CONTENTS | ANB-BIA HOMEPAGE | WEEKLY NEWS
by Gideon Thole, Zambia, December 1999
THEME = DEBT
The Catholic Commission for Justice and Peace's (CCJP)
activity report
for the period October 1998 to July 1999,
indicates that the quality of life for the majority of Zambians
has deteriorated drastically
It is now estimated that 85% of Zambia's population live on less than US $1 a day and the remaining 15% on less than US $2 a day, with the rural areas being the worst hit.
The report states that the last year has been characterised by severe economic challenges and social retardation. "The fall in copper prices on the world market led to a 11% reduction in the contribution of the mining sector to the Gross Domestic Product (GDP).
Because of their dissatisfaction with Zambia's performance, most bilateral donors have withheld their balance of payments support. This has led to the depreciation in the value of the Kwacha, (Zambia's currency) by 69% over the year. "The ultimate consequences of the current economic situation has been abject poverty and hopelessness for many Zambians," continues the report.
During the year, inflation went up by 30.6%, while overall, the GDP fell by 2%; per capita income by 5% and there was a 2% decline in formal employment.
Economy analysts, says that Zambia's economic problems have been compounded by the country's external debt. Zambia, today, is suffocating under an external debt burden of US $6.5 billion and is among the most indebted countries in the world.
The CCJP says it was dismayed to see that in 1998, Zambia spent three times more in servicing its debt than it was able to allocate to primary education and health services.
"About 660,000 children of school-going-age are not able to attend school because they are not able to meet school requirements. The few who are lucky enough to get to school, lack basic learning aids, the report noted. Also, the much talked about health reforms have only succeeded in alienating many people from the health care programmes.
The Structural Adjustment Programme (SAP) has hurt the poor most of all. It has brought no relief to poverty, and despite having been religiously followed for almost ten years, now, the social conditions of Zambia's people, continues to deteriorate.
Zambia Independent Monitoring Team (ZIMT)'s president, Alfred Zulu, said the government should try to look for other solutions to Zambia's economic problems instead of continuing with SAP which has failed lamentably. "SAPs are measures that only serve to facilitate the country to be faithful to debt repayment. With its burden of over six billion dollars, there is no hope that Zambia can emerge from its current economic quagmire," he said.
Economists at the central bank (the Bank of Zambia) say economic activity has been lower than originally anticipated. A Bank of Zambia senior economist, Jacob Lushinga, said that for the period covering the remainder of the year, the authorities face a number of challenges, including expectations of higher inflation arising from increase in oil prices and electricity tariffs, plus uncertainties over further delays in the privatisation of the remaining assets of the Zambia Consolidated Copper Mines (ZCCM).
The increase in oil prices was further worsened when the Indeni oil refinery was gutted in May. Indeni is the country's only oil refinery and because it is still non-operational, has worsened Zambia's situation.
Lushinga says the government faces challenges in the successful implementing of its economic programme (the Enhanced Structure Adjustment Facility arrangement) and in stabilising the financial system which was being adversely affected by economic down turn.
He says to overcome these expected challenges, an appropriate tight monetary policy stance will continue to be pursued.
Zambia faces some tough days!
END
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