世界发展银行-Zambia-Economic-Brief,-No.-12,-July-2019-_-Wealth-Beyond-Mining---Leveraging-Renewable-Natural-Capital_54页_3mb

ZAMBIA ECONOMIC BRIEF SUMMARY

Core Content

This report, WEALTH BEYOND MINING: LEVERAGING RENEWABLE NATURAL CAPITAL, is the 12th Zambia Economic Brief published by the World Bank Group. It provides an analysis of recent economic developments in Zambia and explores the potential of leveraging renewable natural capital for sustainable development.

Main Economic Developments

Regional Economic Trends

• Sub-Saharan Africa (SSA): Economic recovery in 2018 was modest, with GDP growth estimated at 2.3%.
• Drivers: Growth was primarily driven by the services sector, but constrained by poor agricultural performance, lower copper prices, and macrofiscal challenges.
• Outlook: Growth is expected to improve to 2.8% in 2019 and 3.3% in 2020, supported by increased agricultural and mining production and reduced policy uncertainty.
• Risks: External risks include trade tensions, tighter monetary policies in advanced economies, and slower growth in China and the Euro area. Domestic risks involve fiscal slippages, delayed reforms, and prolonged El Niño weather patterns.

Zambian Economy in 2018

• GDP Growth: 3.7% in 2018, up from 3.5% in 2017, driven by strong performance in services, pensions, and information and communication.
• Fiscal Performance: The FY18 fiscal outturn was more expansionary than budgeted, with domestic revenue 7.6% above the budget and total spending 8% over budget.
• Debt and Deficit: The fiscal deficit reached 10.0% of GDP (on commitment basis) and 7.5% of GDP (on cash basis), up from 4.3% and 6.1% in 2017 respectively.
• External Imbalances: The current account balance worsened from a 1.5% deficit to a 2.6% deficit of GDP in 2018, with official reserves declining to $1.6 billion by end-December 2018.
• Public Debt: External public and publicly guaranteed debt reached 43% of GDP, and total public and publicly guaranteed debt increased to 73.1% of GDP in 2018.

Key Findings and Policy Implications

Sustainable Development and Natural Capital

• Total Wealth: Zambia's total wealth more than doubled from 2000 to 2014, reaching $644 billion.
• Composition: In 2014, wealth was composed of 43% human capital, 40% natural capital, 17% produced capital, and -0.1% net foreign assets.
• Renewable Natural Capital: In 2014, renewable natural capital accounted for 73% of total natural capital, with significant contributions from protected areas, pastureland, cropland, and forests.
• Adjusted Net Savings (ANS): ANS was negative from 1990 to 2003, but turned positive from 2004 to 2016, indicating improved investment in future assets.
• Challenges: Despite growth, the composition of wealth suggests limited diversification, and the depletion of non-renewable resources has not been fully offset by investments in other capital.

Natural Capital and Economic Potential

• Renewable Natural Capital Importance: Natural capital constitutes a significant portion of total wealth for most emerging and developing economies, including Zambia.
• Water Management: Zambia is underutilizing its water resources, with per capita water withdrawal at 3 times lower than the developing countries' average and 2 times lower than the SSA average.
• Agriculture and Forestry: The agriculture and forestry sectors contribute more to the economy than captured in GDP, and their integration with other sectors (e.g., mining, construction) is vital.
• Opportunities: Expanding markets for nontimber products and tourism can generate high economic returns without deforestation. Beekeeping, for instance, has potential to increase export earnings and employment, with bees wax being competitive with copper on the international market.

Policy Recommendations

• Fiscal Consolidation: Accelerate fiscal consolidation to reduce debt distress and create fiscal space for inclusive growth.
• Debt Management: Strengthen debt management to reduce the debt service burden and improve transparency.
• FX Reserves: Rebuild foreign exchange reserves to support external stability.
• ZESCO Reforms: Implement urgent reforms to improve the financial and operational sustainability of ZESCO and ensure reliable electricity supply.
• Renewable Capital Utilization: Invest in renewable natural capital to promote sustainable growth, including improving agricultural yields, managing water resources more efficiently, and diversifying the economy.

Conclusion

Zambia's economy, historically reliant on extractive industries, needs to shift towards a more sustainable and inclusive growth model by leveraging its renewable natural capital. This includes improving the management of water, forests, and agricultural land to support long-term economic stability and development. The report emphasizes the importance of integrating natural capital into economic planning and highlights the need for policy reforms and investments to ensure sustainable use of resources.