Friday, April 12, 2024

World Bank Approves Loan $40 Million for Zambia’s diversification program

Share

World Bank, Washington DC
World Bank, Washington DC

The World Bank Group Board of Executive Directors has today approved a US$ 40 million credit to support Zambia’s economic diversification efforts through the Zambia Agribusiness and Trade Project.

The project aims to contribute to increased market linkages and firm growth in agribusiness. The project will cover all ten provinces of Zambia. Initially, implementation of the activities will commence with the regions that have both high poverty incidences and agro-processing activities.

According to Brian Mtonya and Tugba Gurcanlar, World Bank Senior Private Sector Specialists, “Zambia’s growth has been primarily driven by mining, construction, and financial services and did too little to create jobs and expand opportunities beyond the relatively small labor force already employed in these industries.” This project is expected to reach 4,000 farmer households and 300 Small and Medium Enterprises (SMEs). Thus the project will have at least 30,000 direct beneficiaries

Like other resource rich economies in Africa, Zambia enjoyed the commodity boom with an average annual growth of about 7.5 percent between 2007 and 2014. Unfortunately, this economic growth has not been inclusive and poverty in Zambia is relatively high, with 61.2 percent of the population estimated to be living below the national poverty line (US$1.90 per day purchasing power parity terms) and the income share of the bottom 40 percent fell between 2003 and 2010.

To be more inclusive, growth in Zambia needs to raise the productivity and income of the bottom 40 percent, most of who are employed in the agricultural sector and SMEs.

“Given the Government of the Republic of Zambia’s recognition of the need to diversify out of copper and into other key economic sectors such as agriculture, tourism and services, the World Bank has a large comparative advantage in providing solutions to clients such as Zambia to address key challenges such as diversification and job creation. Agriculture employs the majority of people in Zambia, and most of these are women. Therefore more effective policies, institutions, and support programs in agribusiness and trade would be instrumental in achieving both broad-based growth and economic diversification in Zambia”, says Ina Ruthenberg, World Bank Country Manager for Zambia.

Zambia needs to diversify its sources to sustain its growth, as well as to create employment for its fast growing, urban, and youthful population. Zambia’s performance in job creation and poverty reduction have not been commensurate with its economic growth—employment is estimated to have grown annually by only 3.1 percent on average in 2004–2014, less than half of its GDP growth. Copper accounts for over 70 percent of exports but this industry only employs 1.7 percent of the total labor force. Overall, labor participation rates are falling while youth unemployment is rising.

6 COMMENTS

  1. it is shameful that politicians are wasting money and then going for outside help. the $40m could have come from our mines. very shameful.

  2. All that money is going into visionless Lungu & his PF bandits. Nothing tangible will come out of this kaloba!
    Visionless Lungu must stop interference of the courts & let the presidential petition be heard whilst power should be with the speaker until the case is finalised.
    The Skeleton Key
    ~206~

  3. I hope this money will be put to good use unlike the earlier Euro bonds where the only thing we saw were 4 by 4s for govt officials en the defunct ZAMTEL..

  4. How about the good bitumen roads you are driving on when going for your smear campaigns you useless UPND chaps, hate won’t take you to state house, but Chimbokaila!

Comments are closed.

Read more

Local News

Discover more from Lusaka Times-Zambia's Leading Online News Site - LusakaTimes.com

Subscribe now to keep reading and get access to the full archive.

Continue reading