Approximately 50% of adults in rural areas are unbanked or have no access to financial services (Finscope Report 2015). Access to financial services has been a challenge due to various reasons, which among others include low population density in rural areas and extremely poor infrastructure, compounded by low productivity, making it difficult and expensive to provide such services. The importance of increasing access to financial services cannot be overemphasized because of the key role it plays in reducing poverty, increasing employment and attracting development. This can consequently help to bridge the rural-urban economic divide; with 77% poor people in rural areas compared to only 23% urban areas (Living Conditions Monitoring Survey,2015).

To this effect the Zambian Government developed the Rural Finance Policy and Strategy of 2012, a key policy document aimed at promoting access to financial services in rural areas and thereby reducing vulnerability and promoting prosperity of  the rural population. Some of the interventions/strategies that have been implemented by the Government as stated in the Rural Finance Policy and Strategy to promote access to financial services include the following among others:

1. Enactment of the Credit Reporting Act in 2018 to provide for the establishment of a Credit Registry and the overall governance and management of credit reporting agencies including the protection of data subjects as well as information sharing and reporting, to enable assessment of credit worthiness of data subjects.

2. Support efforts to enable inter-operability of the national payment switch to reduce the cost of financial services and modernize payment systems. The interoperability of payment systems was effected in 2019 and it is hoped that this will effectively facilitate better access to financial services for the unbanked in rural areas by  reducing costs of financial services and modernization of  payment systems.

3. Revision of the National Payment Systems Directives on Electronic Money Issuance. In 2018, the Bank of Zambia revised the National Payment Systems Directives on Electronic Money Issuance that were initially issued in 2015. The key changes to the directives included the following:

  • Permitting customers to hold multiple wallets.
  • Permitting both commercial banks and approved non-bank financial institutions to host Holding Accounts for electronic money.
  • Inclusion of specific guidance on the use of interest earned on Holding Accounts.
  • Provisions for consumer protection and the need for e-money institutions to have procedures for dealing with customer complaints.

Consequently, the volume of transactions processed on mobile money platforms in 2018 rose by 76.0% compared to 2017.

4. Support towards the implementation of micro-insurance products in the agriculture sector; In 2017, Government awarded Mayfair Insurance Company a contract to offer weather-based index insurance to all farmers who benefited from Government input subsidies through Farmer Input Supply Programme (FISP).

5. In September 2018, Government established the Rural Finance Unit to coordinate rural finance, under the Department of Investment and Debt Management at the Ministry of Finance (MoF).

6. In 2016, Government enacted the Movable Property Security Interest Act (MPSI) to Support efforts to fully establish unified collateral registry, including the use of movable property. The Act is aimed at making the business environment attractive for lenders to accept movable property as collateral. The MPSI Act seeks to make movable property a reliable form of collateral, thereby diversifying the nature of mobile assets used as collateral resulting in enhanced borrowing.

7. The Bank of Zambia has also been at the fore of promoting the Financial Literacy Week aimed at empowering people with knowledge on available financial products and services as well as creating momentum on both the supply and demand side information for the development of consumer-centric financial products and services.

RECOMMENDATIONS

In order to further upscale financial inclusion in rural areas specifically and the entire country generally, the following issues need to be addressed:

  • The Central Bank of Zambia needs to urgently develop Agency Banking Regulations to guide and accelerate agency banking in underserved rural areas and consequently increase the agency banking’s share of transaction volume by financial agents.
  • The Development Bank of Zambia needs to play an active role as an apex financial institution providing finances to micro-financial institutions for onward lending to rural areas as espoused in the Rural Finance Policy and Strategy and Rural Finance Expansion Programme (RUFEP) programme design.
  • Government and Zambia Agriculture Commodity Exchange (ZAMACE) needs to put in place measures that will guarantee smallholder farmers’ active participating in the agriculture commodity exchange as opposed to the current scenario where majority of farmers having access to the agriculture commodity exchange are well-established farmers.
  • The Pensions and Insurance Authority (PIA) needs to upscale its efforts in ensuring that the necessary micro-insurance guidelines/principles are promptly put in place to promote growth of insurance uptake in rural areas and the country at large. Additionally, legislation (Insurance Act) needs to be amended to accommodate licensing of micro-insurers and facilitate the opening up of the distribution space.
  • Following the enactment of Movable Property Security Interest (MPSI) Act in 2016, Patents and Companies Registration Agency (PACRA) and other stakeholders need to increase sensitization in rural communities on the new options available to smallholder farmers through MPSI Act regarding use of movable assets as collateral to access finance.
  • The Zambia Statistics Agency needs to include “financial inclusion variables” in its routine national surveys to be able to measure financial inclusion statistics as opposed to the country relying on private sector sanctioned surveys to measure financial inclusion.
  • The Ministry of Agriculture needs to decisively deal with complaints specifically relating to inconsistencies in Weather Insurance Index payouts where some farmers receive payouts while others do not, yet they are residing in the same geographical area affected by the drought. Enhanced confidence in Weather Insurance Index will enhance uptake of other micro-insurance products by farmers.
  • Some of the key activities during the Financial Literacy Week need to be extended to the rest of the year and priority should be given to rural areas with lower levels of financial inclusion.

Women constitute a heterogeneous group with different characteristics and unique qualities. Within groups of women it is important to be cautious of their positionalities and not assume homogeneity of the group (Akerkar, 2001). In society, various factors tend to converge to hinder women from participating in political processes such as policy formulation. These socio-economic factors include; levels of education, physical ability, age, location, race, culture, religion, sexual orientation and economic class. These factors cannot be considered in isolation as they are intersectional in nature. For instance, a middle-aged, middle-class woman with higher levels of education, living in a low-density urban area is more likely to participate in a policy formulation exercise in comparison to a middle-aged, working-class woman with lower levels of education residing in a high-density informal urban setting and facing some type of physical disability. Likewise, a woman who is a peasant farmer living in a rural area without basic education is less likely to assume she could influence policy. The individual characteristics and positionalities of the women in the contexts highlighted shape their perspectives differently. Thus, impacting their participation or lack of.  Policymakers need to take into consideration how these factors influence ones’ participation in policy formulation and find ways to reduce these barriers. Assuming that women have the same needs or face the same challenges could lead to poor participation levels among them and also under-plays the power and influence that some women wield over others.

Moreover, there are multiple factors that could hinder different women from participating in the policy-making discourse. These barriers could be structural in nature or agency barriers (William, 1992). Broadly, structural barriers are those that are embedded within systems or processes that may hinder an individual from exercising their free will or participating in certain tasks. Factors such as; lack of access to education or civic knowledge may prevent an individual from making informed decisions or, the systematic discrimination of women from partaking in socio-political debate based on their gender. Such barriers often entail political interventions such as law reforms or policy actions to facilitate the inclusion of marginalized women. While on the other hand, agency barriers are issues that an individual may experience at a personal level that limits their ability to exercise free will. For instance, the lack of confidence or willingness to participate in an activity are limitations to ones’ agency. These may be resolved through easier interventions such as capacity building, improving the civic knowledge of citizens or raising awareness on the importance of partaking in political processes.However, these barriers may not resonate with women in the same way since what may be relevant to some may not apply to others. Domingo et al. (2015) argue that, contextualizing the various factors could assist in resolving some constraints to an extent but may not provide a solution to all barriers. Firstly, women’s individual capabilities and resources could influence one’s participation. Similarly, socio-political, economic and cultural issues largely shape women’s experiences. As such, these experiences may have a push and pull effect. For instance, if one is more informed or has a certain level of education they are more likely to take an interest in political issues whether it affects them as an individual or as a collective. Conversely, women with poor civic knowledge may opt to shy away from participating in national issues.

Economic class also tends to pose a barrier for women to actively participate in policy issues thus, increasing their vulnerability and further undermining their interests. Enhancing women’s economic potential could accord them more social power and influence beyond the household and community level, further encouraging them to take an interest in national issues. Another barrier is culture and religion. Generally, women are socialized not to challenge the authority of men. Promoting a paradigm shift in society that appreciates and values women’s contributions could not only encourage women to participate but it may also lead to a more gender-inclusive and responsive policy system across all sectors. Thus, challenging various structural issues such as religious values, societal norms and culture is imperative in addressing some barriers that prevent women from exercising their agency.

ENABLERS OF WOMEN’S PARTICIPATION

Generally, women tend to feel more confident when they are in large numbers. Converging with other women that share similar interests may not only boost their confidence but it could also positively influence other women to participate in policy formulation. This could also accord them a safe space to consult, share knowledge and experiences with other women and increase their social power.

Similarly, raising civic and technical knowledge of women as well as the general education and access to information on political issues could contribute to the confidence needed to articulate and challenge policy discourse as well as actively participate. It could also raise their credibility, voice and influence thus giving them more status in society. Interventions such as facilitating trainings, mentoring and capacity building workshops targeted at women could help build their self-esteem, public speaking skills and self-awareness. Furthermore, the media plays a major role in how women are perceived. They act as agents of change but could also be potentially harmful to women’s representation in society. For instance, the media can perpetuate negative stereotypes about women or broadcast images that demean women’s character and strengths. Thus, improving how the media portrays women could influence how society responds to them and increase their confidence as active agents of development.

Additionally, addressing the intersectional issues that act as barriers for the participation of women is vital. For instance, educating women and capacitating them to train others on the importance of their participation could yield positive results. Similarly, engaging in strategic partnerships with various institutions that promote the empowerment of women could assist in engaging more grassroots women at community level. Moreover, strengthening partnerships with men as agents of change and dismantling gender stereotypes could influence change in how both genders perceive the participation of women. NGOs and CSOs are ideal strategic partners that aim at giving women a voice and often offer solidarity and a platform for women to express their needs and concerns on important national and personal issues affecting them. They also play a critical advocacy role in advancing the status of women. They act as important enablers of women’s inclusion and empowerment across various sectors of society.

Climate Change in Zambia has also negatively impacted the Zambian agricultural sector vis-à-vis an increase in the incidence of hunger due to destruction of crops, reduction in cultivatable land and increased soil erosion. On an economic outlook, the production of staple crops which include maize, millet, sorghum and rice has been dropping steadily in recent years.

According to the Crop Forecast for the 2018/19 Agriculture Season, maize production declined from 2,394,907 metric tonnes in 2017/18 farming season to 2,004,389 metric tonnes in 2018/19 accounting for 16% decline in production due to climate change effects that led to prolonged dry spells15. Out of the total production of maize small and medium scale farmers contributed 94.5% while large scale farmers took up 5.5%16.

Electricity is key to improving agriculture production, food security and boosting agribusinesses. Agriculture uses electricity to operate machinery and equipment, to heat or cool buildings, for lighting on the farm, for irrigation and indirectly in the production of fertilizers and other chemicals produced off the farm. The Seventh National Development Plan (7NDP) indicates that most rural parts of Zambia have low access to electricity and have poor road networks to attract investment and contribute effectively to diversification and job creation, especially in the agriculture sector17. The increased extent of load shedding to fifteen 15 hours a day is only worsening the state of vulnerability of rural farmers.

Farming has been highlighted as a significant contributor to climate change, but it has also been affected by negative effects such as the two main greenhouse gasses, methane and nitrous oxide, which are released in high amounts during crop and animal production. In aiming to reduce these greenhouse gasses, farmers need to adopt farming practices that will not harm nature or negatively affect the climate. These farming practices include Climate Smart Agriculture techniques such as Conservation Agriculture (CA). CA is an approach which includes a set of practices which conserve the soil, water, soil moisture, enhance fertilizer and seed use and in turn saves money and time.

When it comes to adaptation measures in the agricultural sector, since Climate Change is already When it comes to adaptation measures in the agricultural sector, since Climate Change is already running its course, the Zambian Government is urged to encourage more farmers to find means of improving sustainable agricultural practices. Data from the 2015 national representative Rural Household Survey, conducted by IAPRI found that only 8.8% of smallholder households adopted Conservation Agriculture (CA) as a climate smart agriculture technique in the 2013/’14 farming season18. The rates were however, slightly higher in areas that were affected by climate change effects such as the Agro-Ecological Zone I and II, in the southern parts of the country, where 11.7% of farmers adopted Conservation Agriculture as a climate smart technique19.

Average Annual Temperatures

The average number of ‘hot’ days per year in Zambia has increased by 43 (an additional 11.8% of days) between 1960 and 2003.The frequency of cold days and nights has decreased since 1960 in all seasons and the average number of ‘cold ‘days per year has decreased by 22 (6% of days) between 1960 and 200320. Figure 1 shows that the average temperature for each month in a calendar year has increased when comparing periods 1960-1990 and 1991-2016.

Average Annual Precipitation

Mean annual rainfall over Zambia has decreased by an average rate of 1.9 mm per month (2.3%) per decade since 1960. This is largely due to decreases in DecemberFebruary rainfall (or part of the wet season), which has decreased by 7.1 mm per month (3.5%) per decade21.

Figure 2 indicates that the average monthly precipitation for the months of September, October, November, December and February have reduced when comparing periods 1960-1990 and 1991-2016.

TOURISM SECTOR

According to a 2018 report by World Travel and Tourism Council, travel and tourism is Zambia’s fastest-growing national economic sector, contributing US$1,846.9MN (ZMK19.4 billion) to national economy and 318.9 thousand jobs to the Zambian economy in 2018 while posting a +6.3% Gross Domestic Product (GDP), making it the fastest and bullish economic sector in the country.

International visitors alone spent ZMK8.4 billion representing 8.3% of the total Zambian exports, and in terms of spending characteristics, the leisure sectors account for a total of 38% while business was at 62%. Domestic spending on tourism and travel stood at 47% while international spending was at 53%.7 The industry is estimated to create a total of 464.6 thousand jobs in 2019 with an estimated 1.1million expected international visitors in 2019.  This is according to the World Travel and Tourism Council’s annual review of the economic impact and social importance of the sector released this month, (World Travel and Tourism Council, 2019).

Zambia remains endowed with numerous tourism resources and attractions however, local tourism has still remained unsatisfactory. Further, the infrastructure, especially roads leading to the tourist sites, needs to be prioritized, in the infrastructure projects currently being implemented in the country. This applies to all the major tourism zones. There is immense potential for growth in the Tourism sector and the diversification effort  in the sector can be achieved by integrating the country’s rich cultural heritage into tourism packages beyond traditional ceremonies and promoting domestic tourism . With regards to foreign tourists, the aim must be to lengthen tourists stay to an average of six days from the current four days. These prospects would indeed promote growth in the Tourism sector and ensure increased contribution to GDP.

What has been planned to promote tourism?

  • Promoting tourism-related infrastructure is one strategy the Government intends to use to diversify the tourism sector.
  • The Government will develop, upgrade and rehabilitate roads, viewing loops and airstrips to and within the major national parks, namely Kafue, Lower Zambezi and the Mosi-oa-Tunya to efficiently interlink the major destinations in the southern tourism circuit and South Luangwa to prolong the tourism season from seven to 12 months per annum. 
  • The development of arts and culture infrastructure will also be supported, to improve the contribution of the country’s unique natural and cultural heritage to diversify the tourism product. Cultural villages that are currently undergoing construction will be completed.
  • The Government will also promote the development and expansion of non-traditional modes of tourism, such as eco- and agro-tourism and cultural and community-based tourism.

 

 

According to the Seventh National Development Plan of Zambia (2017-2021), the key sectors towards Economic Diversification include;

WHAT IS THE STATUS OF AGRICULTURE, LIVESTOCK, FISHERIES AND TOURISM sectors IN ECONOMIC DIVERSIFICATION

The Agriculture sector is very critical for achieving diversification, economic growth, and poverty reduction in Zambia. This sector is the fourth largest contributor to GDP and the largest contributor to employment. It contributes about 19 percent to GDP and employs majority share of the population. Family agriculture is the backbone of the rural economy and thus holds great potential for modernization due to its predominance.4

Given the potential for increased agricultural output and the importance of agriculture to the Zambian labor force, the Government is prioritizing agriculture as a means of driving diversified growth but the reality is that Agricultural output is far below what is possible. According to the  Zambia Development Agency (ZDA), 58% of Zambia’s land area has medium to high agricultural potential, but less than 20% of agricultural land is currently in use. Agriculture represents roughly 20% of total Zambian GDP and 10% of its total exports, yet it employs over 70% of Zambia’s population.5

Agriculture is very viable but has been with its challenges. The 2018/2019 farming season underscored the continued challenges of climate change and therefore the importance of risk mitigation and management measures. Addressing climate-related challenges requires the adoption of climate-smart agricultural technologies and practices. These are already being disseminated in the 2019/2020 farming season and will continue in the subsequent farming seasons. We also observe that in order to reduce dependency on rain-fed agriculture, Government is pursuing various irrigation development projects and an example is the Mwomboshi dam in Chisamba District which has been completed, while the irrigation scheme will be completed in 2020. There are other notable projects currently being developed. 

In relation to the FISP, Government is continuing with the implementation of the  Farmer Input Support Programme with 60% under direct input supply and 40% under the e-voucher system. Over 716,000 farmers accessed inputs under the e-voucher system. Further, around 5,800 agro-dealers throughout the country have been involved in the supply of agro-inputs. The challenge here is to reform the implementation and management of the Farmer Input Support Programme so as to cut the administrative costs as well as avoid wastage.

AWAY FROM MAIZE

For Instance, IGC (2018) reported that Investigations into the exports markets for sugar, coffee, and cotton showed increasing global demand for these commodities and that current preferential trade arrangements governing these markets are important for ensuring market access for Zambian products and subsequently increased income potential for producers in these subsectors. Lack of financing and high transactions costs have emerged as key cross-cutting constraints for all sub-sectors.6 Efforts to promote export diversification in these sectors, therefore, needs to focus on programmes that ease financial access particularly for small scale farmers, as well as promote investment in infrastructure that will reduce transaction costs of doing business in Zambia.

In the livestock sub-sector, the prevalence of animal diseases such as foot and mouth disease has negatively affected its performance in recent years. There exists several opportunities to grow this sub-sector and increase our production to export. New markets are also being pursued with the most recent one being the supply of goats to Saudi Arabia. To address this situation, Government is stepping up farmer sensitisation, vaccinations, movement restrictions, and enforcement of bio- security measures on farms. Further, construction and rehabilitation of dip tanks across the country has continued. Infrastructure development in this sector will also be key especially with the need to develop dipping tanks and breeding centres across the country.

Aquaculture also presents a viable opportunity for diversification. There is need to enhance capacity among fish farmers through training and mechanization. There should also be incentives to stimulate activity in this sector. Notable developments include the Zambia Aquaculture Enterprise Development Project which aims to train more than 1,000 farmers by 2022. Another development is the Fisheries Development Fund, but it still remains to be seen how much has been realized in this fund.  Therefore, to realize diversification in the Agriculture sector and promote growth, emphasis should be placed on agricultural diversification in crops, fisheries, livestock and forestry products based on comparative and competitive advantage of each product and agro-ecological zones.

The Coronavirus pandemic is a challenge that was not anticipated by the global economy.  At the dawn of the year 2020, nations planned their economic growth strategies with hope of attaining development but the pandemic is upon us and counter measures have since been instituted which are aimed at;  (1) protecting the health of the citizenry, (2) minimizing the spread of the virus as much as possible and (3) ensuring that the economy is shielded from adverse effects. As of April 6, 2020 there have been more than 1,275,037 COVID-19 cases reported globally with 69,501 deaths and 265,887 recoveries. Zambia has recorded 39 cases with 1 fatality and 5 recoveries.  The impact of the pandemic has been both extensive and severe, including but not limited to, a health and an economic strain characterized by financial market stress and a collapse in commodity prices in several countries. The outbreak has led to disruptions in supply chains, created uncertainties and significantly dampened near-term growth prospects. Around the world, the COVID-19 outbreak is putting significant strain on countries’ health-care systems, economies, and social fabric. The global economic damage from the COVID-19 pandemic is largely tangible and in response, nations have turned to fiscal and monetary policy adjustments among other measures to cushion the effect of COVID-19 on the economy. This has been coupled with other measures such as non-essential travel restrictions and cancellations of large gatherings coupled with a campaign for social distancing.

The 7th National Development Plan (2017-2021); under Pillar 4 clearly; provides guidelines on strengthening public health programmes in Zambia and commits towards investments in primary healthcare to strengthen the health system. The Plan emphasizes that primary health is the pillar of the health system and is central to preventing epidemics and controlling major infectious diseases among others. Anchoring on this, the Government has instituted several measures aimed at containing the spread of this scourge and as a nation, we have been informed of various strategic measures from the Republican President, the Minister of Health, the Minister of Finance and the Bank of Zambia; aimed at ensuring that the citizens and the economy are protected.

Some of the key measures that have been implemented include:

(A) The Fiscal Side

  • An Epidemic Preparedness Fund has been set up;
  • A COVID-19 contingency and Response Plan has been set up; and
  • To support the easing of liquidity, Government is to release K 2.5 billion and this is aimed at (a) reducing domestic arrears owed to domestic suppliers of goods and services (b) reducing outstanding arrears to pensioners and retirees (c) reducing outstanding third party arrears and other employee related commitments.

Tax Relief

In order to provide relief to businesses, Government will:

  1. Suspend excise duty on ethanol for use in alcohol-based sanitizers and other medical-related commodities;
  2. Remove provisions of SI 90 relating to claim of VAT on imported spare parts, lubricants and stationery to ease pressure on companies;
  3. Suspend export duties on the export of concentrates in the mining sector to ease pressure on the sector; and
  4. Suspend export duty on precious metals and crocodile skin.

The Monetary Side

To complement the measures taken by other arms of Government, the Bank of Zambia (BOZ) has put together a set of comprehensive measures to safeguard financial systems stability, promote the greater use of digital financial services and mitigate the negative effects of this shock to the economy.  BOZ has established a Targeted Medium-Term Refinancing Facility with an initial amount of K 10 billion to provide medium term liquidity. This is a 3 to 5 years facility that will be available to eligible Financial Service Providers (FSP) in the country to enable them to restructure of refinance qualifying facilities or on-lend to eligible clients. BOZ has also scaled up open market operations to promote short-term liquidity support to commercial banks on more flexible terms than those obtaining before the outbreak of COVID-19.

Handling of cash has also been discouraged at this point and this is timely in Zambia as we are witnessing a growth in digital financial services. The aim is to promote contactless mobile payment mechanisms aimed at preventing the spread of the disease by minimizing person-to-person contact, decongesting banks and other financial institutions.  Some of the measures that have been instituted to promote non-handling of cash include;

  1. Increasing transaction and wallet limits for individuals;
  2. Waving charges for person-to-person money transaction values of up to K 150 by all electronic money issuers; and
  3. Urging commercial banks to remove transfer fees on the bank account to electronic wallet transactions for an initial period of (3) months and to reduce the Merchant Discount Rate (MDR). MDR is a fee charged from a merchant by a bank for accepting payments from customers through credit and debit cards in their establishments.

Regional Strengthening Towards WinNing The COVID-19 Fight

Regional strengthening and coordination response is key towards winning the COVID-19 fight. In our view, this response must consider 3 elements; as follows;

  1. Public Health institutions in SADC must consider sharing information and resources, including data on the spread of the disease, details of their response plans, capabilities such as epidemiological modeling, and health-care equipment.
  2. Regional and sub regional institutions need to ensure that movement of food and essential supplies continues even if some borders are closed, since these actions will support food security and help minimize the disruption to economic activity along supply chains. We have recently observed this development and it is commendable.
  3. Governments and regional institutions must maintain their commitment to social progress, enhancing social safety nets including ensuring human rights and sustaining advances made on key sustainable development goals in the health sector.

We observe that the SADC Council of Ministers has commenced discussions on best practices. This is commendable and indeed a huge component of the three-dimensional approach and other institutions also need to follow suit so as to strengthen our concerted collaborative approach.

CONCLUSION

PMRC commends Government for the concerted efforts and measures that have been instituted this far to fight COVID-19.  As an Institution, we are also playing our part by collaborating with Government agencies to recommend implementation modalities to some of these measures. We are also contributing with widespread dissemination of information to increase awareness and also challenging the citizenry to play their part. It is also laudable that Government has ensured that movement of goods is not affected by putting in place logistics to allow for market reach. This among other things also reaffirms that agriculture production and marketing are uninterrupted in this difficult period. The Government is doing its part and this is, therefore, a call for all citizens to also be responsible and endeavor to adhere to all the guidelines as provided by the Ministry of Health. If we are to win this fight, we should endeavor to all come on board with our different institutional expertise, to complement efforts being led by the Government.  The citizens are therefore called upon to be responsible and support the Government efforts by exercising concentrated adherence to all provisions as stipulated.  Further, the Ministry of Labour has provided guidelines on how workers should be treated henceforth. It is understood that many sectors have been affected especially the Tourism, Aviation among others, which have resulted in workers being laid off temporarily. This is a call for the Government to continue engaging all heads of Institutions, Private Sector and Cooperating Partners to develop further strategies that will ensure that the workers are protected even as several businesses are facing difficult moments. This will ensure that households are also cushioned.  In conclusion, PMRC further calls for massive sensitizations so as to equip the citizenry with adequate information that will allow them to exhibit precaution and also contribute to flattening the curve. At this stage, we should employ all innovative mediums that will allow us to reach as many citizens as possible.

The Coronavirus is not just a public health crisis; it is a crisis that has affected every sector and therefore every institution and individual must be involved in the fight. Together we shall win

Mrs. Bernadette Deka-Zulu – PMRC Executive Director

INTRODUCTION

The Minister of Finance Hon. Bwalya Ng’andu on the 27th of March, 2020 updated the nation on the impact of the Coronavirus (COVID-19) on the Zambian Economy. The latest update from the World Health Organization indicated that over 470,000 confirmed cases had been recorded around the world with more than 20,000 deaths. In Zambia, 29 cases have been confirmed as positive as at 29th March 2020.

IMPACT ON THE GLOBAL ECONOMY

The Coronavirus pandemic poses the following impact on the global economy;

  1. Slow Down in Global Growth: Preliminary assessments by the International Monetary Fund (IMF) indicates a substantial slowdown in global economic growth in 2020 compared to 2019.
  2. Drag in Global Trade: Global trade has slowed down following closure of borders and the lock down in major economies.
  3. Plummeting of Commodity Prices: Commodity prices have drastically reduced. Copper prices opened the year at US$6,165 per metric tonne closed at US$4,754 per metric tonne as of Wednesday the 25th of March, 2020. Stocks on the London Stock Market have surged to about 225 thousand metric tonnes from about 145 thousand metric tonnes in January 2020.
  4. Capital Flight in the Financial Markets: The international economy has seen investors divesting their funds from traditional assets such as stocks to safe havens that include the US Dollar causing its appreciation against other currencies.

IMPACT OF COVID-19 ON THE ZAMBIAN ECONOMY

  1. GDP Growth: In the 2020 budget address, the Zambian economy growth rate was projected at 3.2%, which is now projected to be lower at around 2% due the challenge facing the economy.
  2. Tourism: Disruptions in international air transport have had an adverse effect on tourist arrivals. Some hotels and lodges have reported significant reductions in bed occupancy rates, to less than 20 percent from an average of 50 percent for the same period last year.
  3. Mining: Copper prices have declined by 23 percent to US$4,754 per metric tonne as at 25th March, 2020 from US$6,165 per metric tonne in January 2020.
  4. Fiscal Revenues under the 2020 budget are projected to be lower on account of the slowdown in economic activity. Collections under VAT, Customs Duties, Income Tax and Mineral Royalty are expected to decline. In February 2020, revenue and grants collections were recorded at K4.6 billion, which was 4 percent below the target. Collection from mining company tax and overall VAT were below target by 32 and 13 percent, respectively. Revenue collected in March 2020, stood at K2.7 billion against the target of K4.5 billion. The depreciation of the Kwacha against major currencies is resulting in higher debt service than programmed.
  5. Trade: COVID-19 has disrupted international trade in terms of both volumes and commodity prices. Collections of trade taxes are expected to be lower than projected in the first quarter of the year and most likely, beyond.
  6. Exchange Rate Depreciation:  The Kwacha has depreciated by more than 20 percent to around K17.50 per US dollar.
  7. Inflation: Annual inflation is projected to remain above the target range of 6-8 percent. Inflation for March 2020 stood at 14%.
  8. Financial Sector: The broader impact on the financial sector is likely to be observed with lags as the economy faces various challenges which translate into rising non-performing loans.

MEASURES TAKEN TO MITIGATE THE IMPACT OF COVID-19

These include:

  1. Funding towards COVID-19 Response

          Government has taken the following measures:

  • Set up an Epidemic Preparedness Fund under the Ministry of Health amounting to K57 million;
  • Cabinet approved a COVID-19 Contingency and Response Plan with a budget of K659 million under the Disaster Management and Mitigation Unit;
  • The Government is mobilizing funds through the budget and engagement with various local and international stakeholders.

     2. Resources available from Multilateral Organisations

  • Government is in the process of making applications to multilateral partner organisations for COVID-19 support.
  • The International Monetary Fund is making available a total of US$50 billion to affected countries via rapid disbursing emergency facilities while the World Bank Group has approved support of up to US$14 billion under a fast track COVID-19 Facility.

     3. Easing Liquidity

          Government will release K2.5 billion to:

  • Reduce domestic arrears owed to domestic suppliers of goods and services;
  • Reduce outstanding arrears to pensioners under Public Service Pension Fund and retirees under Ministry of Justice;
  • Reduce outstanding third-party arrears and other employee related commitments. In addition, K140 million will be released to pay local contractors in the road sector.

     4. Tax Relief

          Government will:

  • Suspend excise duty on imported ethanol for use in alcohol-based sanitisers and other medicine related activities subject to guidelines to be issued by ZRA;
  • Remove provisions of SI 90 relating to claim of VAT on imported spare parts, lubricants and stationery to ease pressure on companies;
  • Suspend import duties on the importation of concentrates in the mining sector to ease pressure on the sector;
  • Suspend export duty on precious metals and crocodile skin.

     5. Financial Sector Measures

          Government through the Bank of Zambia has taken measures to encourage the use of digital financial services. These are:

  • Waived charges for person to person electronic money transfers of up to K150. These transactions are now free of charge;
  • Revised upwards transactions and balance limits for individuals, small scale farmer and enterprises to give agents more float to deal with transactions. This is made to decongest banks;
  • Removed the transaction and balance limits on agents and corporate wallets; and
  • Reduced the processing fees for Real-Time Gross Settlement System;

         Government will issue an SI for Classification and Provisioning of Loans Directives to encourage financial service providers to provide relief to the private sector and facilitate long term lending to productive sectors of the economy.    

      6. Business Continuity

           Government has put in place measures to enable:

  • Continuity of its operations by making it possible for officers to work remotely in services such as; the Single Treasury Account, the Integrated Financial Management Information System (IFMIS) and Payroll Management and Establishment Control (PMEC).
  • The Minister of Commerce, Trade and Industry will work with the Ministry of Finance to engage major retail outlets to support local producers and domestic value chains of consumer goods.

The commitment of the current Government in promoting gender equity in its National Development Agenda is evident from the concrete steps taken by the leadership in ensuring ‘no one is left behind’  and expresses the conviction that boys and girls, men and women should benefit equally from development in Zambia. This has been demonstrated to a large extent by Government’s strong will and commitment to empowering women and the youth into high positions of responsibility in the public sector and the support provided to those in the private sector. It believes women are key stakeholders in decision making. They play a huge role in providing unique perspectives into various issues that not only impact their socio-economic spheres at individual level, but also at community and national development level. Women’s participation in the overall development agenda is not only a fundamental human right but it is also a marker of good governance. In spite all of this, gender power dynamics still shape many parts of society. Globally, women continue to be under-represented in formulation of national policies as well as in the political and economic decision-making spheres. Women’s participation in policy formulation is critical to achieving greater equality and giving women a voice in national issues.

Participation refers to the extent to which one’s voice is heard, respected and applied in decision-making, planning, implementation and monitoring of actions. Undermining women’s voices could lower levels of participation in policy formulation even further. There are several factors that converge to impede women’s participation in policy formulation. These factors can be intersectional in nature and recognizing how they influence each other is vital in addressing participation levels. These impediments could include but are not limited to: education levels of women, physical ability, age, culture, religion, location (i.e. rural/urban, high density/suburb), socio-economic class, among many others. Hence, it is important to take into consideration the factors that impede women’s participation during the policy formulation process in order to make the process more gender-inclusive and responsive.

Several regional and international instruments have been drawn to support women’s participation at various levels of decision making. These frameworks have been crucial in improving the status of women globally as well as in mainstreaming a rights-based approach in governance and policy discourse. Zambia is signatory to and has ratified conventions and frameworks that include; The Convention on the Elimination of all Forms of Discrimination Against Women (CEDAW), The Beijing Platform for Action, The Sustainable Development Goals, The Universal Declaration of Human Rights, The United Nation’s Framework Convention for Climate Change, The International Covenant on Civil and Political Rights, The International Conference on Population and Development, The Protocol on the Rights of Women in Africa, The SADC Gender Protocol among others.

Achieving gender equality across all sectors is a goal that Zambia aspires to. Over the years, some progress has been made in creating an inclusive labor force with policies such as Affirmative Action and the Labor Act that prevent the discrimination of women in accessing various fields of employment. More and more women have risen to top positions in their fields as well as in what were previously considered male-dominated work-spaces. However, women still face various challenges that prevent them from accelerating as fast as their male counterparts and in some cases having to put in more effort in order to gain recognition in some fields. The ‘glass-ceiling’ has continued to be a reality for many women. In Zambia, the Judiciary has taken progressive steps in appointing more women at top ranks. However, progress in the Public Service and Parliament has been relatively slow with men holding most of the top positions. For instance, in 2015 a female Chief Justice was appointed at the highest level of the judicial hierarchy. In addition, the number of women appointed as Judges is relatively proportional to that of men and has been increasing over the years. As of 2018, the gendered representation of the Judiciary was recorded as; Chief Justice 1 female with no male; judges 31 males and 32 females; magistrates 201 male while 105 were female. This represents a healthy gender-balance in the judicial system. However, there are more men appointed as magistrates than women which poses a challenge for achieving greater representation and equality at that level.  On the other hand, Parliament and the Public Service seem to be lagging behind in achieving greater equality as key players in policy formulation. The representation of members of Parliament by gender stands at; Men hold 81.9% of the seats in Parliament while women hold the remaining 18.1%. Similarly, in the Public Service, women holding various top positions stands at; Permanent Secretaries 13 out of 56 positions; Deputy Permanent Secretaries 2 out of 12; Directors 103 out of 344 and Head of Departments 722 out of 2319 positions. These statistics highlight the need for radical reform to increase the number of seats women hold in Parliament as well as at various decision-making positions in the Public Service.

It is vital to note that women can and do play an important role in policy formulation. These include: giving unique insight and experiences that could shape policy in a more holistic approach, highlighting the need to recognize social diversity in various policy issues brought to the fore, assist in advancing principals of equity, equality and social justice that shape policy, draw attention to women-specific issues that may be overlooked by other parties. There are several ways women can be empowered to participate in the policy formulation process. Generally, women tend to feel more confident when they are in large numbers. Converging with other women that share similar interests may not only boost their confidence but it could also positively influence other women to participate in policy formulation. Some enablers of women’s participation include: (i). Providing safe spaces to consult, share knowledge and experiences with other women and increase their social power, (ii). Increasing civic education, technical knowledge and skills of women as well as their general education, (iii). Improving access to information on political issues in order to boost the confidence needed to articulate and challenge policy discourse as well as actively participate (iv). Improve media outreach and influence to change perceptions on what roles women must play in the policy landscape (v). Strengthening partnerships with men as agents of change and dismantling gender stereotypes could influence change in how both genders perceive the participation of women. Non Governmental Organisations (NGOs) and Civil Society Organisations (CSOs) are ideal strategic partners that aim at giving women a voice and often offer solidarity and a platform for women to express their needs and concerns on important national and personal issues affecting them.

Recommendations

  1. PMRC proposes that Zambia adopts a customized quota system that will increase the representation of women in decision making as well as strategically place them in positions of power within party structures with increased exposure to leadership roles.
  2. There is need to raise civic awareness and increase access to information among women in order to advance their participation in policy discourse.
  3. Zambia must address the structural and intersectional barriers that impede women from exercising their agency on political issues to improve the participation of women and protect their overall interests.
  4. In view of implementing the quota system, Zambia needs to find ways of avoiding an artificial representation of women or tokenism across all sectors. It needs to ensure that women assert real power and influence in their respective capacities.

The commitment of the current Government in promoting gender equity in its National Development Agenda is evident from the concrete steps taken by the leadership in ensuring ‘no  one  is  left behind’  and expresses the conviction that boys and girls, men and women should benefit equally from development in Zambia. This has been demonstrated to a large extent by Government’s strong will and commitment to empowering women and the youth into high positions of responsibility in the public sector and the support provided to those in the private sector. It believes women are key stakeholders in decision making. They play a huge role in providing unique perspectives into various issues that not only impact their socio-economic spheres at individual level, but also at community and national development level. Women’s participation in the overall development agenda is not only a fundamental human right but it is also a marker of good governance. In spite all of this, gender power dynamics still shape many parts of society. Globally, women continue to be under-represented in formulation of national policies as well as in the political and economic decision-making spheres. Women’s participation in policy formulation is critical to achieving greater equality and giving women a voice in national issues.

Participation refers to the extent to which one’s voice is heard, respected and applied in decision-making, planning, implementation and monitoring of actions. Undermining women’s voices could lower levels of participation in policy formulation even further. There are several factors that converge to impede women’s participation in policy formulation. These factors can be intersectional in nature and recognizing how they influence each other is vital in addressing participation levels. These impediments could include but are not limited to: education levels of women, physical ability, age, culture, religion, location (i.e. rural/urban, high density/suburb), socio-economic class, among many others. Hence, it is important to take into consideration the factors that impede women’s participation during the policy formulation process in order to make the process more gender inclusive and responsive.

Several regional and international instruments have been drawn to support women’s participation at various levels of decision making. These frameworks have been crucial in improving the status of women globally as well as in mainstreaming a rights-based approach in governance and policy discourse. Zambia is signatory to and has ratified conventions and frameworks that include; The Convention on the Elimination of all Forms of Discrimination Against Women (CEDAW), The Beijing Platform for Action, The Sustainable Development Goals, The Universal Declaration of Human Rights, The United Nation’s Framework Convention for Climate Change, The International Covenant on Civil and Political Rights, The International Conference on Population and Development, The Protocol on the Rights of Women in Africa, The SADC Gender Protocol among others.

Achieving gender equality across all sectors is a goal that Zambia aspires to. Over the years, some progress has been made in creating an inclusive labor force with policies such as Affirmative Action and the Labor Act that prevent the discrimination of women in accessing various fields of employment. More and more women have risen to top positions in their fields as well as in what were previously considered male dominated work-spaces. However, women still face various challenges that prevent them from accelerating as fast as their male counterparts and in some cases having to put in more effort in order to gain recognition in some fields. The ‘glass-ceiling’ has continued to be a reality for many women. In Zambia, the Judiciary has taken progressive steps in appointing more women at top ranks. However, progress in the Public Service and Parliament has been relatively slow with men holding most of the top positions. For instance, in 2015 a female Chief Justice was appointed at the highest level of the judicial hierarchy. In addition, the number of women appointed as Judges is relatively proportional to that of men and has been increasing over the years. As of 2018, the gendered representation of the Judiciary was recorded as; Chief Justice 1 female with no male; judges 31 males and 32 females; magistrates 201 male while 105 were female. This represents a healthy gender-balance in the judicial system. However, there are more men appointed as magistrates than women which poses a challenge for achieving greater representation and equality at that level.  On the other hand, Parliament and the Public Service seem to be lagging behind in achieving greater equality as key players in policy formulation. The representation of members of Parliament by gender stands at; Men hold 81.9% of the seats in Parliament while women hold the remaining 18.1%. Similarly, in the Public Service, women holding various top positions stands at; Permanent Secretaries 13 out of 56 positions; Deputy Permanent Secretaries 2 out of 12; Directors 103 out of 344 and Head of Departments 722 out of 2319 positions. These statistics highlight the need for radical reform to increase the number of seats women hold in Parliament as well as at various decision making positions in the Public Service.

It is vital to note that women can and do play an important role in policy formulation. These include: giving unique insight and experiences that could shape policy in a more holistic approach, highlighting the need to recognize social diversity in various policy issues brought to the fore, assist in advancing principals of equity, equality and social justice that shape policy, draw attention to women-specific issues that may be overlooked by other parties. There are several ways women can be empowered to participate in the policy formulation process. Generally, women tend to feel more confident when they are in large numbers. Converging with other women that share similar interests may not only boost their confidence but it could also positively influence other women to participate in policy formulation. Some enablers of women’s participation include: (i). Providing safe spaces to consult, share knowledge and experiences with other women and increase their social power, (ii). Increasing civic education, technical knowledge and skills of women as well as their general education, (iii). Improving access to information on political issues in order to boost the confidence needed to articulate and challenge policy discourse as well as actively participate (iv). Improve media outreach and influence to change perceptions on what roles women must play in the policy landscape (v). Strengthening partnerships with men as agents of change and dismantling gender stereotypes could influence change in how both genders perceive the participation of women. Non Governmental Organisations (NGOs) and Civil Society Organisations (CSOs) are ideal strategic partners that aim at giving women a voice and often offer solidarity and a platform for women to express their needs and concerns on important national and personal issues affecting them.

Recommendations

  1. PMRC proposes that Zambia adopts a customized quota system that will increase the representation of women in decision making as well as strategically place them in positions of power within party structures with increased exposure to leadership roles.
  2. There is need to raise civic awareness and increase access to information among women in order to advance their participation in policy discourse.
  3. Zambia must address the structural and intersectional barriers that impede women from exercising their agency on political issues to improve the participation of women and protect their overall interests.
  4. In view of implementing the quota system, Zambia needs to find ways of avoiding an artificial representation of women or tokenism across all sectors. It needs to ensure that women assert real power and influence in their respective capacities.

Mrs. Bernadette Deka Zulu – PMRC Executive Director

Approximately 50%  of adults in rural areas are unbanked or have no access to financial services (Finscope Report 2015). Access to financial services has been a challenge due to various reasons, which among others include low population density in rural areas and extremely poor infrastructure, compounded by low productivity, making it difficult and expensive to provide such services. The importance of increasing access to financial services cannot be overemphasized because of the key role it plays in reducing poverty, increasing employment and attracting development. This can consequently help to bridge the rural-urban economic divide; with 77% poor people in rural areas compared to only 23% urban areas (Living Conditions Monitoring Survey,2015).

To this effect, the Zambian Government developed the Rural Finance Policy and Strategy of 2012, a key policy document aimed at promoting access to financial services in rural areas and thereby reducing vulnerability and promoting the prosperity of the rural population. Some of the interventions/strategies that have been implemented by the Government as stated in the Rural Finance Policy and Strategy to promote access to financial services include the following among others:

Enactment of the Credit Reporting Act in 2018 to provide for the establishment of a Credit Registry and the overall governance and management of credit reporting agencies including the protection of data subjects as well as information sharing and reporting, to enable assessment of the creditworthiness of data subjects.

Support efforts to enable interoperability of the national payment switch to reduce the cost of financial services and modernize payment systems. The interoperability of payment systems was effected in 2019 and it is hoped that this will effectively facilitate better access to financial services for the unbanked in rural areas by reducing costs of financial services and modernization of payment systems.

Revision of the National Payment Systems Directives on Electronic Money Issuance. In 2018, the Bank of Zambia revised the National Payment Systems Directives on Electronic Money Issuance that were initially issued in 2015. The key changes to the directives included the following:

Permitting customers to hold multiple wallets.

Permitting both commercial banks and approved non-bank financial institutions to host Holding Accounts for electronic money.

Inclusion of specific guidance on the use of interest earned on Holding Accounts.

Provisions for consumer protection and the need for e-money institutions to have procedures for dealing with customer complaints.

Consequently, the volume of transactions processed on mobile money platforms in 2018 rose by 76.0% compared to 2017.

Support towards the implementation of microinsurance products in the agriculture sector; In 2017, Government awarded Mayfair Insurance Company a contract to offer weather-based index insurance to all farmers who benefited from Government input subsidies through Farmer Input Supply Programme (FISP).

In September 2018, Government established the Rural Finance Unit to coordinate rural finance, under the Department of Investment and Debt Management at the Ministry of Finance (MoF).

In 2016, the Government enacted the Movable Property Security Interest Act (MPSI) to Support efforts to fully establish unified collateral registry, including the use of movable property. The Act is aimed at making the business environment attractive for lenders to accept movable property as collateral. The MPSI Act seeks to make movable property a reliable form of collateral, thereby diversifying the nature of mobile assets used as collateral resulting in enhanced borrowing.

he Bank of Zambia has also been at the fore of promoting the Financial Literacy Week aimed at empowering people with knowledge on available financial products and services as well as creating momentum on both the supply and demand-side information for the development of consumer-centric financial products and services.

RECOMMENDATIONS

In order to further upscale financial inclusion in rural areas specifically and the entire country generally, the following issues need to be addressed:

The Central Bank of Zambia needs to urgently develop Agency Banking Regulations to guide and accelerate agency banking in underserved rural areas and consequently increase the agency banking’s share of transaction volume by financial agents.

The Development Bank of Zambia needs to play an active role as an apex financial institution providing finances to micro-financial institutions for onward lending to rural areas as espoused in the Rural Finance Policy and Strategy and Rural Finance Expansion Programme (RUFEP) programme design.

Government and Zambia Agriculture Commodity Exchange (ZAMACE) needs to put in place measures that will guarantee smallholder farmers’ active participating in the agriculture commodity exchange as opposed to the current scenario where the majority of farmers having access to the agriculture commodity exchange are well-established farmers.

The Pensions and Insurance Authority (PIA) needs to upscale its efforts in ensuring that the necessary microinsurance guidelines/principles are promptly put in place to promote the growth of insurance uptake in rural areas and the country at large. Additionally, legislation (Insurance Act) needs to be amended to accommodate licensing of micro-insurers and facilitate the opening up of the distribution space.

Following the enactment of Movable Property Security Interest (MPSI) Act in 2016, Patents and Companies Registration Agency (PACRA) and other stakeholders need to increase sensitization in rural communities on the new options available to smallholder farmers through MPSI Act regarding use of movable assets as collateral to access finance.

The Zambia Statistics Agency needs to include “financial inclusion variables” in its routine national surveys to be able to measure financial inclusion statistics as opposed to the country relying on private sector sanctioned surveys to measure financial inclusion.

The Ministry of Agriculture needs to decisively deal with complaints specifically relating to inconsistences in Weather Insurance Index payouts where some farmers receive payouts while others do not, yet they are residing in the same geographical area affected by the drought. Enhanced confidence in Weather Insurance Index will enhance the uptake of other micro-insurance products by farmers.

Some of the key activities during the Financial Literacy Week need to be extended to the rest of the year and priority should be given to rural areas with lower levels of financial inclusion.