By MAIMBOLWA MULIKELELA –
THE World Bank Group has approved a US$40 million credit to support Zambia’s economic diversification efforts.
This will be supported through the Zambia Agribusiness and Trade project which is aimed at helping to increase market linkages and firm growth in agribusiness.
The project will cover all 10 provinces of Zambia and that implementation of the activities will commence with the regions that have both high poverty incidences and agro-processing activities.
This is according to World Bank senior private sector specialist Brian Mtonya and Tugba Gurcanlar.
“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 labour force already employed in these industries,” the duo said.
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 per cent between 2007 and 2014.
Unfortunately, this economic growth has not been inclusive and poverty in Zambia is relatively high, with 61.2 per cent of the population estimated to be living below the national poverty line and the income share of the bottom 40 per cent fell between 2003 and 2010.
To be more inclusive, growth in Zambia needs to raise the productivity and income of the bottom 40 per cent, most of whom are employed in the agricultural sector and SMEs.
“Given the Government’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,” World Bank Country Manager for Zambia Ina-Marlene Ruthenberg said.
Ms Ruthenberg said agriculture employs the majority of people in Zambia, and most of these are women.
Therefore, more effective policies, institutions, and support programmes in agribusiness and trade would be instrumental in achieving both broad-based growth and economic diversification in Zambia.
Zambia needs to diversify its sources to sustain growth, as well as to create employment for its fast growing, urban, and youthful population.