Zambia Trade Performance Reviews (TPR)

Trade Performance Review 2007: Chapter 3: Zambia

Year of publication: 
2007
Author(s): 
Dale Mudenda, University of Zambia
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A review of Zambia's trade performance for 2000-2005 revealed that its exports more than doubled – from US$853m in 2000 to US$1.8bn in 2005 – while its imports trebled, from US$864m to US$2.6bn. Most of Zambia's exports were absorbed by the SADC region, which had a 40% share of total exports, followed by the rest of Europe with a 28% share, the EU with a 24% share and Asia with a 6% share. South Africa, the DRC, Zimbabwe, Tanzania and Malawi were the main destinations for exports within the SADC region.

Copper remained Zambia's main foreign exchange earner for the review period, although its contribution dropped from 72% of total export earnings in 2000 to 65% in 2005. The share of NTEs within Zambia's trade basket increased as a result of the increased exports of copper products, such as copper wires and copper rods, along with the partial success of the government's diversification programme and the increased demand for Zambian goods regionally and internationally.

The Zambian government has adopted a trade policy that is viewed as a poverty reduction tool. With improving metal prices, as well as production and NTE prices, the performance of Zambia's export sector is poised to continue growing. In addition, the government, with the assistance of cooperating partners, has initiated a public-private partnership-driven export promotion strategy, which is envisaged to assist the country in further improving its export performance.
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Intra-SADC Trade Performance Review 2006: Chapter 8: Zambia

Year of publication: 
2006
Author(s): 
Dale Mudenda, University of Zambia
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From the 1990s onwards, Zambia has experienced improved macroeconomic conditions. Since 1974, the country’s economy has registered positive economic growth rates and, in the period 2000-2005, those rates averaged at 4%. Overall, Zambia’s inflation rates declined and its exchange rates stabilised, while its external debt dropped from US$7.1bn in 2002 to less than US$500m in 2006. That massive decline was the result of debt forgiveness associated with the country’s qualification under the HIPC initiative.

Despite the country’s successes, two-thirds (68%) of the populace continue to live on less than a dollar a day. Zambia faces a number of export market access problems linked to technical barriers to entry. This is the case for Zambian sugar exports to the SADC and the EU regions, which are limited by quotas, and for other goods, such as cotton, which need to be processed only up to a specified level to enter in these markets.

Trade Performance Review 2005: Zambia

Year of publication: 
2005
Author(s): 
Inyambo Mwanawina
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Zambia's trade balance remained unfavourable from 1999 to 2003, despite the religious implementation of the stabilisation and structural adjustment programme since 1991 under the support of the International Monetary Fund, World Bank and bilateral donors. Export earnings declined by an average of -0.1% while imports increased by an average 20% annually over the same period with the trade balance deteriorating from US$274 million in 1999 to -US$601 million in 2003 as reflected in Table 1. The country's macroeconomic policy focused on reaching the decision and completion points of the enhanced highly indebted poor countries initiative of demand restraint and ensuring the attainment of the IMF/World Bank quantitative benchmarks and performance criteria. Demand restraint focused at improving both the fiscal balance and external position through curtailing public sector spending by targeting a budget deficit of 1.55% of GDP for 2003. However, the country went out of line with the IMF/World Bank programme and was subsequently placed under an IMF staff monitored programme due to the high fiscal deficit, which put excessive pressure on both money supply and the exchange rate. The situation was further exacerbated by maize imports in 2001 and high oil prices in 2003.

Zambia's trade with SA and the rest of SADC has also remained unfavourable, with SA trade being worst off. Exports to SA grew slower than imports (at an average of 13% compared to 22%) over the period, resulting in a worsening trade balance of -US$544m in 2003 compared to -US$189m in 1999. While trade with the rest of SADC is relatively small, the trend seen in table 1 is somewhat encouraging, with exports increasing by an average of 27%, performing marginally better than imports by a percentage point. The rapid reductions of trade tariffs in Zambia compared to its trading partners, coupled with the simultaneous liberalisation of both the current and capital accounts as well as poor infrastructure, could provide further explanation for the unfavourable external trade outcome.

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