to withstand increasing pressure on land and resources both from within the community and from the outside (compared with statutory systems which provide written legal rules or written case law about these issues). Individual land ownership may put land to the most economically efficient use, but it may exclude disadvantaged populations, such as the poor, and limit state land management options. Public (or state) land ownership may withhold land for conservation purposes or public land management and facilitate more equal access to prime locations, but it may lead to poor land use and land management outcomes as a result of bureaucratic inactivity. For inclusive and sustainable land governance, it is important that land systems are evaluated holistically, to understand how and why decisions on land and natural resources are made, implemented and enforced in both formal and informal settings (USAID, 2020).

As is the case with most countries in Sub-Saharan Africa, land is a central means of production in Zambia, where agriculture remains a source of livelihood for most people in rural areas (Kabala, 2014). A study done by SAIRLA in 2019, reported that majority of the Zambian population depend on agriculture for all or part of their livelihoods, therefore, access to land plays an important role in eradicating poverty in Zambia.

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https://pmrczambia.com/wp-content/uploads/2020/10/Land-Tenure-and-Resource-Rights-for-Women-and-Youth.pdf

On 25th September 2020, the Minister of Finance Dr. Bwalya Ngandu delivered a K 119.6 billion budget under the theme “Stimulate Economic Recovery and Build Resilience to Safeguard Livelihoods and Protect the Vulnerable.” The 2021 budget is aimed at steering the nation towards a path of economic recovery amidst the devastating effects of the COVID-19 pandemic. This budget has been formulated amidst constrained global and domestic economy. The global economy is projected to contract by 4.9% due to the adverse effects of the COVID-19 pandemic. For Zambia, disruptions in supply chains and containment measures have had a severe impact on sectors such as tourism, construction, wholesale and retail trade as well as manufacturing. The budget outlines several cushion and intervention measures aimed at enabling sectors, SME’s and several businesses to set out on a path to recovery.

This PMRC budget analysis highlights several key aspects of the 2021 National Budget. It begins by providing an overview of global and domestic developments as well as the performance of the 2020 national budget. Further, it highlights the COVID-19 pandemic, its impact on the economy and cushion measures that were instituted by the Government to fight the pandemic. Thereafter, expenditure, revenue targets, macro economic targets and a detailed discussion of highlights under the budget context are provided.

A. Global Economic Developments

The global economy is projected to contract by 4.9% due to the adverse effects of the COVID-19 pandemic.

In Sub-Saharan Africa, economic activity is projected to contract by 3.2% from a positive out-turn of 3.1% in 2019.

Commodity prices have been volatile in 2020. For instance, during the first half of the year, copper prices averaged US$5,500 per metric tonne compared to US$6,200 in the corresponding period in 2019. Over the same period, crude oil prices averaged US$41 per barrel compared to US$66. The fall in copper and crude oil prices was mainly on account of reduced global demand. For crude oil, excess supply and lack of storage capacity exacerbated the decline in prices.

B. Domestic Economic Developments

Real GDP growth is projected at negative 4.2% in 2020, the first recession since 1998.

Almost all the sectors are expected to record negative growth. Disruptions in supply chains and containment measures have had a severe impact on sectors such as tourism, construction, wholesale and retail trade as well as manufacturing.

In addition to the effects of the COVID-19 pandemic, electricity rationing has contributed to the contraction of overall economic activity.

Read more by following the link below

https://pmrczambia.com/wp-content/uploads/2020/10/Analysis-2021-Zambia-National-Budget.pdf

Conventional and traditional medicine, therapy, treatments and surgery are the common methods used to alleviate the physical and mental symptoms of illness, disease and disabilities (Jackie Booth, 2019). However, nutrition as an important remedy for improved wellbeing especially for persons with disabilities has not fully been utilized in many cases. There is a dual link between disability and lack of nutrition; both can be a cause of the other. According to Kuper et al. (2014), undernutrition and disability are inherently linked with the former both a cause and consequence of the latter and people with disabilities are at increased risk of being malnourished.

According to the World Health Organization (WHO) and World Bank Report (2011) on disability, an estimated one billion people are living with different forms of disabilities globally of whom 93 million are children under the age of 14 years (UNICEF, 2013). These statistics represent approximately 15.6% of the world’s population with 15 years and older living with moderate or severe disability, while children 14 years and below standing at 5.1% living with disabilities. In relation to nutrition, there are almost one billion people who are malnourished and malnutrition has continued to be one of the major causes of child mortality. The latest statistics indicate that under nutrition causes about 1.3 million deaths annually, of which 45% of all deaths in children (Black RE, Victora CG, Walker SP, et al. 2013).

Globally, disability and malnutrition are not only considered to be health problems; they are also characterized as human rights problems. Article 25 of the Universal Declaration of Human Rights and the General Comments No. 12 on the right to food specifically mentions rights of people with disabilities to have physical access to adequate food (UN (1948) Universal Declaration of Human Rights). The rights to health care, education and social participation are articulated in the 2006 UN Convention on the Rights of Persons with Disabilities. It reinforces the rights of persons with disabilities to enjoy the highest standard of health without discrimination on the basis of disability and it highlights the duty of state parties to prevent discriminatory denial of health services or food on the basis of disability. Moreover, the Convention on the Right of the Child emphasises that all children, including children with disabilities, have a right to adequate nutrition.

Read more by following the link below

https://pmrczambia.com/wp-content/uploads/2020/07/Malnutrition-among-Children-with-Disabilities-Challenges-and-Opportunities-for-Zambia.pdf

The year 2020 has been premised on steering the economy to a path of resilience, development and growth amidst global challenges and the continued focus of attaining the macroeconomic objectives as set out in the 2020 National Budget. The year 2020 was projected to be a challenging year globally with negative growth in several economies. Further, the onset of the COVID-19 pandemic has drastically changed the development, governance and financial focus of several nations. Zambia, just like other nations, has had a challenging first quarter of 2020. The reality of COVID-19 among others has negatively affected several sectors of the economy and Government has had to respond with measures aimed at cushioning this effect even further. Amidst the COVID fight, there has still been progress on various fronts of policy and Governance as a whole. This PMRC Analytical review presents the status and highlights of different developments under the policy and Governance sphere. The analysis is aimed at increasing awareness on the state of affairs in different sectors. It is also aimed at ensuring that the citizens are equipped with information in order to participate effectively in the affairs of the nation.

Highlights of Economic Performance

According to the Bank of Zambia (BOZ) 2020, the global economy is projected to contract sharply to -3.0% in 2020, but recover to 5.8% in 2021 due to COVID-19.

Downside risks to global growth outlook include:

Possibility of an extended period of the COVID-19 pandemic; prolonged supply chain disruptions;

A resurgence in the US-China trade war; and

Uncertainty about the future of the UK-EU trade relationship.

Domestic Economy

Economic conditions worsened in the first quarter of 2020, with the volume of services, new orders and profitability all affected BOZ (2020).

With the COVID-19 pandemic, the domestic macroeconomic environment has been negatively affected. BOZ (2020) projects that the economy may contract by 2.6% in 2020, the lowest in 20 years, from a growth of 1.9% in 2019; and

Underlying this outlook is the projected contraction of output in tourism, wholesale and retail trade, construction, manufacturing, mining as well as electricity sectors.

Inflationary pressures persisted in the first quarter of 2020 driven by increases in retail fuel pump prices and electricity tariffs, the pass-through from the sharp depreciation of the Kwacha against the US dollar, and the rise in food prices.

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https://pmrczambia.com/wp-content/uploads/2020/07/PMRC-Governance-Series-2020-1st-Quarter-Governance-and-Policy-Review.pdf

Poverty is a socioeconomic ill that has continued to affect a significant portion of the population in Zambia. About half of the population currently lives below the poverty line (US$1.09) while 40.8 percent are unable to meet daily basic needs such as food. The situation is even worse in rural areas where an estimated 76.6 percent are classified as poor (7NDP).

The concept of poverty is portrayed in two main aspects namely; relative and absolute poverty. Absolute poverty is a condition characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information (United Nations, 1995). Relative poverty refers to an individual or groups’ lack of resources when compared with that of other members of the society (Scott, 1994). Social protection is viewed as one of the key solutions to poverty reduction. Social protection can be “defined as a broad range of activities (policies and programs), which aim to protect and promote the welfare and livelihoods of the poorest and of those most vulnerable to risks and shocks in society (UNICEF, 2014).

The Ministry of Community Development and Social Services under the Department of Social Welfare expedites Government’s social protection programs with the assistance of various development partners, Civil Society Organization (CSO’s), Faith Based Organizations (FBO’s), Non- Governmental Organizations (NGO’s) and other stakeholders. The Social Cash Transfer is a component of the Social Protection mechanism which seeks to reduce the vulnerability of low-income households with regard to consumption and access to basic services, among others.

The cash transfer scheme aims to assist the most destitute and incapacitated households in society to meet their basic needs, particularly health, education, food and shelter. The Scheme is a response to the HIV and AIDS Pandemic, which had led to a growing number of households with no adult breadwinner and to households headed by elderly persons, children and chronically ill persons. The scheme is an alternative to the in-kind assistance offered through community structures and tries to respond to the growing number of poor and vulnerable households (Ministry of Community Development and Social Services, 2019).

Read more by following the link below

https://pmrczambia.com/wp-content/uploads/2020/06/Report-of-the-Auditor-General-on-the-Social-Cash-Transfer-in-Zambia-for-the-Period-2014-to-2017-PMRC-Analysis.pdf

The connection between women’s economic participation and development can not be overemphasized. Decades of research from the International Monetary Fund, Organisation for Economic Cooperation and Development, the World Economic Forum, and other leading organizations confirms that women’s participation in the labour force is critical to economic growth. Yet, despite this evidence, a range of legal barriers inhibiting women’s full and equal economic participation remains on the books in countries around the world. (Vogelstein, Council on Foreign Relations, 2016).

Women around the world, face other challenges that go way beyond obtaining equal pay for equal work. They also have to overcome hurdles with regard to political representation, property acquisition, access to education and health facilities etc. The economic participation and opportunity gap remains the headline gender disparity as it is expected to be the second-slowest gap to close. This projection was highlighted in the 2017 World Economic Forum’s report which was premised on the current rate of progress over the past decade by issue and region.

“….economic participation and opportunity has a 41.9% gender gap that remains to be closed. This is way above the average gender gap that stands at 32%. The current gap is evident that more needs to be done to enhance women’s economic participation and opportunity. It is for this reason that this briefing document seeks to highlight strategies aimed at enhancing women’s economic participation and opportunity…” (According to the 2018 Global Gender Gap report).

DIMENSIONS OF WOMEN’S ECONOMIC PARTICIPATION AND OPPORTUNITY

Women’s economic participation and opportunity contains three concepts: the participation gap, the remuneration gap and the advancement gap. The participation gap is captured using the difference between women and men in labour force participation rates. The remuneration gap is captured through a hard data indicator (ratio of estimated female-to-male earned income) and a qualitative indicator gathered through the World Economic Forum’s annual Executive Opinion Survey (wage equality for similar work). Finally, the gap between the advancement of women and men is captured through two hard data statistics; the ratio of women to men among legislators, senior officials and managers, and the ratio of women to men among technical and professional workers (World Economic Forum, 2018)

Read more by following the link below

https://pmrczambia.com/wp-content/uploads/2020/04/Social-Protection-Series-Enhancing-Women%E2%80%99s-Economic-Participation-and-Opportunity-Briefing-Document.pdf

Approximately 50% of adults in rural areas are unbanked or have no access to financial services. Access to financial services has been a challenge due to various reasons, which among others include low population density in rural areas and extremely poor infrastructure, compounded by low productivity, making it difficult and expensive to provide such services. The importance of increasing access to financial services cannot be overemphasized because of the key role it plays in reducing poverty, increasing employment and attracting development. This can consequently help to bridge the rural-urban economic divide with 77% of poor people in rural areas compared to only 23% in urban areas.

This paper is aimed at analyzing the Rural Finance Policy and Strategy of 2012, a key policy document aimed at promoting access to financial services in rural areas and thereby reducing vulnerability and promoting prosperity of the rural population. The paper also analyzed other policy statements on rural finance. Implementation gaps were identified and recommendations were proposed thereafter. The paper relied on desk reviews and key informant interviews with stakeholders involved in rural financing.

At a macro level, the Rural Finance Policy and Strategy of 2012, has been criticized. The emphasis should be given to provision of support through subsidies/incentives to financial providers offering services in rural areas where it may be difficult to operate and make profit. Since the policy was launched very little has been done regarding the review of the financial landscape in Zambia particularly the development of a functional incentive system for existing financial players.

At meso level, it has been realized that the provision of supply and demand side market information about rural financial services, which is key in decision making for financial players is not coordinated or nonexistent. For examples, farmers who demand financial services in rural areas have in some studies indicated that the provision of such services is absent.

The Rural Finance Unit at the Ministry of Finance has not been so effective in leading the role of financial inclusion. Particularly due to constraints ranging from fiscal to staffing. Though notable successes have been registered in the overall financial inclusion status for the country, the Government needs to upscale efforts to provide rural financial services by focusing on support towards good product design, development and delivery that meet the needs of the large rural market segment.

Read more by following the link below

https://pmrczambia.com/wp-content/uploads/2020/01/Analysis-of-Rural-Finance-Policy-and-Strategy-Implementation-1-1.pdf

The commitment of the current Government in promoting gender equity in its National Development Agenda is evident from the concrete steps taken by the leadership in ensuring ‘no one is left behind’ and expresses the conviction that boys and girls, men and women should benefit equally from development in Zambia. This has been demonstrated to a large extent by Government’s strong will and commitment to empowering women and the youth into high positions of responsibility in the public sector and the support provided to those in the private sector. It believes women are key stakeholders in decision making. They play a huge role in providing unique perspectives into various issues that not only impact their socio-economic spheres at individual level, but also at community and national development level. Women’s participation in the overall national development agenda should be viewed as not only a fundamental human right, but also as a marker of good governance. In spite of this, gender power dynamics still shape many parts of society. Globally, women continue to be under-represented in the formulation of national policies as well as in the political and economic decision-making spheres (Domingo et al., 2015). According to Cliveti et al. (2005) the equal participation of men and women in decision making is a precondition of a functional democracy. Therefore, securing the interests of women in policy formulation is a political issue that requires a political process. One way of enhancing women’s voices is through political participation and electoral reform. Increasing the space women occupy in politics could provide them a platform to influence decision-making and give them a greater voice.

Participation refers to the extent to which one’s voice is heard, respected and applied in decision-making, planning, implementation and monitoring of actions (FAO, 2014). Therefore, a high presence of women may not translate into their full participation or mean that their concerns have been taken into consideration. Thus, it is necessary to assess the extent to which their voices are heard and applied as numbers alone may not yield positive change. Undermining women’s voices could lower levels of participation in policy formulation even further. Hence, it is important to take into consideration the factors that impede women’s participation. These factors can be intersectional in nature and recognizing how they influence each other is vital in addressing participation levels. These could include the education levels of women, their physical ability, age, culture, religion, sexual orientation, location and socio-economic class among others.

Read more by following the link below

https://pmrczambia.com/wp-content/uploads/2020/02/Assessing-Levels-of-Participation-among-Women-in-Policy-Formulation-1.pdf

Zambia has been pursuing economic diversification ever since the first republic and copper mining has been the major forex earner for the country with notable fluctuating trends over the years. As early as the First National Development Plan (1966-1970), both the need to diversify away from copper, as well as the growth of other sectors such as agriculture and manufacturing, were emphasized. However, the Zambian Government has been undertaking economic diversification to reduce the country’s reliance on copper exports and exploit other sectors of Zambia’s rich resource base by promoting Agriculture, Tourism, Gemstone Mining and Hydro Power generation1.Economic diversification is the process of shifting an economy away from a single income source toward multiple sources from a growing range of sectors and markets. Traditionally, it has been applied as a strategy to encourage positive economic growth and development. Economic diversification is inextricably linked with economic development and poverty reduction2. Economic diversification is widely seen as a positive trade objective in sustaining economic growth. It makes countries less vulnerable to adverse terms of trade shocks by stabilizing export revenues. It also fosters knowledge spillovers and increases returns to scale, which in turn creates learning opportunities that lead to new forms of comparative advantage. Empirical evidence shows that greater diversification is correlated with more rapid growth of per capita income3.

This PMRC briefing document assesses the prospects for Economic Diversification in Agriculture, Tourism, Energy and Manufacturing. This aims to build towards a successful diversification strategy that would stimulate growth in these sectors and further promote realization of our national aspirations.

Read more by following the link below

https://pmrczambia.com/wp-content/uploads/2020/01/Economic-Diversification-in-Zambia-Are-we-getting-there-Assessing-the-Prospects-for-Economic-Diversification-in-Zambia-.pdf

Statistics from the Living Conditions Monitoring Survey of 2015 show that over 50% of the population live below the poverty line. This vulnerable population does not have sufficient capacity to cope with, or adapt to the impacts of extreme weather events. One of major contributors to extreme weather patterns has been deforestation. The country’s forest cover has been lost due to massive deforestations with losses in excess of 79,000 hectares of forest cover per annum (Integrated Land Use Assessment Report, 2016).

To effectively cope with climate change, there is need to develop adaptation and mitigative measures to address climate change. At the national level, Government has developed national strategies and attempted to domesticate some international interventions. Key among the several noticeable strategies include the following; Climate Change Policy (2016); The Zambia’s National Climate Change Response Strategy (2010); National Policy on Environment (2009), National Strategy for Reducing Emissions from Deforestation and Forest Degradation (REDD+) 2015, among others.

At a global level Zambia is a signatory to the Paris Climate Change Agreement through the United Nations Framework Convention on Climate Change (UNFCCC) where countries have committed themselves to implement ambitious efforts to combat climate change and adapt to its effects while promoting sustainable development.

Read more by following the link below

https://pmrczambia.com/wp-content/uploads/2020/04/Climate-Smart-Agriculture-Strategies-for-Zambia-Analysis-of-Policies-and-Programmes.pdf

PARLIAMENTARY COMMITTEE PRESENTATIONS

1. The PMRC team appeared before the Parliamentary Committee on Legal Affairs, Human Rights, National Guidance, Gender Matters and Governance. PMRC presented on the African Peer Review Mechanism (APRM): The Case of Zambia.

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https://pmrczambia.com/wp-content/uploads/2020/01/Parliamentary-Submission-APRM-review-.pdf

2. The PMRC team appeared before the Expanded Parliamentary Committee on Budget Estimates and submitted on the 2021 National Budget under the theme “ Stimulate Economic Recovery and Build Resilience to Safeguard Livelihoods and Protect the Vulnerable”.

3. The PMRC Team, appeared before the Parliamentary Committee on Budget Estimates and presented on the 2020 National Budget First Quarter Performance.

4. The PMRC Team appeared before the Parliamentary Committee on Cabinet Affairs and submitted on the Performance Audit of Government’s Preparedness to Implement the Sustainable Development Goals (SDGs).

5. The PMRC team, appeared before the Expanded Parliamentary Committee on Budgets and presented on the 2020 Zambia National Budget under the theme: “Focusing National Priorities Towards Stimulating the Domestic Economy.”

6. The PMRC team, appeared before the Parliamentary Committee on Health, Community Development and Social Services and presented on “The Growing Demand for Specialized Medical Treatments by Patients Abroad: Challenges and Opportunities for Health.”

7. The PMRC Team, appeared before the Parliamentary Committee on Local Government Accounts and presented on the Revenue Mobilization and Utilization in Local Authorities.

PUBLIC ENGAGEMENTS

The Policy Monitoring and Research Centre (PMRC) launched a study titled “Malnutrition Among Children with Disabilities: Challenges and Opportunities for Zambia. The event was graced by Minister of Community Development and Social Services, Hon Kampamba Mulenga-Chewe.

PMRC translated the following publications into Braille:

Malnutrition Among Children with Disabilities: Challenges and Opportunities for Zambia.
Seventh National Development Plan infographic.
Importance of Mindset Shift in the Implementation of the Seventh National Development Plan.
Empowering Persons with Disabilities; Assessing Implementation of the National Policy on Disability.
The following organisations received Braille Publications:

Zambia Agency for Persons with Disabilities.
Zambia Institute of Special Education .
Zambia Library Cultural and Skills Centre.

PMRC Executive Director Mrs. Bernadette Deka-Zulu, spoke during the Mulungushi University Inaugural Academic Conference under the theme: Impact of Socio-economic Reforms on Sustainable Development. Quo Vadis?

Mrs. Zulu presented on Factors Leading to Ineffectiveness of SOE’s – Public Enterprises in Zambia

Other keynote speakers included; Prof. Hellicy C. Ng’ambi, Prof. Bizeck Jube Phiri, Prof. Kasanda Sichalwe, Prof. Kavwanga E.S. Yambayamba, Dr. Dennis Banda, Dr. Lubinda Habazooka, and Mr. James Phiri.

PMRC LIVE Discussion Forum (Part One)

The Policy Monitoring and Research Centre (PMRC) hosted the 2020 Live Discussion Forum under the theme Zambia’s Post COVID Economic Recovery: “A Focus on the Tourism, Mining, Agriculture, Education and Health Sectors”.

PMRC LIVE Discussion Forum (Part Two)

The Policy Monitoring and Research Centre (PMRC) hosted the 2020 Live Discussion Forum (Part two) under the theme Zambia’s Post COVID-19 Economic Recovery: “Enhancing Prospects in Manufacturing and the Role of SMEs”.

PMRC Executive Director Mrs. Bernadette Deka-Zulu and team met with Pilot Programme for Climate Resilience (PPCR) National Coordinator Mrs. Chitembo Chunga to discuss Climate Change Mitigation and Adaptation.

The long-term objective of the PPCR is to mainstream climate change into the most economically vulnerable but viable sectors of the economy in order to ensure sustainable economic development and contribution towards the attainment of Zambia’s Vision 2030.

A team from the Ministry of National Development Planning led by Assistant Director (Economic Sectors), Ms Mwila Mukosa Daka paid a courtesy call on Policy Monitoring & Research Centre (PMRC) Executive Director, Mrs Benardette Deka-Zulu and her team. The two institutions agreed to further strengthen their collaboration in areas of policy analysis and economic research.

Permanent Secretary in the Ministry of National Development Planning Mr Chola Chabala paid a courtesy call on PMRC Executive Director Mrs Bernadette Deka-Zulu and her team after a joint consultative meeting at the Ministry of National Development Planning.

PMRC Head of Research and Analysis Mr. Salim Kaunda and Head of Communication & Grants Ms. Melody Simukali met with University of Zambia Economics Association (UNZABECA) executive to discuss possible areas of collaboration this year.

A team from the Ministry of National Development Planning led by Assistant Director (Economic Sectors), Ms Mwila Mukosa Daka paid a courtesy call on Policy Monitoring & Research Centre (PMRC) Executive Director, Mrs Benardette Deka-Zulu and her team. The two institutions agreed to further strengthen their collaboration in areas of policy analysis and economic research.

PMRC Executive Director Mrs. Bernadette Zulu and team met with Consumer Unity and Trust Society International (CUTS) Centre Coordinator Ms Chenai Mukumba and team to discuss joint activities for this year. In 2018 the two institutions signed a Memorandum of Understanding (MOU) for collaboration in Joint Research, Policy Analysis, Information Dissemination and Joint Stakeholders Event Hosting.

Zambia’s newly established State-Owned Enterprise (SOE) Infratel paid a courtesy call on PMRC. In the picture are the Infratel Chief Executive Officer Mr. Freelance Bwalya, PMRC Executive Director Mrs. Bernadette Deka-Zulu, Assistant Manager Data Centre Services Mr. Michael Likando, Infratel Sales Executive Pamela Hyde, PMRC Head of Research & Analysis Mr. Salim Kaunda, PMRC Head of Monitoring and Evaluation Mr. Salim Kaunda, Head Communication and Grants Ms. Melody Simukali.

PMRC Executive Director Mrs. Bernadette Deka-Zulu and team met with OYDC Chief Executive Officer – Dr. Fredrick Chitangala and Consultant Mr. Sombwa Munsunsa to discuss areas of collaboration on various roles that sport plays in promoting national development.

Mr. Lai Bo, Counselor of the Chinese Embassy to Zambia called on PMRC Executive Director, Mrs Bernadette Deka-Zulu to discuss collaboration themes for the year 2020.

The Chinese Embassy Officer in charge of political affairs was also attendance.

Mrs Zulu was accompanied by Head of Monitoring & Evaluation – Mr. Akabondo Kabechani, Head Communication & Grants-Ms Melody Simukali and Senior Researcher-Mr. Albert Kasoma.

Mrs Bernadette Deka-Zulu addressed adolescent girls gathered from different schools in Lusaka under the DREAMS, a PEPFER-USAID supported the initiative, spearheaded by PACT-Zambia.

Researcher Leya Namonje Tembo presented on the measures to improve internal controls and recommendations to enhance public accountability in Zambia. PMRC remains committed to working with the Office of the Auditor-General as well as other Agencies to promote public accountability and transparency.

PMRC CARTOONS

INFOGRAPHICS

1. 2021 National Budget: Theme “Stimulate Economic Recovery and Build Resilience to Safeguard Livelihoods and Protect the Vulnerable.”

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2. Official Opening of the Fifth Session of the National Assembly (Part One)

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3. Official Opening of the Fifth Session of the National Assembly (Part Two)

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https://pmrczambia.com/wp-content/uploads/2020/09/Official-Opening-Of-The-Fifth-Session-Of-The-Twelfth-National-Assembly-Infographic_2020-Part-Two.pdf

4. Ministerial Statement on the Performance of the Economy Amid the COVID-19 Pandemic By Honourable Minister of Finance, Dr. Bwalya K.E Ng’andu

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https://pmrczambia.com/wp-content/uploads/2020/07/Ministerial-Statement-on-the-Performanc-e-of-the-Economy-Amid-the-COVID-19-Pandemic-By-Honourable-Minister-of-Finance-Dr.-Bwalya-K.E-Ng%E2%80%99andu-Infographic.pdf

5. The Continental Free Trade Area

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https://pmrczambia.com/wp-content/uploads/2020/09/The-Continental-Free-Trade-Area-CFTA-Infographic.pdf

6. Report of the Auditor General of the Social Cash Transfer for the Period 2014 to 2017

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https://pmrczambia.com/wp-content/uploads/2020/09/Report-of-the-Auditor-General-on-the-Social-Cash-Transfer-in-Zambia-for-the-Period-2014-to-2017-Infographic.pdf

7. Taxation in Zambia

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https://pmrczambia.com/wp-content/uploads/2020/08/Taxation-in-Zambia-Infographic.pdf

8. State of Financial Inclusion in Zambia

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https://pmrczambia.com/wp-content/uploads/2020/07/State-of-Rural-Finance-in-Zambia-Infographic.pdf

9. Disability Among Children in Zambia: Challenges and Opportunities for Improved Nutrition

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https://pmrczambia.com/wp-content/uploads/2020/07/Disability-Among-Children-in-Zambia-Challenges-and-Opportunities-for-Improved-Nutrition-Infographic.pdf

10. Enhancing Women’s Economic Participation

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11. The Impact of Savings Groups in Uplifting the Lives of Rural Women.

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https://pmrczambia.com/wp-content/uploads/2020/06/The-Impact-Of-Savings-Groups-In-Uplifting-The-Lives-Of-Rural-Women-Infographic.pdf

12. 2020 National Budget 1st Quarter Performance Infographic

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https://pmrczambia.com/wp-content/uploads/2020/05/2020-National-Budget-1st-Quarter-Performance-Infographic.pdf

13. Third National Address on COVID-19 by His Excellency, Dr. Edgar Chagwa Lungu, President of The Republic of Zambia

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https://pmrczambia.com/wp-content/uploads/2020/05/Third-National-Address-on-COVID-19-Inforgraphic-.pdf

14. Measures Aimed At Mitigating The Impact Of The Coronavirus (COVID-19) On The Zambian Economy – Infographic

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https://pmrczambia.com/wp-content/uploads/2020/05/Measures-Aimed-At-Mitigating-The-Impact-Of-The-Coronavirus-Covid-19-On-The-Zambian-Economy-Infographic.pdf

15. Assessing Levels of Participation Among Women in Policy Formulation

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https://pmrczambia.com/wp-content/uploads/2020/02/Assessing-Levels-of-Participation-among-Women-in-Policy-Formulation-Infographic.pdf

16. Mainstreaming of Climate Smart Agriculture In Zambia’s Policies

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https://pmrczambia.com/wp-content/uploads/2020/03/Mainstreaming-of-Climate-Smart-Agriculture-in-Zambia%E2%80%99s-Policies-Infographic.pdf

17. Status of Primary Education in Zambia

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https://pmrczambia.com/wp-content/uploads/2020/02/Status-of-primary-education-in-Zambia-Inforgraphic.pdf

PMRC CORPRATE SOCIAL RESPONSIBILITY

PMRC team, led by Executive Director Bernadette Deka-Zulu on 15th October 2020 visited Home of Happiness for Children with Disabilities to paint, motivate and encourage children as our Corporate Social Responsibility (CSR) engagement. The team also donated paint and blankets for the children as a contribution to the maintenance and improvement of the orphanage.

The team also visited Hill Transit Home and donated blankets for the children.

As part of our CSR, we always endeavour to give back to the communities and make meaningful differences in the lives of citizens. PMRC chooses schools/orphanages that need help because we believe that every child should have the right to a clean and comfortable environment, and this is indeed a platform for “Unlocking Zambia’s Potential”.

Mrs. Bernadette Deka-Zulu – PMRC Executive Director

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https://pmrczambia.com/wp-content/uploads/2020/12/PMRC-Newsletters-January-December-2020-Final-.pdf