Lusaka, Zambia, 26 September 2023 - The International Monetary Fund (IMF) and the United Nations Economic Commission for Africa (UNECA), Sub regional Office for Southern Africa (SRO-SA), delivered a lecture to over 400 University of Zambia, department of economics students and lecturers on the policy measures that address not only economic problems but social issues to help Zambia tackle inequality and promote inclusive growth.
This is the third in the series of public lectures. The first was on debt management held in July 2022, followed by a joint IMF/ECA on, "Addressing the Financial Squeeze for Achieving Sustainable Development Goals," held on 9 June 2023. The third lecture on the theme, "From Economic Stabilization to Inclusive Growth: Zambia's Reform Path" addressed concrete measures that the country has taken to stabilise the economy supported by IMF, and considered interventions ECA supports through the 8th National Development Plan ensuring that development trickles down to the majority of the population.
In his welcoming remarks Prof Jacob Malungo, Dean, Humanities and Social Sciences said, "Zambia needs an industrial revolution and its population to be in the driving seat providing checks and balances to government expenditure". He welcomed the importance of IMF and ECA discussing these economic issues with the university.
Ms. Eunice Kamwendo, Director, ECA SRO-SA gave the context of the support by international partners to ensure sustainable inclusive industrialisation in line with the SRO-SA core objective to contribute to achieving structural transformation through inclusive industrialization aimed at sustainable economic growth and reducing poverty and inequality in the subregion. In her presentation she outlined some aspects of the reform path for Zambia and why it is necessary for the country to undertake the necessary reforms. She noted, "Zambia's high poverty rate which is at 60%, inequality at 57.1, youth unemployment at 17.05%, growth of the Gross Domestic Product (GDP) which, today is 4.74%; lower than 16.64% in 1965, and in the 2021-2022 UN Human Development Index the country ranks 145th out of 166 countries in its overall Sustainable Development Goal performance".
She emphasised the strategic reforms undertaken to ensure economic transformation, job creation, social development, environmental sustainability and good governance. She also outlined prospects for inclusive growth and cited initiatives currently underway to strengthen economic diversification and deepen value chain development, with the objective of accelerating socio-economic growth and development in Zambia. She referred to some of the ECA supported projects in Zambia including Zambia-Zimbabwe Common Agro Industrial Park and the Battery Value Chain initiative between Zambia and the Democratic Republic of Congo anchored by the African Continental Free Trade Area Agreement.
The IMF Resident Representative, Ms Preya Sharma's presentation was based on the recent 2023 Article IV Consultation. In August 2022, the International Monetary Fund's Executive Board approved a 38-month arrangement under the Extended Credit Facility (ECF). During her presentation, Ms. Sharma indicated that Zambia's economic growth has rebounded with inflation at a declined growth rate of 5% compared to 2019.
She traced the trajectory that Zambia has taken and the role of IMF in the reforms, stating that the country had been faced with excessive borrowing that led to unstable debt. In June 2023 Zambia agreed a debt restructuring with official creditors and noted that the Fund-supported program will, "underpin the authorities' efforts to restore macroeconomic stability, and foster higher, more resilient, and more inclusive growth. The IMF helps Zambia through debt structuring, policy reforms to reduce spending, targeted improvement in fiscal consolidation, and restoring debt sustainability. She further noted that Zambia and IMF are working together, the goal is to bring the risk of debt distress to moderate over the medium term".
The two lecture presentations were followed by a Question and Answer Session moderated by Ms. Olayinka Bandele, ECA SRO-SA Chief Inclusive Industrialisation who was accompanied by two discussants from the University. The Q & A session gave an opportunity for lecturers, students and other participants to raise pertinent issues and receive more insights on the lecture theme. Dr Obrian Njovu appreciated that IMF and ECA presentations gave solutions and initiatives that can help Zambia in inclusive growth such as increased social spending through health and education. He suggested other potential sources of growth that include agriculture development, bringing back industries and carbon markets. Mr Abson Chompolola, called on redefinition of diversification by putting emphasis on value addition and market linkages. He also advised IMF to improve the warning system to allow early detection of economic distress.
The lecture was also an opportunity for students to air their views. During the Q and A with the panel, students concerns ranged from income inequality and equal distribution of wealth; impact of the IMF restructuring programme on the poor segments of the population; level of poverty in Zambia and the countries capacity to set up an industrial base. The students collectively agreed that the lecture helped deepen their understanding of economic issues and interrogate the policies being implemented by their government. They called on IMF and ECA to continue these lectures and invite government officials to participate.
The Sub-Regional Office for Southern Africa
UN Economic Commission for Africa (ECA)
P.O. Box 30647, Lusaka, Zambia.
Ms. Lavender Degre
Tel: +260 211 228502/5 Ext. 21307
DL: +260 211 376607