GROUP 1 PRESENTATION

ZAMBIA HAS UNDER GONE VARIOUS

TRANSFORMATION OVER THE YEARS IN THE AREA OF
ECONOMIC DEVELOPMENT .
 GIVE A DETAILED ACCOUNT OF THE ECONOMIC
SITUATION IN ZAMBIA DURING THE
PRE_INDEPENDENCE ERA, AFTER INDEPENDENCE
AND FINALLY AFTER 1991 AND THE ECONOMIC
RESULTSOF THOSE TIME PERIODS.
 PRE_INDEPENDENCE
 Before 1964 the territory of ERA
Zambia was called northern Rhodesia from 1911-1963,
it was then renamed Zambia after gaining it's independence in 1964 from the British
rulers, the name Zambia came from the Zambezi river which means the Grand
River. The following writing will talk about the economic situation in Zambia
during the pre-independence era, after independence and finally after 1991 as well
as the economic results of these time periods. .
 Prior to gaining independence in 1964, Zambia had a very small number of
indigenous businessmen. By the time of Independence, Zambia did not have
businessmen and women who were experienced in managing complex businesses.
Zambian business started growing when the cash economy became the standard for
business transactions. Zambia gained its independence with a less educated
workforce, ill-equipped to administer the economy. Zambia was also a member of
the frontline states; this meant that a lot of resources were used to help in the
liberation of its neighbors. In the years after independence, the copper price was
fetching a high price on the international market and the oil price was favorable
(Chimpungu 1992).
 After attaining independence in 1964, Zambia was among the most prosperous
nations in Africa. With a rich endowment of arable land, water and mineral
resources, it held great potential for sustainable development and improving the
living standards of all Zambians. The new government of the United National
Independence Party (UNIP) led by President Kenneth Kaunda inherited a
country with inadequate infrastructure and less skilled human capital. Andrew
Sardanis mentioned that at independence Zambia only had one black engineer,
three black doctors and three black lawyers and 90 other black university
graduates, working mainly as teachers and senior civil servants (Sardinis,
2014).
 The wealth and the economy of the nation was in the hands of foreigners, as
well as the skills. The black Zambians had no experience in governance such
that when the British civil servants started departing as their contracts with the
colonial Office expired, many services started coming apart. Apart from that,
the ordinary Zambian citizen had no formal education and access to the market,
this limited them to substantive farming and transactions of easily sourced
goods. Entrepreneurship was in its infancy. Initially, the government followed a
liberal political and economic policy like the first national plan of 1966 -1971
that focused on the provision of infrastructure, investment in manufacturing
and services to the majority of people especially in towns along the line rail
(Britannica, 2020).
 AFTER INDEPENDENCE

1. This plan proved to be successful in that majority of Zambians got employed in these
new industries and the buying power of the people increased, small businesses began
to mushroom across towns and cities. Demand for foreign goods necessitated cross-
border trade among the locals with foreign countries even though majority of the
neighbor states where not yet independent. The policies that came after the first
National Development plan did not promote entrepreneurship and were not as
effective as the first one.
2. In 1972, there was a major switch in the structure of the country’s economy to a more
restrictive policy environment with the Mulungushi Reforms of April 1968. The
government declared intention to become the majority shareholders in a number of
key foreign-owned firms, this was to be controlled by the Industrial Development
Corporation (INDECO). The government acquired majority shareholding in two
foreign mining corporations, the Anglo American Corporation and 4the Rhodesia
Selection Trust which became the Nchanga Consolidated Copper Mines and Roan
Consolidated Mines, respectively.
 Government control extended to insurance companies and building societies,
these where placed in a newly established parastatal body called FINDECO. The
banks resisted this take over and succeeded. Several Parastatal bodies where
merged to form the Zambia Industrial and Mining Corporation (ZIMCO), this
became one of the largest companies in sub-Saharan Africa. This process of
taking over key corporations and merging them into state controlled parastatals
was called Zambianisation. The government imposed high tariffs for protection.
The buying and selling of goods became much controlled. Consumables became
heavily subsidized, prices were controlled and agriculture inputs and credit
became the responsibility of the government. All these changes were detrimental
to the growth of entrepreneurship in Zambia.
 Having a controlled price environment affected business negatively, the creative
aspects of doing business was at its lowest. The majority of the people followed
the path of seeking formal employment in government-owned institutions. It was
lucrative to work in the government because of the stable economy which was
mainly affected by the booming copper industry. In 1973, the management
contracts that were agreed upon to continue with the smooth running of the mines
by Anglo American and the Rhodesia Selection Trust came to an end. The policy
to nationalize the mines was not timed very well. In the period after 1973, there
was a massive increase in oil price which greatly increased the cost of
importations coupled with the failing copper prices in 1975 and also political
turmoil in neighboring countries.
 Initially, the government thought the falling copper price was temporal,
with that the government anticipated arise in price, hence, borrowed
excessively to sustain the economy. There was little hope of putting. The
Third national development plan of 1978 to 1983 into practice
(Britannica, 2020).

 By the early1980s, it became clear that the reforms which started in 1968
had failed. The reforms lacked diversification of the economy from
copper dependence to agriculture and entrepreneurship. From1983 to
1985, the government attempted an IMF/World Bank Structural
Adjustment Programme (SAP) that came with tough conditions such that
it was abandoned in May 1987 due to food riots in the major cities. The
government introduced a new program that re-imposed the controls of
the1970s to replace SAP. Despite this, the economy continued to decline,
more people lost their Jobs, poverty levels kept on rising and the national
debt increased to $7.1 billion by 1991 (Henriot,2020).
• In October 1991, the Movement for Multi-party Democracy (MMD) was elected by
the Zambian people. This was the resultant of the discontent that the people had with
the performance of their forms of the previous government. The new government
began to push liberal policies with the support of the IMF and the World Bank SAP,
with the hope of having an efficient private sector to lead the economy. This was the
beginning of the massive expansion of entrepreneurship in Zambia.
• The role of the state remained in creating an enabling environment for the private
sector to thrive. There was massive liberalization of trade, exchange rates, and interest
rates, subsidies removed and most of the parastatal companies were privatized.
• The market became an ideal environment for entrepreneurship to flourish, demand,
and supply would determine the price of goods and Services. Apart from that, the
government had to reduce the civil service workforce to the right size. Those that got
retrenched were given some money that they used to start up Small and Medium
Enterprise. Ordinary Zambians started using their creative abilities to buy goods and
resale for a profit. The Zambian dream was now pushed into the hands of the citizens,
a new dawn of entrepreneurship and entrepreneurship tendency had come alive.
 CONT’D
 In September 2011, there was a change of government administration from the
Movement for Multiparty Democracy to the Patriotic Front Government. The
new administration revised the Sixth National Development Plan OF 2011 TO
2015 to align it with their manifesto and policies. The revised plan was primarily
an investment plan that focused on capital investment areas with a bias to rural
development and job creation. The government wanted this development to be
driven by the private sector such as Tourism, Manufacturing, and Mining. In
addition to this, new policies were put in place for the sector to thrive. The
strategic focus was to create jobs, rural development, growth that encompasses all
citizens while investing in human development to take care of the macro-
economic fundamentals (Ministry of Finance, 2014).
 The government created and implemented monetary and financial sector polices
that helped to maintain price and financial stability. There was a positive growth
in the private sector through small and medium scale enterprise, more businesses
opened up. The cost of borrowing was favorable and there was enough money in
circulation. Entrepreneurship growth was at its pick, all sectors had the private
companies operating, and the market attracted foreign investments.
 CONT’D
 The capital base of banking and insurance system was strengthened and the
government promoted the corporate debt market in order to expand access to
credit for SMEs (Ministry of Finance, 2014).
 The government accelerated growth and diversification by increasing private
investments through encouraging the foreign direct investment (FDI). The country
had a low level of domestic savings which limited access to credit for SMEs. The
foreign direct investments filled in the gap and positively affected the
entrepreneurship growth in Zambia.
 The development of Multi-Facility Economic Zones and industrial Parks that have
been created in Lusaka and on the Copperbelt offered producers an enabling and
competitive environment. The zones have created the link in the economy for
production of high value goods some of which are being exported to neighboring
countries. Then came the Seventh National Development Plan of 2017 to 2021
which aimed at creating a more conducive environment so that Zambia can
become a middle income country that offers decent employment opportunities for
all Zambians of different educational and skill background in all industries. This is
planned to be achieved by harnessing opportunities for economic diversification
and growth (Ministry of National Development Planning, 2017).
 CONT’D
 Apart from government organisations, other organisations and government
agencies have setup programs to promote entrepreneurship in Zambia one
example is the United States Embassy that provides support to Zambian
entrepreneurs through its program and events that are aimed at promoting
skill development, mentorship, business to business connections and
partnerships, and assist access to opportunities, resources and networks (U.S.
Embassy in Zambia, 2020).
 Having gained independence in 1964 and now ranking as a lower middle-
income country even though the economy was highly rated at independence,
Zambia has seen entrepreneurship growth in all sectors. The history and
economic policies of the past had a bearing on entrepreneurship growth in the
country. Political factors coupled with social factors have shaped the business
landscape of Zambia. The stages of economic changes from independence to
1991 were not favorable with entrepreneurship growth. However, the
transformation came in when there was the liberalization of the economy after
the re-introduction of multiparty politics in Zambia.
 THE ECONOMIC RESULTS FROM (1964)

 The following are the economic results of the above time periods. To begin with,
the most important achievement of the pre independence period was economic
development in the early 1920s was the discovery of vast deposits of copper,
mostly well below the levels reached by existing mines. After a short setback in
the early 1930s as result of a falloff in the demand for copper in the great
depression, mining became profitable again. Financial significance of the copper
industry for northern Rhodesia was economic development. The rapid industrial
extension had profound social and political effects. Most rural areas suffered
impoverishment because there were no able bodies to work in the mine.
Secondly, during Kaunda’s presidency the economic results were as follows.
 In the early 1970 Zambia’s economic fortune took pictures a tune to the worse.
Copper continued to provide the great bulk of export earnings, but prices
fluctuated erratically and suffered prolonged fall in 1975. In this period the
government, committed to high spending, both in public and private reacted by
borrowing heavily abroad and drawing on reserves. Investment declined, as did
the efficiency of the transport network.
 THE ECONOMIC RESULTS FROM (1991)

 The results of the economy during chiluba’s presidency. Having inherited a trabled
economy, chiluba worked with the Bretton woods institution to establish free mark
economy. Chiluba’s administration work to bring about economic reform, but
ironically economic progress was limited due to the wide spread of corruption that
became a problem under his rule. The results was a general raise in unemployment
and poverty, through the inequality decline in the same period.
 The economy remained heavily dependent on the copper industry; the economy
achievement this period was uneven. Efforts at attracting foreign donor funds were
hampered by the failure to deal firmerly with the state corruption. Zambia was highly
in debted poor country and became eligible for a two-third reduction in debt if it is
implemented a poverty reduction strutage.
THE ECONOMIC RESULTS FROM (2001)

 Mwanawasa is credited with having initiated a campaign to rid the

corruption situation in Zambia. Consistent economic growth was recorded
overaging 4.9%, during mwanawasa’s reign, microeconomic stability was
strengthened with inflation falling to single digit level and budget
management was also improved.
 President L.P Mwanawasa also succeeded in obtaining substantial debt relief
through the heavily indebted poor countries (HIPC) and the multilateral debt
relief initiative, thereby relieving the country of the highly previously high
debt burden and the GDP reached 8.0%.
 THE ECONOMIC RESULTS FROM (2008)

 During president Rupiah B. Banda’s three year reign he demonstrated

robust economic growth reaching the highest peak during the period and
his 10% growth in 2010 was as high as president Kaunda’s in 1972.

 economy experienced growth during Sata’s presidency, there was

increasing discontent among the population over his failure to deliver on
some of his election promises, such as reducing unemployment,
improving socio economic policy, and championing democratic
governance
THE ECONOMIC RESULTS FROM (2014)

 Lungu’s administration was lauded for the number of economic

development in form of infrastructure projects it had completed, which
included improving existing roads as well as building new ones,
constructing many new schools, increasing the country’s power-generating
capacity, refurbishing international airports, and constructing new health
care facilities as well as upgrading existing structures.
 In contrast to this progress, however, the country experienced a worsening
economy, the fallout of which was compounded by the COVID-19 global
pandemic beginning in 2020.
 CONCLUSION
Zambia's economy started getting better after 2020 when
we had an experience of the covid 19 uncertainty which
affected global economies, some measures have been put
in place to sustain the economy, eg when a vaccine is
given to an individual health personnel say they put an in
active bacteria/virus to awaken the immune system so
that when an active one come its fought using the tactics
it used. This regard we can conclude by saying Zambia's
economy is improving by diversifying into different
income generating activities.