Zambia’s economic overview

Economic growth (sector status)

Zambia registered positive economic growth during the period 2005 to 2010, averaging between 5 and 6 per cent. This has almost doubled compared to GDP growth during the previous period and since the economic decline during the 1980s. The positive growth can be traced to structural reforms, macroeconomic policies and the increase of the mining production, and, to a lesser extent, to agriculture production. The mining sector has been the main driver of growth, with an average increase of 9 per cent between 2000 and 2006. Agriculture which is the main employer, accounting for 71.3 per cent of total employment, has not contributed much to the growth with an average increase of 2.1 per cent per annum in the same period. In 2009, however, agriculture grew by more than 7 per cent.

Public finance management and governance

In Zambia there has been fear that the governance situation has been deteriorating as a result of the political undertakings and also as a result of perceived inadequate public finance management leading to high levels of misapplication of public funds. As of July 2013, the Anti-Corruption Commission (ACC) had identified over 40 cases of corruption in the current Auditor General’s Report for follow-up further, Contrary to the Act which requires the parastatals to produce audited financial statements and annual reports, as of December 2012, 3 out of the 20 that were audited failed to produce the reports. This is execrated by having public pronouncements over Government projects that are not budgeted for in the national budget such as the creation of new districts and by-election perceived to be politically induced. Human rights, observance of public order act are critical in ensuring that governance is maintained but institutions charged with the responsibility are underfunded making it difficult for them to perform their functions efficiently and effectively.

SACCORD within this strategic plan will create awareness and advocate for prudent public finance management and governance which is important in building the public’s confidence that their finances are put to good use. This action is important as it helps contribute to the maintenance of peace.

The extractive industry and community development

Zambia’s economy has placed high dependency on large scale excavation industries which contribute over 75% to the country’s gross domestic product (GDP), however the costs to the economy in terms of environmental degradation and health have been far reaching for most of the communities in the mining areas. This has gravely affected the people who live in these communities and there have not been corrective measures and adequate response from the mining companies to take into account the harmful impact mines have on the communities. Zambia has entered into unequal mining contracts with multinational mining companies that have left the Government with limited or no power to effect legislation that promotes sustainable development and protects the human rights of mining community members through corporate social responsibility. The ignorance of mining regulations by the communities coupled with capacity deficiency in sustainable development at all levels such as Government, mining companies and community members renders effective legislation regarding corporate social responsibility ineffective. This is further exacerbated by low levels of accountability, transparency and commitment to sustainable development and corporate social responsibility by mining companies. Furthermore the poor implementation of corporate social responsibility regulations raises issues of disempowerment on the community.

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