A tighter monetary policy will help cut inflation, but Zambia still has a serious problem with high public debt. == History == === Economic policies soon after independence (1964 - 1967) === The British South Africa Company (BSAC, originally set up by the British imperialist Cecil Rhodes) retained commercial assets and mineral rights that it acquired from a concession signed with the Litunga of Barotseland in 1892 (the Lochner Concession).
A tighter monetary policy will help cut inflation, but Zambia still has a serious problem with high public debt. == History == === Economic policies soon after independence (1964 - 1967) === The British South Africa Company (BSAC, originally set up by the British imperialist Cecil Rhodes) retained commercial assets and mineral rights that it acquired from a concession signed with the Litunga of Barotseland in 1892 (the Lochner Concession).
This was not true for subsequent plans === The Mulungushi Economic Reforms (1968) === A major switch in the structure of Zambia's economy came with the Mulungushi Reforms of April 1968: the government declared its intention to acquire equity holdings (usually 51% or more) in a number of key foreign-owned firms, to be controlled by a parastatal conglomerate named the Industrial Development Corporation (INDECO).
By January 1970, Zambia had acquired majority holding in the Zambian operations of the two major foreign mining corporations, the Anglo American Corporation and the Rhodesia Selection Trust (RST); the two became the Nchanga Consolidated Copper Mines (NCCM) and Roan Consolidated Mines (RCM), respectively.
In 1971, INDECO, MINDECO, and FINDECO were brought together under an omnibus parastatal, the Zambia Industrial and Mining Corporation (ZIMCO), to create one of the largest companies in sub-Saharan Africa, with the country's president, Kenneth Kaunda as Chairman of the Board.
The management contracts under which day-to-day operations of the mines had been carried out by Anglo American and RST were ended in 1973.
In 1982 NCCM and RCM were merged into the giant Zambia Consolidated Copper Mines Ltd (ZCCM). In 1973 a massive increase in the price of oil was followed by a slump in copper prices in 1975, resulting in a diminution of export earnings.
In 1973 the price of copper accounted for 95% of all export earnings; this halved in value on the world market in 1975.
In 2001, the first full year of a privatized industry, Zambia recorded its first year of increased productivity since 1973.
In 1982 NCCM and RCM were merged into the giant Zambia Consolidated Copper Mines Ltd (ZCCM). In 1973 a massive increase in the price of oil was followed by a slump in copper prices in 1975, resulting in a diminution of export earnings.
In 1973 the price of copper accounted for 95% of all export earnings; this halved in value on the world market in 1975.
By 1976 Zambia had a balance-of-payments crisis, and rapidly became massively indebted to the International Monetary Fund (IMF).
In 1982 NCCM and RCM were merged into the giant Zambia Consolidated Copper Mines Ltd (ZCCM). In 1973 a massive increase in the price of oil was followed by a slump in copper prices in 1975, resulting in a diminution of export earnings.
In desperation, Kaunda broke with the IMF in May 1987 and introduced a New Economic Recovery Programme in 1988.
In desperation, Kaunda broke with the IMF in May 1987 and introduced a New Economic Recovery Programme in 1988.
As of 2019, Zambia's GDP per capita (current international dollars) stands at $1,305.00 [https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=ZM&name_desc=true&view=chart]. For the first time since 1989 Zambia's economic growth reached the 6%-7% mark (in 2007) needed to reduce poverty significantly.
However, this did not help him and he eventually moved toward a new understanding with the IMF in 1989.
In 1990 Kaunda was forced to make a major policy volteface: he announced the intention to partially privatize the parastatals.
By 1998, however, output of copper had fallen to a low of 228,000 tonnes, continuing a 30-year decline in output due to lack of investment, and until recently, low copper prices and uncertainty over privatization.
The government was forced to draw down foreign exchange reserves sharply in 1998 to meet foreign debt obligations, putting further pressure on the kwacha and inflation.
The final transfer of ZCCM's assets occurred on March 31, 2000.
Zambia qualified for HIPC debt relief in 2000, contingent upon the country meeting certain performance criteria, and this should offer a long-term solution to Zambia's debt situation.
Agriculture accounted for 85% of total employment (formal and informal) for 2000.
Inflation held at 32% in 2000; consequently, the kwacha lost the same value against the dollar over the same period.
In 2001, the first full year of a privatized industry, Zambia recorded its first year of increased productivity since 1973.
In mid- to late 2001, Zambia's fiscal management became more conservative.
As a result, 2001 year-end inflation was below 20%, its best result in decades.
The future of the copper industry in Zambia was thrown into doubt in January 2002, when investors in Zambia's largest copper mine announced their intention to withdraw their investment.
In 2002 inflation rose to 26.7%.
In January 2003, the Zambian Government informed the International Monetary Fund and World Bank that it wished to renegotiate some of the agreed performance criteria calling for privatization of the Zambia National Commercial Bank and the national telephone and electricity utilities. ==Sectors== === Mining === In 2019, the country was the world's 7th largest producer of copper.
Copper output has increased steadily since 2004, due to higher copper prices and the opening of new mines.
Cooperation continues with international bodies on programs to reduce poverty, including a new lending arrangement with the IMF in the second quarter of 2004.
However, surging copper prices from 2004 to the present day rapidly rekindled international interest in Zambia's copper sector with a new buyer found for KCCM and massive investments in expanding capacity launched.
The maize harvest was again good in 2005, helping boost GDP and agricultural exports.
As of 2019, Zambia's GDP per capita (current international dollars) stands at $1,305.00 [https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=ZM&name_desc=true&view=chart]. For the first time since 1989 Zambia's economic growth reached the 6%-7% mark (in 2007) needed to reduce poverty significantly.
However, in 2007 inflation hit 8%, the first time in 30 years that Zambia had seen single digit inflation. On January 27, 2011, it was reported by the Central Statistical Office that inflation rose to 9%.
Zambia is a developing country and has achieved middle-income status in 2011.
However, in 2007 inflation hit 8%, the first time in 30 years that Zambia had seen single digit inflation. On January 27, 2011, it was reported by the Central Statistical Office that inflation rose to 9%.
in 2012 Between April 2019 and April 2020 Zambia' s Annual inflation rate rose to 15.7% from 14% in March 2020.
The value of the kwacha against the dollar has been relatively consistent for the past two years and has yet to return to the recent high of almost 0.2 kwacha to the dollar in 2013.
The rise of prices in food and other non- food items led to the increase in the Annual inflation rate. However, it is significant that inflation often peaks in election years, hitting a recent high of 17.9% in 2016.
Nonetheless, the real effective exchange rate of the kwacha against a weighted average of foreign currencies improved from 88.5 in 2016 to 96.4 in 2017.
Nonetheless, the real effective exchange rate of the kwacha against a weighted average of foreign currencies improved from 88.5 in 2016 to 96.4 in 2017.
The kwacha lost value against the dollar in September 2018 but has remained fairly consistent at 0.08 to the dollar in November to December, though further instability remains likely due to both political and economic uncertainty. ==Growth== There are, however, positive macroeconomic signs, rooted in reforms implemented in the early and mid-1990s.
As of 2019, Zambia's GDP per capita (current international dollars) stands at $1,305.00 [https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=ZM&name_desc=true&view=chart]. For the first time since 1989 Zambia's economic growth reached the 6%-7% mark (in 2007) needed to reduce poverty significantly.
In January 2003, the Zambian Government informed the International Monetary Fund and World Bank that it wished to renegotiate some of the agreed performance criteria calling for privatization of the Zambia National Commercial Bank and the national telephone and electricity utilities. ==Sectors== === Mining === In 2019, the country was the world's 7th largest producer of copper.
=== Livestock === In livestock, Zambia produced, in 2019: 191 thousand tons of beef; 50 thousand tons of chicken meat; 34 thousand tons of pork; 453 million liters of cow's milk, among others.
in 2012 Between April 2019 and April 2020 Zambia' s Annual inflation rate rose to 15.7% from 14% in March 2020.
in 2012 Between April 2019 and April 2020 Zambia' s Annual inflation rate rose to 15.7% from 14% in March 2020.
This suggests that a further peak is likely approaching during the 2021 general elections.
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