Countries around the world have come together to discuss tackling climate change at the 28^th Conference of the Parties to the United Nations Framework Convention on Climate Change commonly known as COP28 from the 30^th November to 12^th December 2023.  At COP 28 countries will be negotiating global goals for addressing climate change, present their individual countries’ plans for contributing to those goals, and report on their progress. One of the key topics of discussion at this year’s COP is fast-tracking a just, orderly and equitable energy transition. The energy transition concerns the shift from fossil fuels to renewable energy sources in an effort to reduce carbon emissions.

Zambia’s installed generation capacity is 3356.6 MW; this comprises 83 percent of hydro, 9 percent of coal, 5 percent of heavy fuel oil and 3 percent solar PV. The energy transition for Zambia involves shifting focus towards renewable energy sources such as solar, wind and geothermal and less dependence on fossil fuels. This move to transition away from fossil fuels which account for 14% of the country’s energy mix will be instrumental in reducing Greenhouse Gases. According to the United Nations, Fossil fuels are the largest contributor to global climate change, accounting for over 75 percent of global greenhouse gas emissions. The Government intends to reduce greenhouse gas emissions by at least 47 percent by 2030.

The energy transition will require accelerating renewable energy sources in the country. Only 31 percent of Zambians have access to electricity; with 67 percent of the urban population and only 4 percent of the rural population having access to power. There is need for the country to scale up its efforts to provide energy from sustainable and reliable sources. The country has relied so much on hydro power which has been affected by climate change creating energy shortages and thereby there is an urgent need to increase other renewable energy sources. Zambia has the potential to generate 2,300 MW of solar and 3,000 MW of wind, only 76 MW of solar has been installed and no wind power to date.[1]

According to the Ministry of Energy, policy and regulatory shortfalls, and financial and institutional barriers have affected the exploitation of Renewable Energy in the country. In addition, infrastructure remains an obstacle to Zambia’s electricity development, particularly in rural areas. The country’s energy infrastructure needs to be upgraded to support the integration of renewable energy technologies. While Government has made significant strides in promoting the development of renewable energies through policy and regulatory reforms there is still significant work that needs to be done for the country to attract meaningful investment in the sector.  

The energy transition will mean a greater demand for Zambia’s minerals as the country is endowed with minerals critical to making the transition a reality.  Minerals such as copper, lithium, nickel, and cobalt are essential components in clean energy technologies such as wind turbines, electric vehicles and solar cells. Due to the rising demand for these minerals, it is likely that there will be a boom in the prices of these minerals. Zambia stands to benefit from the anticipated price boom and increase revenue generation for the country. As Zambia seeks to benefit from the demand for transition metals, there is need to ensure that the mining sector is well governed as the mining projects increase. The extraction of these minerals should bring benefits to the citizens where they are mined while also safeguarding the environment. The sector should be transparent, socially responsible, and inclusive and contribute to sustainable economic development.

The energy transition must be “just” meaning that all groups in society should equally benefit from the transition and it should not come at the expense of certain groups. A key way in which energy justice can be fostered is through participation. The Government can support an inclusive, bottom-up engagement, where policy-makers prioritize the feedback from local communities on the suitability of energy project developments. In addition, investment in skills is key to realising the clean energy transition. A major scaling-up of training is required to develop a skilled workforce for the renewable energy and energy efficiency sectors. This will necessitate the development of completely new programmes of education, certification and vocational training.

The COP 28 reminds us that there is urgent need to accelerate the energy transition in the country and join the rest of the world in global climate action. Achieving this change will require support from all – Government, businesses and the public. The transition would ensure significant benefits to the environment, the economy and quality of life for people around the globe and for generations to come.

[1] https://www.theafricareport.com/278535/zambia-will-uae-cooperation-revive-solar-dream-after-world-bank-china-disappointments/

Zambia is one of the few countries with access to abundant resources such as water bodies, land, human capital and minerals. These resources have the potential to improve infrastructure and propel growth in the country’s key economic sectors, such as agriculture, mining and tourism. A country’s resource endowment refers to sources of economic prosperity for the country, such as minerals, land, capital, business enterprise, equipment and labor resources. Devolution involves transferring power from the central government to local or regional administrations, increasing citizen participation in decision-making and service delivery. With one of the world’s highest-grade copper resources, Zambia is the seventh-largest copper producer as of 2022. Effectively managed natural resource endowments offer opportunities for growth and development. The African Development Bank found that resource-rich nations underperformed compared to their resource-poor counterparts. This article attempts to explain how Zambia can best realize its potential in diverse sectors with a devolution style of decentralization.

The agriculture industry is crucial for economic growth in both developed and emerging countries and according to a report by the Word Bank in 2020, Zambia had approximately 3,800,000 hectares of arable land. With the implementation of devolution, which will allow local governments to carry out projects of their choice, this resource can be utilised. Local governments can mobilize income from existing sources, such as farming, to support cash-generating crops like potatoes, sugarcane, soybeans, rice, wheat, cassava, and cotton. The Maputo Declaration on Agriculture and Food Security, which calls for commitment to spending at least 10% of public funds on agriculture, is one of the international standards Zambia has formally committed to. However, 6.7% of the 2023 national budget resources were allocated to agriculture against the ideal 10% to meet international standards (Maputo Declaration), more funds must be channelled to the sector. A sufficient allocation of resources (10% of public funds) would encourage specialization and crop diversification, creating jobs and improving Zambia’s trade balance through agricultural exports.

Local government entities can promote tourism by advertising in their jurisdictions, drawing tourists from domestic and global markets. This not only promotes the region’s natural resources but also culture and heritage. Advertising plays a crucial role in acquainting potential visitors with the area. Additionally, investing in recreation facilities like swimming pools, play areas, tennis courts, community gardens, zoos and wildlife sanctuaries can generate income and create jobs within communities. Thus, local authorities should consider investing in such infrastructure at district level.

Zambia still faces significant infrastructure development challenges, including roads, health, education, water, and sanitation. Investment in these areas is crucial for growth, economic diversification, and human development. Council lodges can promote competition, service improvement, and employment opportunities, benefiting the housing and infrastructure industries.

Zambia’s mining sector faces challenges in finance, especially for artisanal and small-scale miners. Empowering women and youth through cooperatives can lead to increased profits and community contributions. This can involve financial support, mineral extraction skills development and simplified license application processes. Licenses can reduce fatalities and encourage more youth involvement thus boosting human capital.

The transportation sector can generate income by introducing public buses, allowing local authorities to capitalize on transportation challenges. If managing the business is challenging, they can rent buses to interested parties, and thus generating income from the service. For example, in Namibia, urban road networks are managed by local authorities and regional councils. In addition, a report in April of 2014 by Fortune of Africa disclosed that Windhoek has a municipal bus service with 79 buses for public transport. Despite the private sector’s reluctance to capitalize on this subsector, local authorities should offer transportation and food services, especially in remote areas.

Devolution ensures that resources are brought closer to the populace, allowing for local decisions and expenditures. Each constituency has the potential to develop by exploring natural resources and converting them into revenue streams. Devolution in Zambia has the potential to unlock its potential by offering benefits and exploiting various sectors by local authorities. Therefore, in order to better serve its populace and utilise the natural endowments of its territories;

• PMRC urges local authorities to prioritize simple, economical projects through integrated district plans and leveraging their competitive advantage.
• Local Governments should prioritize the populace’s needs in projects and decision-making, boosting citizen participation, particularly among women and youth.
• Finally, the Government is urged to support local authorities, especially new and emerging councils, to transform economically through devolution and increase economic viability.

Since the piloting of the Social Cash Transfer (SCT) programme in Kalomo in 2003, the programme has gained momentum and has shown strong positive impacts on the livelihoods of beneficiaries, particularly women and children who make up a significant section of the vulnerable in society. The programme has been scaled up over the years, growing from a target of about 700,000 beneficiaries to over a million. With the support of cooperating partners, Government has been implementing the programme to address high levels of vulnerabilities among key populations. These interventions are aimed at reducing the multiple vulnerabilities faced by the most destitute and incapacitated households in society to meet their basic needs, particularly on health, education and food security.

Over the years, an array of programmes have been added and are being implemented alongside SCT, providing an additional layer of social protection options to adequately respond to the vulnerabilities of various groups targeting different forms of vulnerabilities. A more recent pilot, targeting pregnant women, lactating mothers and children below the age of 24 months with the support from UNICEF in Western province is being implemented as part of the Cashplus Programme to improve nutrition in the first critical 1000 days. About 1,723 mother households have been targeted in Kalabo district of Western province and beneficiaries for this project receive K400.00 plus a nutrition top up amount of K150.00, bringing the total to K550.00 bimonthly while beneficiaries who are already on SCT receive a nutrition top-up of K150. Initiatives such as these, when implemented alongside SCT, play a pivotal role in reducing the multiple layers of vulnerability and expanding protection for the most marginalized Zambians.

Further, the impact on households receiving SCT is immense. An impact evaluation carried out between 2010 and 2014 found that the cash transfers improved all socio-economic indicators: schooling, health, general well-being, possession of shoes and blankets, and the regularity of meals. It was revealed that families were able to meet PTA fees, access health services and improve food security and nutrition (afford more than one meal per day). Findings from the Auditor General’s Report on Social Cash Transfer for the period 2014-2017 also indicate that SCT has helped with increasing the number of households owning assets such as bicycles, beds, chairs, radios as well as improved their dwellings from roof thatched houses to iron roofs and concrete blocks. Similarly, household assets had increased due to investment in small livestock such as chickens and goats from, which families could sell to send their children to school. Households were also able to hire labour for tilling their fields. In addition, it has been observed that there is a multiplier effect of the transfers in communities, adding between 49 and 69 Ngwee in value to every Kwacha transferred. Through spill-over effects, the SCTs have been instrumental in strengthening communities through improved social cohesion as households become actively involved in community economic activities. Beneficiaries are also able to contribute to the growth of their local economy, in that purchases for basic needs are made within their communities.

In view of the socio-economic benefits that the programme has demonstrated, there is need to strengthen this impact by providing an adequate legal framework that enshrines social protection as a basic human right to conform to a right’s-based approach in order to align with best practice through the enactment of social protection legislation that makes social protection justiciable. Countries such as South Africa and Kenya have enshrined these laws in their Constitutions, thereby making social protection a basic right that can be demanded by any citizen needing social protection and is justiciable. In the case of Zambia, social protection has been institutionalised and integrated in policy through the National Social Protection Policy and National Development Plans, however, citizens still cannot hold any office bearers to account for failure to implement these policies as is the case in South Africa. Therefore, law reforms surrounding social protection should be focused on aligning to best practice in order to adequately improve the livelihoods of the vulnerable in society.

On the 17th of April 2023, President Hichilema signed into law the National Pension Scheme Authority (Amendment) Bill of 2023, which allows for the partial withdrawal of pensions. This legislation marks a significant milestone in Zambia’s social security system, as it provides more flexibility for contributors to access their pension savings. This article highlights the implications of the amendment on partial withdrawal and its potential impact on the pension scheme and the Zambian economy.

The law now facilitates the withdrawal of a portion of a contributor’s pension savings before reaching the retirement age of 55 years. The new legislation permits partial withdrawal for contributors who have contributed to the scheme for at least five years (at least sixty contributions). The amount that can be withdrawn is limited to a maximum of 20% of the total balance, and the contributor can only make one partial withdrawal.  This is a significant point to note – the one-off nature of the withdrawal places a responsibility on the contributor to ensure that use of the sum withdrawn is for their maximum benefit.

This legislative reform is a significant development in the social security system as it provides contributors with more flexibility and control over their pension savings early in their work life. The ability to access a portion of their savings before reaching retirement age can be beneficial to contributors – use can be applied to financial needs, such as medical emergencies, education expenses, or housing needs. Further, partial pension withdrawal can serve as a source of capital for individuals who wish to start or expand their businesses. This will invigorate and promote entrepreneurship and business development, leading to the creation of new jobs and ultimately economic growth. Small and Medium-sized Enterprises (SMEs) are often considered the engines of economic growth, and access to pension funds can provide a valuable source of income for such enterprises.

The NAPSA (Amendment) Act of 2023 on partial withdrawal has potential implications for the pension scheme and the economy of Zambia. On the one hand, partial withdrawal may lead to a reduction in the total amount of savings that contributors accumulate over time, which could impact the sustainability of the pension scheme. However this is subject to further analysis over time. On the other hand, partial withdrawal may encourage greater compliance to the scheme, as it provides citizens’ with more flexibility and control over their savings. This, in turn, could increase the pool of pension savings and potentially stimulate the economy by providing more long-term funding for sustainable investments.

Furthermore, the NAPSA (Amendment) Act on partial withdrawal is consistent with global trends in social security systems, where there is a move towards greater flexibility and customization for contributors. Countries like South Africa have already introduced partial withdrawal options in their pension schemes, and Zambia’s move in this direction is a step towards aligning with global best practices. The introduction of partial withdrawal may also improve the overall perception of the pension scheme among the public, as it demonstrates a willingness to respond to the needs of contributors.

In conclusion, Government’s signing into law of the NAPSA Bill on partial withdrawal is a significant development in the social security system of Zambia. The legislation provides contributors with more flexibility and control over their pension savings, while also potentially stimulating the economy by increasing the pool of pension savings as well as individual citizen’s investment into various economic ventures that could spur job creation and improve household incomes. The introduction of partial withdrawal is consistent with global trends in social security systems and demonstrates a commitment to improving the overall perception of the pension scheme among the public. However, careful monitoring of the impact of partial withdrawal on the sustainability of the pension scheme is necessary to ensure its long-term viability.

By Emmanuel Mumba – PMRC Research Assistant

The economic prospect for Zambia is in recovery mode, having experienced a wave of financial and economic deterioration in the last decades, which, together with the adverse effects of the COVID-19 pandemic, that saw the country default on its Euro bond payments in 2020. The World Bank projects the economy to grow by 3.8% between 2022 to 2024. Critical to this projection which forms the basis of this article, include; a stable macroeconomic framework, predictable mining regime, positive copper price outlook, improved balance of payments and trade openness.

It is well documented that Zambia is comparatively located geographically. However, the country has not advanced itself to realise this potential. Against this background, the government has embarked on an economic agenda to reconfigure the country’s growth framework and has identified regional economic linkages as critical drivers. Among other economic linkages is the Walvis Bay-Ndola-Lubumbashi Development Corridor, a market topology linking Namibia, Zambia and the Democratic Republic of Congo (DRC). The significance of this development corridor is that Zambia already enjoys favourable trade balances with Namibia and DRC. Therefore, this lays a proper foundation for the country not only to scale up its trade volume with the two countries but also extend its footprints beyond Africa. However, critical to this depends on how the country essentially leverages its stable macroeconomic framework to attract the much needed private sector investment necessary to scale up production in the manufacturing value chain. The Foreign Private Investment & Perceptions Survey (2021) revealed that political stability and good governance environment are major determinants of the private sector investment influx in Zambia.  Further, the expended trade volume prospects will also depend on how the country leverages its agricultural potential. Empirically, aside from having favourable weather conditions suitable for a variety of crops, Zambia accounts for about 60% of natural water bodies in southern Africa, thus, making it better positioned to circumvent different acute climate patterns on crop productivity through irrigation schemes as compared to other countries in the region.  Further, the unfortunate food insecurity in the DRC establishes a natural demand for the country’s agricultural outputs, for which the supply has remained low.

Zambia exported US$1.35B to Namibia in 2020, representing a 37.7% annualised rate increase from US$2.24M in 2000. The major products included Raw Copper at US$1.15B, Refined Copper at US$126M, and Electricity at $46M. Meanwhile, Namibia exported US$226M worth of merchandise to Zambia, translating to about 28.2% annualised increase from $1.58M in 2000. The main exports included Non-Fillet Frozen Fish at US$70.9M, Acrylic Polymers at US$35.3M, and Steel Bars at US$32.1M.  Regarding trade directions with the DRC, Zambia exported $952M worth of products to that country (about 15.4% annualized rate increase from $26.6M in 1995). This included Sulphuric Acid at US$96.9M, Copper Ore at US$87M, and Quicklime at US$66.7M, among others. Similarly, the Democratic Republic of the Congo exported US$372M to Zambia in 2020 (about 20% annualized rate increase from US$3.88M in 1995).  The main products included Refined Copper at US$290M, Copper Ore at US$65.9M and Cobalt Oxides and Hydroxides at US$8.13M.

Therefore, for the country to fully harness and expand its export volumes with Namibia, DRC and beyond, as mentioned earlier, PMRC urges the Government to continue on a policy trajectory of maintaining stable macroeconomic frameworks for the private sector to flourish. In turn, this will advance the investment attractability of the country in key sectors such as mining and manufacturing.  Further, agricultural comparativeness, which the country enjoys, should be utilized and buoyed with increased investments in crop productivity and irrigation schemes.