Republic of Zambia STATEMENT BY MRS. ESNART C. MPOKOSA- NATIONAL FOCAL POINT ON THE IMPLEMENTATION OF THE ISTANBUL PROGRAMME OF ACTION AT NATIONAL LEVEL JULY, 2013 Ministry of Finance P. O. Box 50062 Lusaka ZAMBIA
Let me take this opportunity to thank the Office of the High Representative for the Least Developed Countries (LDCs), Landlocked Developing Countries (LLDCs) and Small Island Developing State (SIDS) for organizing this workshop which is gives us an opportunity to share the experiences and learn from each other on how we can accelerate the implementation of the Istanbul Programme of Action. Zambia supports the call to promote the implementation of the Istanbul Programme of Action (2011-2020) in its eight priority areas namely: productive capacity, agriculture, food security and rural development, trade, commodities, human and social development, multiple crises and other emerging challenges, capacity building and good governance at all levels. These eight priority areas suit in very well with Zambia s development agenda which seeks to sustain its economic growth and reduce poverty. Zambia, as an LDC, has been implementing development policies aimed at sustaining its economic growth and reducing the high poverty levels as guided by its national vision of becoming a prosperous middle income country by 2030. The national vision is operationalized by five year national development plans and the annual budgets. The implementation of the development programmes takes cognizance the priority areas of the IPoA as well as other international initiatives such as the Millennium Development Goals (MDGs). For the period 2011-2015, Zambia s development agenda is guided by the Sixth National Development Plan whose strategic focus is Infrastructure and Human Development. The main thrust of the plan is to accelerate and sustain economic growth, diversify the economy and reduce poverty by addressing the challenges of realizing broad-based pro-poor growth, improve quality human capital, generate full and productive employment and decent work for all, particularly for the youths and women and promote rural development. In order to promote accelerated and balanced growth, investments are targeted towards growth sectors of agriculture, energy, tourism, manufacturing, commerce and trade. Further, emphasis is also placed on improving the quality human capital through skills development, improving labour quality
productivity, increasing access to quality health and higher and tertiary education as well as facilitating the distribution of skilled labour within and across sectors throughout the country. Generally, Zambia has been making steady progress towards achieving the IPoA objectives through implementation of various developmental programmes. During 2012, the country registered a growth rate of 7.3 percent, which is 0.3 percentage points higher than the IPoA's target of 7.0 percent per annum. The country s positive growth was largely driven by agriculture, manufacturing, construction, transport and communication and commerce and trade sectors. Infrastructure development is one of Government s priority areas in the next five years as stipulated in the Sixth National Development Plan. It is in this regard that Zambia, in 2012, went to the international capital market to raise funds by issuing an inaugural 10 year Eurobond amounting to US$750 million to finance infrastructure development in the energy, road and rail infrastructure among others. This is in an effort to facilitate viable business environment and increased economic competitiveness. The transport and communications sector recorded a growth of 12.8 percent in 2012. The Transport sector, particularly the road transport has bolstered by increased funding for various road projects such as Link Zambia and Pave Zambia, which are a continuous programme. As a land-linked country, Zambia has continued to record a rise in international flight operators. Zambia has continued with the expansion programme of international airports. The rail sub-sector, however did not perform to expectation due to poor infrastructure and capacity challenges. In this regard, poor performance of the rail system continued to put pressure on the country s road network resulting in huge repair and maintenance costs for Government. At regional level, Zambia has continued to collaborate with its neighbouring countries in developing infrastructure thereby promoting trade and increasing revenues for countries in the Southern African Development Community (SADC). The Chirundu One Stop Border facility which is the first functioning One Stop Border Post in Africa is one such example of integrated regional development. Its opening has led to significant improvement in traffic flows
between Zambia and Zimbabwe as well as the reduction in the cost of doing business through the reduction in delays and enhanced efficiency at the Border. Regarding Information, Communication and Technology (ICT), Zambia places high priority in usage of ICT applications for sustainable socio-economic development, including implementation of e-governance-learning-healthcommerce. It also acknowledges that ICT stimulates the business environment and reduces the cost of doing business. In this regard, Government is striving to improve the legislative environment in ICT with a view to extending ICT infrastructure and services to the largely un-served, peri-urban and rural areas. Regarding energy promotion, a number of policies have been adopted to guide the development of the sector in order to ensure adequate and reliable supply of energy. These include the Energy Policy, the Power Systems Development Master Plan and the Rural Electrification Master Plan. In an effort to ensure that provision of electricity from the point of generation to supply to the customers is done efficiently, reliably and safely, government embarked on putting up the optic fiber network. This was to also improve Information Communication Technology for the citizens and derive revenue for re-investment to increase electricity generation capacity. With regard to petroleum, Strategic Petroleum Reserve Depots are being built in strategic areas to enhance fuel distribution system. However, the sector continued to face the challenge of meeting the country s electricity demands due to interruption in power supply which is constrained by generation, transmission and distribution capacity. The mining sector continued to be the largest consumer of electricity at 54.8 percent while household consumption continued to be low with rural areas consuming only 3.5 percent. In the petroleum sub-sector, the major challenge was that of distributing petroleum products to remote areas by Oil Marketing Companies.
The mining sector remains the economic backbone of the country and continues to contribute significantly to the country s economic growth. It accounts for over 80 percent of all exports. The performance of the sector generally improved despite registering a slowdown in mining activities which saw copper production declining by 5.4 percent from 819,574Mt in 2011 to 785,642Mt in 2012. The reduction was attributed to the 42% decline in copper production by small scale miners. On the other hand large scale mining operations increased by 4.5 percent due to major investments in both existing and new mines. In order to maximize the socio-economic benefits from the mining sector, emphasis has been placed on value addition, safety, and safe-guarding the environment. In recognition of the importance of the financial sector in enhancing economic diversification and sustainable growth, the country continued to implement reforms under the second phase of the Financial Sector Development Programme (FSDP) with the objective of addressing weaknesses in the increasing access to finance, enhancing market infrastructure and increasing competition. As a result, an increase was recorded in access to financial institutions by 13.3 percent due to rise in the number of branches of commercial banks by 57. Other reforms in the review period were modernization and harmonization of the financial sector laws and the launch of the national strategy for financial education aimed at enhancing financial literacy. The agriculture sector is the largest employer accounting for about 67 percent of the available total labour force and provides a livelihood to 85 percent of the rural population. This population which consists of mostly small and medium scale farmers and women is the major contributor to Zambia s food security and nutrition at both household and national level. The sector registered a growth of 7.7 percent and contributed 19.4 percent of GDP in 2012. Generally, area planted improved for all major crops while livestock population registered an increase of 2.7 percent. Notwithstanding the improved performance, the major challenge the country faces is low agricultural production and productivity partly due to declining soil
fertility as a result of applying inappropriate farming methods and adverse effects of climate variability and change. Other challenges include high dependence on rain-fed agriculture which poses the threat of droughts and floods thus limiting the ability to increase food production; low investments in technology; lack of crop diversification; persistent livestock diseases; limited access to extension services, research, and credit by rural populations as well as poor infrastructure in rural areas to facilitate market access by small scale farmers. In an effort to address the above challenges, Zambia has been working towards improving food security by empowering small scale farmers through programmes such as the Farmer Input Support Programme. Further, the country is implementing an adaptation to drought and climate change project aimed at improving food security by facilitating technologies which enhance the adaptive capacity of farmers to respond to the adverse effects of climate variability and change. Other efforts include crop diversification, promotion of rural industrialization so as to encourage on-site agro processing in agricultural sites and increased financing for rural development. Over the past decade, Zambia has pursued liberal trade policy in order to promote economic diversification and generate export-led growth. Focus is on promoting value addition of locally produced goods for increased domestic and foreign market earnings. Zambia s trade has been dominated by the traditional export such as copper and cobalt which accounted for about 80 percent of total export earnings. However, non-traditional exports have been increasing. As a single commodity (copper) dependent economy, Zambia s economic wellbeing is vulnerable to external shocks owing to volatility of commodity prices. Export diversification towards increasing non-traditional exports so as to broaden the economic base is key in reducing dependence on one commodity. The country needs to tap into and fully exploit productive potential of other economic resources such as agriculture. Further, the country needs to take advantage of its strategic location as a land-linked nation and the yawning regional market to promote trading in non-traditional goods. Zambia considers human resources development as key to socio-economic, political and cultural development and recognizes the importance of quality human capital. However, the low quality of human capital remains a concern
and is perpetuated by scarcity of manpower and limited access to higher and tertiary education. Additionally, the existing supply of skills does not adequately meet the demand in the labour market. In addressing issues of social development, Zambia has put in place social protection systems that address and reduce inequality and social exclusion. In line with MDGs, the country has made substantial progress in ensuring that social protection systems work for the most vulnerable including women through interventions such as: Decent Work Programme, Social Cash Transfer, Food Security Pack Programme, Child protection, sexual and gender based violence and empowerment of women and persons with disabilities. The developments in the global economy especially the Euro financial and economic crisis has posed some risk to Zambia s economy, though the impact has been minimal. The country continued to show some resilience to external shocks as can be evidenced by its economic growth which stood at 7.2 percent as at December, 2012. Government will continue with efforts to diversify the economy away from copper dependence by sustaining growth in agriculture, construction, manufacturing, transport and communications sectors. The continued implementation of a prudent monetary policy, will also improve resilience to external shocks. With regards to climate change and risk reduction, a number of measures have been undertaken to mainstream climate change adaptive measures in infrastructure, agriculture, energy, water and sanitation, transport and communications. Improvement of the country s early warning systems is one of the key measures the country is undertaking to increase risk preparedness. Regarding mobilizing financial resources for development and capacity building, the country s performance was positive with domestic revenues standing at 20.6 percent of GDP, above the target of 17 percent in 2011. However, grants from Cooperating Partners continued to underperform and were below target by 55.0 percent. In response, Government has adopted new measures of external resource mobilization, among them, the Euro bond which has improved the country s financing for development. Regarding, issues of good governance, the government has undertaken a number of reforms to enhance democratization, promote human rights and the
rule of law, and increase transparency and accountability in the management of public affairs. The reforms have included enhancement of the Public Financial Management (PFM) systems to increase transparency and accountability of public funds; implementation of the Public Service Reform Programme (PSRP) and reviewing of the Decentralization Policy to increase efficiency in public service delivery and strengthening of the fight against corruption through institutional strengthening and implementation of the Anti Corruption policy. The country is also undertaking Constitutional review and has continued to invest in strengthening Justice Institutions in a bid to enhance democracy and the rule of law. Zambia s economic performance has so far been good and this is mainly attributed to the implementation of the policies that aim at transforming the country into a prosperous middle income country. Despite this achievement, the country needs to undertake new actions to sustain the positive growth and reduce poverty. Actions to be undertaken include: 4.1 Improving incentives in agriculture, tourism and manufacturing sectors to enhance the competitiveness of the sectors 4.2 Investing in research and development in the key economic sectors to improve diversification and enhance standards. 4.3 Improve rural infrastructure to promote rural development 4.4 Establish new financing avenues for rural development 4.5 There is also need to address high illiteracy levels. Research has shown that an educated population is likely to be more food secure compared to an uneducated one. In conclusion, Zambia remains committed to ensuring that there is sustainable and inclusive economic growth that will enable it graduate from being LDCs before 2020. I thank you.