By Gray Soko
In 2010 the World Bank named Zambia as one of the world’s fastest economically reforming countries and the Bank has reclassified Zambia as a Lower Middle Income country. This is the World Bank’s analytical income category based on the Bank’s lending strategies. There are four categories, low, lower middle, upper middle and high. Monthly bulletins by the Zambia Statistical Office have recorded single digit inflation rates and the Bank of Zambia is pleased with the “stability” of the Kwacha against the major currencies ( no comparison to what it was in the 70s ,of course) and growth rates above 6%.
According to the Zambian Statistical Office website the incidence of poverty ranges from 84% in the Western Province to 72% for Central Province with the other provinces apart from Lusaka and Copperbelt within this range. However Lusaka and the Copperbelt recorded the highest unemployment rates at 31% each. Nationally 68% of Zambians live below the recognized poverty line with rural rates at 78% and urban areas at 53%[pullquote].people get the government they elect, often they do not get the government they deserve[/pullquote]
Life expectancy is recorded at 46 years with the literacy rate at 71%. Zambia also has the highest under 5 mortality rate per 1000 in Sub Saharan Africa, perhaps not surprisingly with 65% of Zambian households having incomes below the basic needs basket.
One way the government is trying to address the obviously high poverty levels and accelerate development has been the introduction of the Multi-Facility Economic Zones. The main objective of the MFEZ is to stimulate industrial and economic development through the manufacturing sector. It is envisaged that value addition to the country’s vast mineral and agricultural raw materials will bring about industrial development as well as increase exports typically through increased foreign direct investment and boost employment.
Chambeshi, Ndola, Lusaka, Mwinilunga, Mpulungu and Kasumbalesa have so far been identified as MFEZs . Apart from Lusaka, the urban areas may have been selected for their proximity to the present Copperbelt, Mpulungu and Kasumbalesa for warehousing and export oriented business.Mwinilunga was probably selected for its pineapple potential. Investors are free to identify and suggest any other location in the country deemed economical for such zones.
One may argue that the onus should be on Zambians to determine where such development should take place given the vast areas of the country that are undeveloped and that poverty levels are higher in the rural areas which form the bulk of the country. This why it is crucial that the current road and rail network in the country is transformed to open the country to development. The abundance of natural resources is not necessarily in the zones so far identified. Development efforts should not be confined to the current road/rail system.
The concept of special economic zones which includes free trade zones, export processing zones, industrial parks ,multi-facility zones etc. has been a major engine for the accelerated economic development in China where they were founded in the early 1980s under the government of Deng Xiaping and following the Chinese success story have been established in several countries across the world. The most successful special economic zone in China, Shenzhen, has developed from a small village into a city with a population of over 10 million within 20 years. A few years ago the Heritage Party mooted the “Village Concept” and dividing the country into economic triangles as a way of developing the country. This idea could be seriously reviewed and integrated in the specialized economic zone concept.
There is still debate in the country and abroad as to whether Zambia is getting the full benefit of the increased and profitable copper production. Other countries endowed with oil wealth on the continent are wondering whether their oil wealth is a curse or a blessing. This is because it is possible for the investor to benefit more than the country. There are very conducive conditions to attract investors. For the specialized economic zones for example there are typically up to 100% income tax exemptions on export income for the first 5 years, exemptions from sales tax, exemptions from customs/excise duties, freedom of invest transfer and obtained income of it with no administration encumbrance laws etc. It is therefore imperative that whilst such generous conditions are put in place to attract international business or multi-national corporations, the benefits to the country are substantial.
This is a tall order for the aspiring candidates. I hope these facts motivated them to aspire for the policy making institutions of our country with plans to address these issues. I strongly believe that development should be bottom up, it should start from the local level. Unfortunately one cannot be too hopeful of this with our present local or provincial government system. A former Mayor of Lusaka has accurately stated that the lack of capacity at the local level is a serious threat and hindrance to development. The way forward is the radical transformation of local government administration.
It has been said that people get the government they elect, often they do not get the government they deserve. The results of the September elections will tell.