Zambia has experienced a decade of strong economic performance, driven by renewed investment and high prices in the mineral sector. However, despite high levels of growth repeated hailed by the IMF and others as a ‘success story’ and a ‘shining example’ for Africa, there has been no increase in employment, and high levels of poverty and inequality have persisted. The high interest rates that attracted inward investment have constrained domestic participation in all sectors of the economy, especially agriculture. The benefits of growth have been limited to a small segment of the population. Indeed, it was growing popular discontent with the nature of Zambia’s economic ‘success’ that led to a change in Government following the elections of September 2011.

The new Government, led by President Michael Sata, faces the challenge of transforming an economy that sustained positive economic growth into one that supports equally positive inclusive, pro-poor growth. There is a strong political commitment to increasing employment, promoting labour-intensive economic activities, lowering interest rates and extending domestic participation in the economy. In doing so, it will be necessary to find a means of tapping into the country’s vast unutilised natural resources (especially land and water), whilst overcoming the challenges of being landlocked with poor internal transport infrastructure. Furthermore, the translation of policy into effective action requires the new Government to address the weaknesses of key institutions of government, which have for many years operated with indistinct mandates and modalities, sometimes serving to block rather than promote development.

Dr Guy Scott MP, Vice President of the Republic of Zambia, will discuss the key challenges, opportunities and trade-offs that the new Government is facing in order to sustain and utilise high levels of growth to accelerate poverty reduction, address high levels of inequity, and improve governance.