Zambia’s Growth Neither Pro-Poor Nor Inclusive – AfDB
The African Development Bank’s 2020 African Economic Outlook (AEO) has showed that economies in the region are growing well, exceeding the global average. According to their most recent report growth on the continent stood at 3.4% in 2019 and is expected to rise to 3.9% and 4.1% in 2021.
However, the Bank has raised concerns that the growth is not necessarily translating to improved living standards for the poorest.
A detailed analysis of growth between 2000 and 2017 led the Bank to conclude that in Benin and Zambia growth has been neither pro-poor nor inclusive in this period. As the Bank’s President Akinwuni Adesina has stated “nobody eats GDP.”
This is particularly concerning given that growth in Zambia was well below the regional average in 2019, slowing to 2%. Factors affecting growth include the impact of drought on agricultural production and hydropower electricity generation, as well as the impact of severe electricity rationing on economic sectors and slower mining.
The report noted that economic activity in Zambia is projected to remain relatively weak with a modest rebound to 2.4% in 2020 and 2.9% in 2021. The AEO also noted the impact of overreliance on non-concessional external borrowing since 2012, which has resulted in large domestic payment arrears and high levels of public debt that stood at 80% of GDP by the end of 2019 as compared with 35% in 2014. The report warns that Zambia is at high risk of debt distress.
According to Adesina “Growth must be visible. Growth must be equitable. Growth must be felt in the lives of people.” However, the report suggests that inclusive growth has only occurred in 18 out of 48 African countries.
The latest AEO report contains a special focus on education and skills for Africa’s workforce of the future, noting that the continent still lags behind other developing regions on this score. The Bank recommends a series of measures be undertaken in order to improve the quantity and quality of education, in addition to the better alignment of education policy with labour market needs.
