Trade and Economy

Overview

Zambia has recorded several favourable macroeconomic indicators for over a decade. The average Gross Domestic Product (GDP) growth rate of 6 percent has been anchored by good performance in the mining, agriculture, manufacturing, services and construction sectors. During this period, the country's average GDP growth rate has also been generally higher than that achieved in the sub-Saharan Africa (SSA) region. In addition, the country attained the lower middle income status in 2010 and by 2015 its per capita GDP had reached US$1, 800.

Regarding foreign direct investment, inflows into Zambia rose from US$ 72 million in 2008 to a high of US$ 2,100 million in 2013, before reducing to US$ 1,300 million in 2014. In 2014 and first half of 2015, international prices of primary commodities were generally low, which temporarily affected the country's export earnings and some macroeconomic indicators. By June 2016, Zambia had a total of US$1.8 billion in investment pledges across various economic sectors over the preceding six months. The energy sector registered the highest amount of the pledged investments, followed by the agriculture and the manufacturing. This represents an increase of 20%, compared with the US$1.5 billion investment pledges recorded in the first half of 2015.

It should also be noted that as a result of Zambia's business environment reforms, the country is now ranked 8th in Africa, 5th in the Southern African Development Community (SADC) and 4th in the Common Market for Eastern and Southern Africa (COMASA) in terms of the ease of doing business. Furthermore, Zambia is ranked the 8th most competitive country in Africa on the Global Competitiveness Index. Recently, Zambia was ranked 7th by Forbes as the best country for doing business among 54 African countries.

In the area of trade, Zambia recorded a positive trade balance of US$ 300.6 million in 2014, as well as an increase in non-traditional exports (NTEs) over the years from US$ 1,381.8million in 2010 to USD 3,550.3 million in 2013. Copper and cobalt are among Zambia's main exports while non-traditional exports include cotton, coffee, fresh flowers, burley tobacco, gemstones and maize (corn) among others.
Zambia is also eligible to export duty-free goods to the United States under the African Growth and Opportunity Act (AGOA). The Act allows eligible countries from sub-Saharan Africa to export over 6,400 goods to the U.S.

The Vision 2030

The Zambian people aspirations and vision is to make the country a prosperous Middle Income Nation by 2030. It is in this regard that the Zambian Government came up with a national long term plan known as the Vision 2030 which long term development policy scenarios at different points for the next 20 years.
The Vision is being operationalised through the five year developments plans and annual budgets.

The socio-economic development objectives enshrined in the Vision 2030 are to: attain and sustain annual real growth of 6 percent (2006-2010); 8 percent (2011-2015); 9 percent (2016-2020); and 10 percent between 2021 and 2030. Other objectives include to attain and maintain a moderate inflation rate of 5 percent; to reduce national poverty head count to less than 20 percent of the population to reduce income inequalities measured Gini-coefficient of less than 40 percent; to provide secure access to safe water and improved sanitation facilities of 100 percent of the population across the country; to attain education for all; and to provide equitable access to quality health care to all by 2030.

The Eighth National Development Plan (8NDP)

The Eighth National Development Plan (8NDP) sets out Zambia’s strategic direction in terms of the development priorities and implementation strategies for the period 2022 to 2026. This Plan is a successor to the Seventh National Development Plan (7NDP) that was implemented over the period 2017 to 2021. This is the fourth in the series of national development plans (NDPs) towards the national Vision 2030 in which Zambians aspire to live in a prosperous middle-income country. As the penultimate plan, the 8NDP will play a pivotal role as a building block towards the attainment of the national vision. The Plan is a critical vehicle to support the attainment of Zambia’s international and regional commitments under various frameworks, including the last decade of action towards the realization of the Sustainable Development Goals (SDGs) and delivery on the Africa We Want, espoused in the African Union Agenda 2063.

Others are the Southern African Development Community (SADC) Regional Indicative Strategic Development Plan (RISDP) and the Common Market for Eastern and Southern Africa (COMESA) protocols. These frameworks have helped in the formulation of the 8NDP. The 8NDP takes cognizance of the country’s developmental context including the challenges and opportunities towards actualizing the Vision 2030. Notably, the Plan has been formulated against the backdrop of a challenging economic situation exacerbated by the COVID-19 pandemic.

The current state of development indicates persisting socio-economic challenges which include low diversification of the economy, high youth unemployment, high incidences of poverty and inequality, slow pace of decentralization, as well as low education outcomes, coupled with inadequate access to other social services. To overcome these challenges and attain the Vision 2030, the 8NDP introduces strategic interventions anchored on:

• Economic Transformation and Job Creation;
• Human and Social Development;
• Environmental Sustainability; and
• Good Governance Environment.

The strategic development areas of the 8NDP were arrived at through a review of past performance and consultations with stakeholders in regard to the persistent development issues across different sectors of the economy, including their causes and key actions required to address them. By implementing the identified actions under the four strategic development areas, it is expected that the developmental bottlenecks will be addressed to enable the country attain its medium and long-term objectives.