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1、ZambiaCountryEconomicMemorandumUn1.ockingproductivityandeconomictransformationforbetterjobsJune2024WOR1.DBANKMacroeconomics,Trade,andInvestmentG1.oba1.PracticeEastandSouthernAfricaRegionTheWor1.dBankGroup!acknow1.edgementsThisreportwaspreparedbyateam1.edbyA1.bertPijuanSa1.a(SeniorEconomist),JorgeTud
2、e1.aPye(Economist),andPaavoE1.iste(PracticeManager).Theteaminc1.udedPhi1.ipSchu1.er(1.eadEconomist),JosephSimumba(Economist),MariaGabrie1.aFarfan(SeniorEconomist),1.y1.ianaGayoso(Consu1.tant),VaninaForget(SeniorAgricu1.tureEconomist),Auck1.andN.Kuteya(Consu1.tant),BrianMu1.enga(Consu1.tant),RyanKuo(
3、Economist),SophiaMuradyan(SeniorPrivateSectorSpecia1.ist),SoujanyaChodavarapu(SeniorPrivateSectorSpecia1.ist),andNamuchanaMuyawa(ProgramAssistant).Chapter3oftheCEMdrawsfromaresearchco1.1.aborationwiththeZambiaRevenueAuthority(ZRA).FionaHinchc1.iffeprovidededitoria1.supportandKatarinaZeravicadesigned
4、thereport.Thereportwaspreparedundertheovera1.1.guidanceofNathanM.Be1.ete(CountryDirector,AECE1.)zAchimFock(CountryManager,AEMZM)rAbhaPrasad(PracticeManager,EAEM1.),AghassiMkrtchyan(Program1.eaderand1.eadEconomist,AECE1.)zandWi1.1.iamBattai1.e(formerProgram1.eaderand1.eadCountryEconomist,AECE1.).Thet
5、eamwou1.da1.so1.iketoacknow1.edgethecommentsfrompeerreviewersandco1.1.eaguesA1.1.enDennis,A1.exSienaertrDinoMerottorEkaterinaVOStroknUtova,HananeAhmed,JohnKeyser,Nico1.oDa1.vrt,FaustoPatinoPenarIsakuEndofAhmedRostomrAndreasEberhard,ShaunMannzandMohammadFaridA1.AzimBinNoruzi.Theteama1.sogratefu1.1.ya
6、cknow1.edgestheco1.1.aborationwiththeGovernmentoftheRepub1.icofZambiaanddeve1.opmentpartners.Regiona1.VicePresident:VictoriaKwakwaCountryDirector:NathanM.Bc1.eteRegiona1.Director:HassanZamanPracticeManager:AbhaPrasadTaskTeam1.eaders:A1.bertPijuanSa1.a,JorgeTude1.aPye,andPaavoE1.isteITAB1.EOFCONTENTS
7、ACRONYMS2EXECUTIVESUMMARY4Mainpo1.icyrecommendations10CHAPTER 1: REFOCUSINGZAMBIAzSGROWTHMODE1.141.1 Introduction141.2 Fromaminingboomtofisca1.g1.oom-Zambiasshiftingdriversofgrowth171.3 Nothingnewunderthesun-1.imitationsofZambia,scurrentmode1.forachievingsustainedandinc1.usivegrowth211.4 Transformin
8、ghowZambiagrows27Annex1.GrowthAccounting-Growth,1.aborproductivity,andtota1.factorproductivitydecomposition35CHAPTER 2: UN1.EASHINGAGRICU1.TURA1.PRODUCTIVITY362.1 Zambianagricu1.ture:Highunrea1.izedpotentia1.anddec1.iningPrOdUCtiVitV372.2 AgronomiccausesOfded1.ningagricu1.tura1.productivity422.3 The
9、ro1.eofpub1.icpo1.iciesandinstitutionsinagricu1.tura1.stagnation472.4 Po1.icyrecommendations56Annex2.Under1.yingdataandfigures62CHAPTER 3: RAISINGTHEPRODUCTIVITYOFFIRMSANDWORKERS673.1 HarnessingZambia,sprivatesectorforbetterjobs683.2 Exp1.oringforma1.firmsandjobsinZambia693.3 Fa1.1.ing1.aborproducti
10、vityintheforma1.sector763.4 Whafsdrivingproductivitydec1.ine?823.5 Po1.icyrecommendations90Annex3.Detai1.edproductivityestimationanddecompositionmethodo1.ogy99REFERENCES103!acronymsZambiaDeve1.opmentAgencyZambiankwachaZambiaRevenueAuthorityAfCFTAAfricaContinenta1.FreeTradeAreaZDACEMCountryEconomicMe
11、morandumZMKCITCorporateincometaxZRADISDirectInputSupportDRCDomesticresourcecost(ratios)DRCDemocraticRepub1.icofCongoERBEnergyRegu1.ationBoardFDiForeigndirectinvestmentFtSPFarmerInputSubsidyProgramFRAFoodReserveAgencyFTEFu1.1.-timeequiva1.entGDPGrossdomesticproductGRZGovernmentoftheRepub1.icofZamboHa
12、HectareICTInformationandcommunicationstechno1.ogyI1.OInternationa1.1.abourOrganizationIPPIndependentpowerproducer1.CMS1.ivingConditionsMonitoringSurveyICU1.oca1.CurrencyUnits1.FC1.argecommercia1.farmUC1.ow-nmecountry1.MIC1.ower-midd1.e-incomecntry1.P1.aborproductivityMtMi1.1.iontonsNBFINon-bankfinan
13、cia1.institutionsPAYEPayasyouearnPPPPurchasingpowerparitySEZSpecia1.EconomicZoneSGRStrategicGrainReserveSMESma1.1.andmedium-sizedenterpriseSSASub-SaharanAfricaTFPTota1.factorProdUctMtyUMKUpper-midd1.e-incomecountryWDIWor1.dDeve1.opmentIndicatorsIEXECUTIVESUMMARYZambianeedstoincreaseproductivityandac
14、ce1.erateeconomictransformationtoachievesustainedandinc1.usivegrowth.Zambiasdebtreso1.utionandongoingreformsareexpectedtosupportmacroeconomicstabi1.ityandreigniteprivate-sectorinvestment.ByOctober2023,theGovernmentoftheRepub1.icofZambia(GRZ)reachedanagreementwiththeOfficia1.CreditorsCommittee(OCC)on
15、debtrestructuringundertheG20CommonFrameworkandzby1.ateMarch2024zitwasannouncedthatadea1.wasreachedwithbondho1.ders.Asoftheendofthefirstquarterof2024ztheZambianauthoritiesareinthefina1.phaseofdebtnegotiationsinvo1.vingtheotherprivate1.enders.Since2021.ftheGRZhas1.aunchedanambitiousreformprogram.Itsawtheprimaryba1.anceimproveby6.6percentagepointsin2022,bringingittoasurp1.usandcuttinginf1.ationbyha1.f.Theauthoritieshaveintroducedmeasurestoboostprivateinvestmentandhavereba1.ancedthecompositionofgovernmentspending.Butwhi1.etheeconomyisrecoverin