Zambia
Zambia's economy growing but poverty prevails

afrol News, 7 December - According to an analysis released yesterday by the IMF, "Zambia's economic performance through end-June 2001 continued to improve." Ten years of structural adjustment and reform had however not had a positive impact on poverty.

- Despite the lower-than-expected output of maize, the targeted real GDP growth of 5 percent for 2001 should be achieved on the basis of a strong recovery in mining, wholesale and retail trade, and manufacturing, the IMF yesterday concluded after studying the available indicators of Zambia's economic activity. 

Balance of payments developments during the first-half of 2001 had been mixed, according to the IMF. "The privatisation of the copper mines led to a 32 percent increase in copper export receipts over the same period in 2000. However, growth of non-traditional exports was lower than programmed, mainly because of political turmoil in regional trading partners countries." 

- Substantial progress was made in implementing structural reforms, the agency states. All in all, the IMF was most content with the reforms' progress in the country. Zambia had made substantial progress with structural reforms in many sectors over the decade of the 1990s. 

In contrast to early 1990s, "Zambia today has an open economy where prices are largely market determined and a greater part of the previously state-owned enterprises has been restructured and divested to the private sector including the all-important copper company." 

The use of these accomplishments is however more than questionable. Even the IMF admits these accomplishments had been "overshadowed by limited success in significantly reducing the incidence of poverty." After 10 years of reform, Zambia also had achieved "a limited success" in "attaining macroeconomic stability," the agency admits.

Nonetheless, the IMF Directors "underlined the importance of deepening structural reforms." The recipe for economic growth and poverty reduction thus remains the same: Zambia should "privatise the Zambia National Commercial Bank as soon as possible." 

Further, Zambia was urged to a "quick implementation of reform measures in the oil sector and of steps to enhance external competitiveness as well as broaden the export base." The IMF emphasized "the importance of improving governance, through a broad approach aimed at strengthening the Ministry of Finance and line Ministries, making the office of the Auditor General an independent entity, and improving institutional checks and balances." 

Ten years of reform in Zambia might indicate that these steps had little other effect on the country's economy than changing its superficial structure. Although little has been done to reduce poverty so far, the IMF now "welcomed the authorities' progress in formulating their poverty reduction strategy."

Sources: Based on IMF & afrol archives

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