Resource information
Zambia shares its robust economic growth
and capital inflows in the past few years with other
Sub-Saharan countries, growth supported by high commodity
prices that while declining are still at historical high
levels. High commodity prices have induced large foreign
direct investment (FDI) flows, mainly in extractive
industries but also in services sector, supporting growth.
Zambia's mining sector has benefited from FDI,
receiving almost 1 billion dollar in 2011 alone. A large gap
has emerged between available resources and likely spending
in 2013. The government is responding with a full range of
adjustments, including cutting recurrent spending (such as
on travel and motor vehicles), cutting capital projects, and
stepping up revenue collection. The government has raised
fuel prices and reduced maize and fertilizer subsidies, but
the medium-term fiscal impact of these initiatives is
uncertain. These reforms aimed to create space for expanding
better targeted spending programs. Zambia's economy has
seen far too many unexpected policy changes in recent years.
Persistent and even escalating perceptions of an uncertain
policy environment can weaken investment, thereby reducing
gross domestic product (GDP) growth. Zambia's
population and labor force is young and growing fast. The
current structure of the economy and sources of growth are
such that formal wage jobs are being created slowly.
Creating formal jobs in the private sector is rightly
accorded top priority in government policy and strategy
documents. The government's general approach is to
provide an enabling environment for the private sector and
address constraints to growth. For wage employment,
understanding the technical and vocational education sector
is a priority for future skills development. There is a need
to address the gaps in access to basic education and prevent
dropouts through targeted programs for children at risk of
not starting or finishing school. This report is divided in
two sections: section one gives recent economic developments
and section two presents jobs challenge: realities on the ground.
