Zambia Managing Water for Sustainable Growth and Poverty Reduction

A COUNTRY WATER RESOURCES ASSISTANCE STRATEGY FOR ZAMBIA

Zambia Public Disclosure Authorized Managing Water THE WORLD BANK 1818 H St. NW Washington, D.C. 20433 for Sustainable Growth and Poverty Reduction Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized

THE WORLD BANK

Zambia Managing Water for Sustainable Growth and Poverty Reduction

A Country Water Resources Assistance Strategy for Zambia

August 2009

THE WORLD BANK Water Resources Management Africa Region © 2009 The International Bank for Reconstruction and Development/The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: [email protected]

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Cover photos: Marcus Wishart, Peter Sheppard, and Iris Dueker

ii Contents

Abbreviations and Acronyms...... v

Acknowledgements...... vii

Executive Summary...... ix

1. Introduction...... 1 Zambia’s Development Objectives...... 1 World Bank Country Water Resources Assistance Strategy...... 2

2. Zambia’s Water Resources: Abundance and Vulnerability...... 5 Surface Water Resources...... 5 Climatic and Hydrological Variability...... 7 Groundwater...... 9 Water Quality...... 10

3. Water and the Zambian Economy: Risk and Opportunity...... 13 Water Resources and Key Economic Sectors...... 13 Irrigation...... 13 Hydropower...... 17 Water Supply and Sanitation...... 20 Environment and Nature Based Tourism...... 23 Fisheries...... 25 Economic Impacts of Hydrological Variability...... 26 Rainfall Variability Impact on GDP...... 27 Rainfall Variability and Agricultural Growth...... 28 Rainfall Variability and Poverty...... 29 Impact of Severe Droughts and Floods...... 29

4. Capitalizing on Opportunities and Overcoming Constraints: Priority Responses...... 33 Addressing Zambia’s Water Scarcity: Underlying Principles...... 33 Priority Areas for Water Investments in Zambia...... 35 Building Legal, Policy and Institutional Frameworks...... 35 Small Scale Water Development for Reducing Rural Poverty...... 38 Ensuring Economically Efficient Water Allocation: The Case of the Kafue River Basin...... 39 Addressing Environmental Sustainability in the Copperbelt...... 41 International Water Management...... 41 Developing the Knowledge Base in the Water Sector...... 44

iii Zambia: Managing Water for Sustainable Growth and Poverty Reduction

5. The Bank and Zambia’s Water Resources Sector: Priority Interventions...... 47 Past Bank Involvement and Lessons Learnt...... 47 Principles for Bank Involvement...... 48 Proposed Areas of Interventions...... 50 A. Multi-purpose Small Scale Water Resources Development...... 51 B. Protecting and Developing Water Supplies...... 52 C. Itezhi Tezhi Dam Safety and Capacity...... 52 D. Water Resources Planning and Development...... 53 E. Water Resources Assessment and Scientific Services...... 54 F. Transboundary Water Resources Management...... 54 Success Factors and Risks...... 55

Annex A. FNDP Water and Sanitation Program...... 57

Annex B. Options for Water Resources Development in the Kafue Basin...... 61

Annex C. Groundwater as a Source of Water for Copperbelt Towns...... 67

Annex D. Technical Notes on Modeling Economy-wide Impacts of Rainfall Variability in Zambia...... 69

Annex E. Rapid Resource Assessment of the Kafue River Basin...... 73

iv Abbreviations and Acronyms

AfDB African Development Bank AWC Available Water Capacity CAADP Comprehensive African Agricultural Development Program CAS Country Assistance Strategy CBA Cost Benefit Analysis CEP Copperbelt Environment Project CGE Computable General Equilibrium CU Commercial Utility CV Coefficient Variation CWRAS Country Water Resources Assistance Strategy DANIDA Danish International Development Agency DCGE Dynamic Computable General Equilibrium DED Deutschen Entwicklungsdienstes DRC Democratic Republic of Congo DWA Department of Water Affairs ECZ Environmental Council of Zambia EIRR Economic Internal Rate of Return ET Evapotranspiration EU European Union FAO Food and Agriculture Organization FNDP Fifth National Development Plan GDP Gross Domestic Product GTZ Deutsche Gesellschaft für Technische Zusammenarbeit HC Hydrocrop Model HIPC Highly Indebted Poor Countries IBRD International Bank for Reconstruction and Development IDA International Development Association IFC International Finance Corporation IFPRI International Food Policy Research Institute IMF International Monetary Fund IPCC Intergovernmental Panel on Climate Change ITT Itezhi Tezhi Dam IUCN International Union for Conservation of Nature IWRM Integrated Water Resources Management IWRM&WE IP Integrated Water Resources Management and Implementation Plan JASZ Joint Assistance Strategy for Zambia JICA Japan International Cooperation Agency

v Zambia: Managing Water for Sustainable Growth and Poverty Reduction

KAFRIBA Kafue River Basin Hydrology Model KfW Kreditanstalt für Wiederaufbau KGL Kafue Gorge Lower Dam KGU Kafue Gorge Upper Dam MACO Ministry of Agriculture and Cooperatives MDG Millennium Development Goal MDRI Multilateral Debt Relief Initiative MEWD Ministry of Energy and Water Development MW Mega Watts NAP National Agriculture Policy NEPAD New Economic Partnerships for Africa’s Development NGO Non Governmental Organization NIP National Irrigation Plan NORAD Norwegian Agency for Development Cooperation NPV Net Present Value NWASCO National Water and Sanitation Council OPPPI Office for Promoting Private Power Investment PPP Public Private Partnerships SADC Southern African Development Community SIDA Swedish International Development Cooperation Agency TFP Total Factor Productivity UfW Unaccounted for Water WBG World Bank Group WRAP Water Resources Action Program WSP Water and Sanitation Program WSS Water Supply and Sanitation WWF World Wildlife Fund ZACPLAN Zambezi River Action Plan ZACPRO Zambezi Action Plan Project ZAMCOM Zambezi Watercourse Commission ZCCM Zambia Consolidated Copper Mines ZESCO Zambia Electricity Supply Corporation ZRA Zambezi River Authority

Vice President: Obiageli K. Ezekwesili Country Manager/Director: Kapil Kapoor/Michael Baxter Sector Director: Inger Andersen Sector Manager: Ashok K. Subramanian Project Team Leaders: Leonard John Abrams Marcus Wishart

vi Acknowledgements

This strategy was prepared by a World Bank team. AFTP1), and Rita Cestti (Senior Rural Development The primary authors of the report were Rimma Specialist, OPCQC) contributed significantly as peer Dankova (Water Resources Economist) and Marcus reviewers. The team is also grateful for valuable Wishart (Water Resources Specialist). The Team comments and contributions made by Reynold Leaders were Len Abrams (Sr. Water Resources Duncan (AFTEG) Barabra Kazimbaya-Senkwe Specialist) and Marcus Wishart (Water Resources (ETWAF), Jane Walker, Luiz Tavares, Elizabeth Sher- Specialist). Other key members of the team were wood (AFTU1), Jean Michel Pavy (AFTEN), Fran- John Shepherd (Water Resources Management cois Onimus, Ijsbrand de Jong, Louise Croneborg Specialist, Consultant), Cecil Nundwe (Operations and Lucson Pierre-Charles (AFTWR). Analyst, Water and Sanitation Program), Musole The Country Water Resources Assistance Musumali (Consultant), Susan Mpande (Econo- Strategy (CWRAS) would not have been possible mist), and Neta Walima (Program Assistant). A without the collaboration and input from the Min- number of background papers and technical notes istry of Energy and Water Development, specifically provided inputs into the preparation of the final the Department of Planning and Information, the report. Specifically, the work on the strategy sig- Department of Water Affairs and the Water Board. nificantly benefited from the inputs of the technical The team also would like to acknowledge the input consultants: Tim Stephens (Irrigation Consultant); of Government agencies, academic and research in- Peter Sheppard (Remote Sensing Consultant); stitutes, cooperating partners, the private sector, and Xinshen Diao, James Thurlow, Tingju Zhu (Inter- non-government organizations who participated in national Food Policy Research Institute), and Rolfe consultations during the strategy preparation. This Eberhard and Sarah Haswell (Palmer Development report benefited greatly from the discussion and Group, Inc). inputs provided during the Consultative Meeting The team was guided by Michael Baxter (Coun- of preliminary findings held in Lusaka on October try Director, World Bank), Kapil Kapoor (Country 2, 2008. Manager, World Bank) and Ashok Subramanian The team gratefully acknowledges the financial (Sector Manager, AFTWR). Vahid Alavian (Senior support of the Bank-Netherlands Water Partnership Water Adviser, ETWWA), Paavo Eliste (Senior Econ- Program, Swedish and Norwegian Trust Funds in omist, AFTAR), Julio Revilla (Senior Economist, the preparation of this report.

vii Zambia: Managing Water for Sustainable Growth and Poverty Reduction

IBRD 37346

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Map of Zambia NOVEMBER 2009

viii Executive Summary

The country water resources assistance strategy for periods, more intense rainfall and increased storm Zambia provides an analysis of the role of water in events. This will have important implications for the economy and identifies the specific challenges, water resources management, as well as in the de- development opportunities and policies which sign, operation and development of infrastructure. inform an agreed framework for priority areas of Zambia lies entirely within the catchments of assistance. This is intended to contribute to further the Zambezi and Congo rivers and all internal run- prioritization of the Government’s plans on water off is shared by downstream and parallel riparian resources development, as articulated in the Inte- countries. This strategic geographic position in the grated Water Resources Management and Water upper reaches of both these catchments provides Efficiency Implementation Plan, and promotion an important context for any water resources de- of coordination and harmonization among co- velopment. Zambia has played an important role in operating partners in the sector. development of the Southern African Development The country’s ‘Vision 2030’ articulates the na- Community (SADC) Revised Protocol on Shared tional development goal of reducing poverty and Water Courses (2000) and is engaged in the process reaching middle-income country status by 2030. To of developing co-operative mechanisms with ripar- achieve this, the strategy of the Government is one ian states. However, the existing legal framework of inclusive growth and development with a focus explicitly excludes any provisions for addressing on diversification of the economy. As water plays an issues on shared waters in the Zambezi and Luapula important role in all sectors including agriculture, rivers, along with that portion of the Luangwa River energy, mining, industry, tourism, urban growth which constitutes the boundary between Zambia and rural development, the allocation, development and Mozambique. These account for more than 60 and protection of water is an essential prerequisite percent of Zambia’s water resources. for growth and poverty reduction. The water resources of the country are largely Zambia is well endowed with water relative to undeveloped. Available freshwater supplies are 60 other countries in southern Africa. The renewable times larger than the current levels of withdrawal water resource per capita is estimated at about 8,700 for economic consumption, which is three times m3 per year, well above the average for Sub-Saharan lower than the average per capita withdrawals Africa (7,000 m3 per person per year) and the global for developing countries and than those for sub- average (8,210 m3 per person per year). However, Saharan Africa. Hydropower potential remains there is considerable variability both spatially (be- largely untapped, at 27 percent of the estimated tween different parts of the country), seasonally 6,000 MW, less than five percent of arable land is and annually. This variability results in recurrent under irrigation and access to safe drinking water ‘water shocks’—droughts and floods—which are supply remains low, particularly in the rural areas likely to be exacerbated by climate change in the where coverage is around 37 percent. Although future. Global Circulation Models of climate change water is abundant, access is limited by human, in- predict that over the next 20 to 30 years, Zambia will stitutional, and financial capital creating conditions experience increasing temperatures with longer dry of economic scarcity.

ix Zambia: Managing Water for Sustainable Growth and Poverty Reduction

Economic development is undermined by fue catchment is home to 40 percent of the national physical scarcity of water. Despite the relative population, a majority of the mining investments abundance, the uneven distribution of water re- and economic activity, and roughly 80 percent of sources across the country, high climatic variability the country’s total irrigated areas. However, annual (resulting in frequent floods and droughts) and withdrawals of water for irrigation in the Kafue degradation of water quality increasingly results River are already reaching the limits that can be in localized issues of scarcity. Despite continuing sustained under the present storage capacity. In efforts to reduce pollution flow into the Kafue River, the absence of increased capacity further irrigation severe water quality issues persist in the Copperbelt, expansion would lead to the sub-optimal allocation posing serious health risks to the population and of water, substantial reductions in power produc- limiting the availability of water for productive tion and economic losses for Zambia. The river also purposes. The high dependency on hydropower, accounts for more than half of the country’s hydro- with 96 percent of the installed capacity produced power production, which is expected to increase to within a 300km radius in the Kafue/Zambezi over 70 percent with completion of the Itezhi Tezhi complex, will further increase vulnerability of the (ITT) and Kafue Gorge Lower (KGL) hydropower national economy to impacts associated with chang- plants. While more than 80 percent of the current ing climatic conditions. domestic water supplies are derived from the Ka- Hydrological variability is estimated to have fue River, these different sectoral water demands, cost US$13.8 billion (in 2006 prices), on average, coupled with significant water quality concerns over the period 1977 to 2007, with a 0.4 percent and associated health risks, are imposing increasing loss of growth annually. Rainfall variability lowers constraints on economic growth and there is a need agricultural growth by one percentage point each to optimize the economic allocation of water and year. Simulation of the potential impacts of future explore alternative sources of domestic supplies. rainfall variation on economic growth and poverty A reduction in unaccounted-for-water by the suggests that rainfall variability will cost Zambia commercial utilities within the upper Kafue catch- US$4.3 billion in foregone GDP over the next ten ment to the agreed target of 30 percent would years, while those based on the historically worst satisfy projected water demand and defer the need rainfall sequences indicate that this may increase to for investments in new sources of supply for the as much as US$7.1 billion: equivalent to a reduction Copperbelt. The commercialization of water supply in annual GDP growth by 0.9 percentage points. has contributed to increasing access to water and Rainfall variability could keep 300,000 more improvements in service delivery in urban areas, Zambians in poverty over the next decade. Rainfall although the CUs have yet to achieve commercial variability greatly reduces food availability, with sustainability. Only about 80 percent of operating drought-induced crop failures registered in six of costs are covered, and the aggregated operating ten farming seasons between 1986 and 1996. A se- deficit for all CUs stood at US$7.7 million for 2007. vere drought event similar in intensity to the 1992 Un-accounted for water is high, averaging 47 per- drought can cost the country up to 6.6 percent loss cent and resulting in annual losses worth around in its growth rate, US$2.6 billion in GDP loss, and US$50 million. The CUs in Lusaka and the Cop- increase the national poverty rate by 7.5 percentage perbelt account for more than 90 percent of these points. Similarly, the 2006/07 floods affected 1.5 mil- lost revenues. lion people and were estimated to cost over US$4.5 Balancing environmental sustainability under million in emergency operations and another US$80 the existing framework for water resources is a million during the recovery phase. Apart from its challenge. Although recognized as an important adverse effects on basic food security, impacts on water user in all recent water policy documents, households, incomes and poverty, such events also the governing water resources legislation does not have significant impacts for the national fiscus. include any explicit of the environmental require- Some river basins within the country, notably ments for water. Over 40 percent of Zambia’s land the Kafue Basin, are under increasing stress. The Ka- area is currently under some form of protection,

x Executive Summary with eight sites designated as wetland areas of The CWRAS has constructed an analytical significance under the RAMSAR Convention. The framework for directing investments in water re- unique combination of wetland habitats and biotic sources development and management within six diversity, along with the charismatic mega-fauna, priority thematic areas. These thematic priorities provide the basis for the country’s nature-based have been developed through an iterative consul- economic tourism. Coupled with culturally impor- tative process of identification and prioritization, tant events such as the Kuomboka Ceremony in the guided by the Integrated Water Resources Manage- Barotse Plains, tourism is estimated to contribute ment and Water Efficiency Implementation Plan between six and ten percent to GDP. Given these (IWRM&WE IP) and other national strategic and contributions and the important role in providing policy initiatives in the water sector. This process sustainable rural livelihoods, there is a need to en- culminated in a working session of stakeholders sure adequate environmental flows for important in Lusaka in October, 2008, that brought together habitats, such as the Kafue Flats, Lake Bangweulu, representatives from different sectors of Govern- the Luangwa River and the Lukanga and Busanga ment, relevant water users, co-operating partners, swamps. the private sector, academics and researchers, NGOs and community representatives, to discuss an appropriate sectoral response to challenges in Priority Areas of the the water sector. Response Specifically, the CWRAS (i) identifies water resources challenges, development opportunities Development of the Zambian economy is directly and policies in Zambia’s water resource sector; dependent upon secure availability and sustainable (ii) outlines an agreed framework for priority areas sources of water. To support the Government’s goal of assistance between the Government and the of economic diversification, improved competitive- World Bank for the next three to five years; and, ness and productivity, and the promotion of a more (iii) recommends a prioritized set of actions in the inclusive and shared growth that addresses the need water resources sector recommended for financial for rural development, the CWRAS identifies a and technical support. The CWRAS is therefore series of priority programs focused on the develop- intended to contribute to further prioritization ment of an adequate water infrastructure platform of the Government’s plans on water resources and continued improvements in the management development and promotion of coordination and of water resources. harmonization among co-operating partners in the Promoting economic growth and strengthening sector. This is to be pursued through the priority economic gains will depend on development of a programs identified below. water resources infrastructure platform, particularly in key sectors such as energy, agriculture and 1. Consolidation of the reform process and tourism. Improved water resources management strengthening international water manage- provides considerable economic benefits and the ment. There is an urgent need to implement targeted assurance of water supply for growth a modern, integrated approach toward devel- centers and growth poles will be an essential part opment and management of Zambia’s water of any growth acceleration strategy. Uncoupling resources. This requires the conclusion of the the economy from rainfall variability can promote reform process to update the legal and policy gains in GDP. However, effective interventions framework. A parallel process should be initi- directed toward strengthening the national capac- ated to establish and capacitate the appropriate ity to develop and manage water resources, along institutional framework. with mobilization of financial sources to implement Strategically positioned to assume an im- priority water projects, will be necessary for Zam- portant role in integration, cooperation and bia to benefit from its water as a source of national collaboration over international water resources economic prosperity. management, Zambia’s responsible and cooper-

xi Zambia: Managing Water for Sustainable Growth and Poverty Reduction

ative position will be an important determinant Potentially significant additional benefits of the success of such initiatives as the Revised have been identified with increasing the stor- SADC Protocol on Shared Watercourse Systems age capacity of the Itezhi Tezhi Dam. These are and the Zambezi Watercourse Commission. primarily associated with increased irrigation Further analytical work around the costs in the Kafue Flats, but also improved capacity and benefits associated with cooperative defor meeting environmental flow requirements velopment should be undertaken, coupled with and an increased firm power production capa- a program to enhance capacity at the national bility. Given the increasing demands for water level for international engagement. This should and competition among sectoral users, there is include a substantive political dialogue to en- a need to support further detailed investigations gender strong national leadership and increase to determine the feasibility of different options national levels of awareness. for raising the dam wall. 2. Water Resources Planning and Development. 4. Small Scale Multi-purpose Water Resources To realize the potential benefits from the Development. A comprehensive program of natural endowment of water resources, there investments in small multi-purpose water stor- is a need to provide an enabling framework age could substantially address rural poverty for facilitating large investments, such as the by increasing the resilience and diversification Kafue Gorge Lower Hydropower Plant. Inte- of rural livelihood strategies, improving water grated river basin planning and development supply and sanitation, access to electricity, the should be revised and updated to determine development of irrigation services and oppor- the next stage of medium to large scale water tunities for aquaculture and livestock watering resources development based on criteria such as in many rural areas of Zambia. maximum national economic benefit, national Support to the establishment of the Water development policies, and protection of key Resources Development Fund as envisaged environmental values. under the proposed legal reforms would assist The increasing demand on water resources in providing a sustainable financing platform from irrigation and hydropower production for pro-poor investments. Building on existing in the Kafue River, coupled with the need for operational procedures and experience, there environmental protection, requires a compre- is a need to standardize processes for the iden- hensive and rigorous system for determining tification, design and construction, operation the assessment and allocation of water rights. and maintenance, and support to formalizing There is a need to develop a water balance and a series of process-oriented manuals. undertake further developmental studies to These activities would assist the Govern- determine the capacity of the system to support ment in ensuring a transparent and economi- further increases in water allocations. cally efficient process of identification and 3. Development of an Infrastructure Platform. mobilization, which requires physical and The National Water Resources Master Plan financial involvement from participating com- of 1995 outlined a “Dam Development Plan” munities, along with an assessment of physical, which included preliminary layout designs economic, and social feasibility. Development for a number of proposed projects. The of an iterative monitoring and evaluation IWRM&WE Implementation Plan further framework would assist with ensuring sustain- provides a series of Project Concept Notes and ability. Fact Sheets based on identified infrastructure 5. Protecting and Developing Water Supplies. Ac- investment opportunities. A reassessment and knowledging the issues associated with water prioritization of these projects is needed to sup- pollution, specifically in the Copperbelt, alter- port development of pre-feasibility, feasibility, native sources of water need to be developed for and/or design studies that could facilitate the most at-risk town water supplies. Options specific investments. should explore shifting from contaminated

xii Executive Summary

surface water sources of supply to protected and quantity is available to support productive groundwater wellfields. Remedial works on application to economic growth and environ- tailings dams and waste heaps should continue mental sustainability is a comprehensive data to prevent further contamination. network that is effectively integrated into an A longer-term, sustained approach to re- information management system. vegetation of tailings dams and mining waste The necessary scientific capacity needs to heaps may provide the most common and be put in place and effectively mobilized to effective means of reducing leaching and ero- provide a range of water quality analytical and sion, preventing dust generation and helping related scientific services. Resource inventories with stabilization of slopes at the greatest risk. and assessments, founded upon accurate data, The emergence of funds to assist countries in need to be carried out to inform the planning accessing to carbon credits through extensive process and provide a platform for investment. and permanent afforestation should be explored Specific activities should include a con- as an innovative option for supporting such tinuation of on-going groundwater mapping initiatives within the framework of watershed and assessment initiatives, including hydro- management. geological assessments of the aquifer systems 6. Water Resources Assessment and Scientific Ser- in the Copperbelt, as well as in the Mpongwe vices. Lack of reliable data on water resources and Mumbwa areas. Support is also require to increases uncertainty within the planning upgrade and ensure a water laboratory within process and creates a risk of sub-optimal and Zambia that can facilitate the national water imprecise decisions on water investments. Cen- quality monitoring program and associated tral to ensuring that water of sufficient quality data management system.

xiii

1 Introduction

Zambia’s Development Objectives

Zambia is a politically stable democratic country with enormous economic potential, embedded in its rich endowment of natural resources. Accelerating economic growth and ensuring that the majority of the approximately 11.9 million people in Zambia benefit from it remain Zambia’s central development challenge. The national development goal of reducing poverty and reaching middle income country status by 2030 are articulated in the country’s ‘Vision 2030’. The Govern- ment’s strategy for inclusive growth and development is outlined in Zambia’s National Development Plan. The Fifth National Development Plan (FNDP) for the period of 2006–2010 proposes a multi-sectoral strategy for increasing Zambia’s annual growth rate to seven percent, sustaining it at that level, and making the growth more diversified as well as more inclusive. The primary theme of the strategy is “broad- based wealth and job creation through citizenry participation and technological advancement”. Current political, social and economic conditions present several challenges as well as opportunities for achieving the Government’s development goals. Zambia needs to expand its economy faster than its current rate of six percent a year to achieve the national vision of becoming a middle income economy by 2030. The required growth acceleration also needs to be diversified. It is important that revenues generated by the copper sector are used to build productive infrastructure and support the delivery of social services thereby laying a more sustainable foundation for development. Despite almost a decade of growth, about two thirds of Zambians live in poverty, and rural people persistently lag behind the urban population in most measures of social welfare. Poverty in Zambia is mainly concentrated in rural areas, affecting 81 percent of the rural population, and 34 percent of urban dwellers. Zambia is one of the most urbanized African nations (35 percent of population live in urban areas) but two thirds of the total population are small scale farmers. This level of rural poverty has remained persistently high, as Zambia’s growth over the past decade was not sufficiently shared by the rural poor (Figure 1.1). The FNDP

1 Zambia: Managing Water for Sustainable Growth and Poverty Reduction

Figure 1.1: Poverty trends 1991–2006

100

Poverty Head Count (%) Count Head Poverty 40

20 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

Urban Rural National

puts a strong emphasis on the need to ensure that and 2011 is to assist Zambia meet its objectives of the country’s growth is shared and inclusive. accelerating growth and better sharing the benefits As defined in the FNDP, the goal for the water among the population. In achieving these objectives, sector is to “promote sustainable water resources the Government aims at improving competitiveness development and sanitation with a view to facilitat- and productivity, and promoting rural developing an equitable provision of adequate quantity and ment. Zambia has great potential for future growth. quality for all users at acceptable costs and ensuring Its mineral and agricultural resources have not been security of supply under varying conditions”. This fully utilized, and most of the substantial water is to be achieved through ten separate programs, resources have not been developed. including support to the development and alloca- Access to water and irrigation is a major deter- tion of water resources to the priority pillars for eco- minant of land productivity. It stabilizes yields and nomic development, including agriculture, tourism, increases rural competitiveness. Water resources environment, mining, manufacturing and energy. In management is crucial in reducing vulnerability response to the FNDP, the Ministry of Energy and to droughts and floods and potential impacts of Water Development (MEWD), with the Zambian climate change. Achievement of FNDP’s objec- Water Partnership, has developed an Integrated tives, such as increasing the current electrification Water Resources Management and Water Efficiency rate, improving Zambia’s connectivity to regional Implementation Plan (IWRM&WE IP) to support markets, and increasing and sustaining water sup- the development and poverty reduction agenda of ply and sanitation access in both urban and rural the FNDP through interventions in the water sector. areas is not possible without further development of water resources infrastructure as a platform for economic growth and poverty reduction. World Bank Country Given the importance of water resources de- Water Resources Assistance velopment for the country’s economic growth, the Strategy World Bank Country Water Resources Assistance Strategy (CWRAS) for Zambia aims to outline an The principal objective of the World Bank’s Country explicit program of Bank lending and non-lending Assistance Strategy (CAS) for Zambia during 2008 support in water over the next three to five years

2 Introduction tailored to country circumstances and consistent support by the Bank and thus contributes to further with the Bank’s CAS and the Government’s national prioritization of the Government’s plans on water poverty reduction strategies. The contents and resources development and promotion of coor- recommendations of the CWRAS take into account dination and harmonization among co-operating the country specific economic context, the role and partners in the sector. length of engagement of the Bank, national develop- The specific objectives of the CWRAS for Zam- ment priorities and specific water resources-related bia are to: challenges that Zambia faces. The CWRAS is intended to support the Gov- • Identify the specific water resources challenges, ernment’s continued efforts toward achieving the development opportunities and policies in the objectives of the FNDP by supporting the prin- water resource sector; ciples and inter-sectoral interventions outlined in • Outline an agreed framework between the Gov- the Government’s IWRM&WE Implementation ernment and the World Bank for the next three Plan and other national strategic and policy initia- to five years; and tives in the water sector. The CWRAS identifies • Articulate the broad principles contained in the a prioritized set of actions in the water resources World Bank’s 1993 Policy Paper and the 2003 sector recommended for financial and technical Water Resources Sector Strategy.

Figure 1.2: Development of a Country Water Resources Assistance Strategy for Zambia

Vision 2030

Fifth National Development Plan

Integrated Water Resources Management and Water Eciency Implementation Plan

Water sector strategies WB CAS

Legal and Country Water Assistance Strategy WB WRSS policy framework

Development CP strategies plans

Consultations with Government, stakeholders, cooperating partners

Zambia’s Water Resources: 2 Abundance and Vulnerability

The water resources situation in Zambia compares well with other countries in the region and globally in absolute terms. However, uneven distribution of water resources across the country, high climatic variability (resulting in frequent floods and droughts) and degrading water quality increasingly undermines the role of water in the country’s economic development.

Surface Water Resources

The total renewable water resources of Zambia amount to about 105 km3 per year, of which about 80 km3 are produced internally. The renewable water resource per capita is estimated at about 8,700 m3 per year, well above the average for Sub-Saharan Africa (7,000 m3 per person per year) and the global average (8,210 m3 per person per year). All of the internal runoff is shared by downstream and parallel riparian countries. Zambia lies entirely within two of Africa’s great river basins. Seventy-two percent of Zambian territory falls within the Zambezi Basin, including the upper reaches of the main stem of the Zambezi River, as well as all of the catchments for the Kafue and Luangwa Rivers (Figure 2.1). The remaining 28 percent of the country falls within the upper reaches of the Congo River Basin, including the Luapula, Chambeshi and Tanganyika catchments (see Table 2.1). Avail- able water in any particular area depends on how much surface and groundwater is available in rivers, lakes, reservoirs and aquifers. The main stem of the Zambezi River is the only river within Zambia that derives any significant contributions from outside the national territory. Although catchments like the Kafue, Luangwa and Chambeshi are within Zambian territory, they constitute an important part of the respective international river basins and all rivers in Zambia are considered to be internationally shared watercourses. Zambia’s strategic geographic position in the upper reaches of both these important catchments provides an important context for any water resources development. Zambia has signed the Southern African Development Community (SADC) Revised Protocol on Shared Water Courses (2000) and is engaged in the process of developing co-operative mechanisms

5 Zambia: Managing Water for Sustainable Growth and Poverty Reduction

Table 2.1: Contribution of the Zambezi and Congo River systems River Catchment area (‘000 km2) catchment (area outside Zambia) Surface water potential (%) Annual run-off (km3) Congo Basin 3 730 35.6 1 260

Luapula 173.40 26.25 30.14

Chambeshi 44.43 7.62 8.75

Tanganyika 15.86 1.73 1.99

Zambezi Basin 1 359 64.2 94

Zambezi 268.24 (418.81) 36.36 41.75

Kafue 156.99 8.40 9.88

Luangwa 144.36 (3.26) 19.44 22.32

Total 114.83

Figure 2.1: River Basins of Zambia IBRD 37341 NOVEMBER 2009

Lake Tanganyika To Sumbawanga Lake Mweru TANZANIA Lake TANGANYIKA To Mweru Mbeya ZAMBIA Wantipa DEMOCRATIC REPUBLIC LUAPULA NORTHERN OF CONGO A L U Kasama P A Lake CHAMBESHI U L Bangwelu

To Caianda Chambeshi Lake Mansa Malawi

To a w Lubumbashi g n Solwezi a u L

COPPER- MOZAMBIQUE NORTH- Ndola WESTERN BELT LUANGWA Lu ng a MALAWI w g Chipata eb n u u ng L u EASTERN To Lilongwe ANGOLA a fue fw Ka m CENTRAL e Kabwe s To i n z u Furancungo e L b

m a ZAMBEZI Z KAFUE Mongu MOZAMBIQUE AKA e LUS Kafu LUSAKA WESTERN To Harare SOUTHERN KAFUE RIVER BASINS

Cu PROVINCE CAPITALS an do Lake ZIMBABWE NATIONAL CAPITAL Kariba MAIN RIVERS To MAIN ROADS NAMIBIANgoma Livingstone 0 50 100 150 200 Kilometers PROVINCE BOUNDARIES To Matetsi BOTSWANA 0 50 100 150 Miles INTERNATIONAL BOUNDARIES

Source: IWRM&WE IP, 2008

6 Zambia’s Water Resources: Abundance and Vulnerability

Figure 2.2: Average annual rainfall and average annual reference evapotranspiration in Zambia for 1976–2007IBRD 37342 NOVEMBER 2009

Lake Lake Annual Rainfall (mm) Lake Tanganyika Annual ETo (mm) Lake Tanganyika Mweru Mweru < 800 < 1,563 801–900 1,563–1,620 901–1,000 1,621–1,708 1,001–1,200 Kasama 1,709–1,834 Kasama > 1,200 > 1,834 Mansa Mansa Chambeshi Chambeshi

a a Solwezi w Solwezi w g g n n a a u u L L Ndola Ndola L L un a un a gw g gw g e n Chipata e n Chipata bu u bu u ng L ng L u e u e Kafu Kafu i Kabwe i Kabwe z z e e b b

m m a a Z Mongu Z Mongu Kafue LUSAKA Kafue LUSAKA

PROVINCE CAPITALS PROVINCE CAPITALS NATIONAL CAPITAL NATIONAL CAPITAL Lake Lake Livingstone Kariba MAIN RIVERS Livingstone Kariba MAIN RIVERS INTERNATIONAL BOUNDARIES INTERNATIONAL BOUNDARIES

Generated from 1km pixel averaged annual rainfall and averaged annual ETo interpolated from 30 weather stations with data available in the same period.

with riparian states. However, the existing legal tral, and northern parts of the country characterized framework for water resources dates back to 1949 by rainfall distribution and soil type. Rainfall totals and explicitly excludes any provisions for the Zam- and intra-seasonal distribution among these three bezi River, the Luapula River or that portion of the regions vary greatly from year to year, particularly Luangwa River which constitutes the boundary in the southern region which is prone to extreme between Zambia and Mozambique. Accounting for meteorological events and hydro-climatic variation more than 60 percent of Zambia’s water resources, (Figure 2.3). This makes rain-fed agriculture very it is unclear what law governs or regulates these vulnerable to droughts. areas or rivers. The main source of renewable water in Zambia is rainfall. Most of this rainfall falls during the wet season between the months of October and April. Climatic and Hydrological Seasonal variations in river flow, following rainfall Variability distribution, peak between March and April with low flow periods between October and Novem- Zambia lies in the tropics with a moderate climate ber. Extreme inter-annual variations are observed and summer temperature rarely exceeding 35°C. (Figure 2.4) and there is a high probability that at Rainfall is moderate averaging 1,000 mm annually. least one agro-ecological region will experience However, there is considerable spatial and temporal abnormal weather events in any given year. The variability (Figure 2.2). There is a strong national central and southern regions of the country (i.e. gradient, with the southern part of the country Regions I, IIa1 and IIb) are particularly prone to experiencing less rainfall (<800 mm) and higher both droughts and floods. The dry Regions I and evapotranspiration (>1,800 mm), while the central IIa1 have the highest inter-annual climate vari- and northern parts of the country receive higher ability, with coefficient of variation values of 0.180 annual rainfall (>1,200 mm) and experience lower and 0.203 respectively (Figure 2.3). By contrast, annual evapotranspiration (Figure 2.2). the remaining agro-ecological regions have fairly Zambia has historically been divided into three stable weather conditions, and no severe droughts agro-ecological regions, representing the south, cen- have been recorded over the last three decades.

7 Zambia: Managing Water for Sustainable Growth and Poverty Reduction

Figure 2.3: Average annual precipitation (mm) and annual precipitation coefficient of variation (standard deviation normalized by mean, indicating inter-annual variations of rainfall in an agro-ecological region) in

Zambia by agro-ecological region for 1976–2007 IBRD 37343 NOVEMBER 2009

Average Annual Precipitation Lake Annual Precipitation Coef. of Variation Lake Lake Tanganyika Tanganyika 786 Mweru 0.094 Lake 818 0.152 Mweru 930 0.171 941 0.180 Kasama Kasama 1,228 III 0.203 III Mansa Mansa Chambeshi Chambeshi

a a Solwezi w Solwezi w g g n n a a u u L L Ndola Ndola L L un III a IIa2 un III a IIa2 gw g gw g e n e n b u b u u L Chipata u L Chipata ng ng u e u e Kafu Kafu i i z Kabwe z Kabwe e e b b

m m a IIb a IIb Z Z Mongu LUSAKA I Mongu LUSAKA I Kafue Kafue

IIa1 PROVINCE CAPITALS IIa1 PROVINCE CAPITALS I NATIONAL CAPITAL I NATIONAL CAPITAL Lake MAIN RIVERS Lake MAIN RIVERS Livingstone Kariba Livingstone Kariba INTERNATIONAL BOUNDARIES INTERNATIONAL BOUNDARIES

Source: Zambia CWRAS Background Study on Climatic Variability: World Bank/IFPRI, 2008.

These regions have coefficients of variation that drological year, in contrast to severe drought years are inversely proportional to their annual rainfall where average runoff has been recorded as low amounts, indicating that rainfall is both higher and as 68 km3. Global Circulation Models of climate less variable in these regions. Annual runoff can be change predict that over the next 20 to 30 years, as high as 130 km3 per year in a high rainfall hy- Zambia will experience increasing temperatures

Figure 2.4: Annual variations of rainfall for Zambia

1,200.00 1,150.00 1,100.00 1,050.00 1,000.00 950.00 900.00 850.00

Annual average rainfall (mm) Annual average 800.00 750.00 700.00 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Mean annual rainfall Historical average rainfall

Source: Zambia IWRM&WE IP: 2008.

8 Zambia’s Water Resources: Abundance and Vulnerability with longer dry periods, more intense rainfall and bution of surface waters with many aquifers cover- increased storm events. ing substantial areas of the country, often making The frequency of flood and drought events groundwater more accessible than surface water taking place simultaneously across agro-ecological resources. It is usually assumed that the variation regions shows that during the last 32 years the coun- from year to year is very small. try experienced four severe droughts that affected Groundwater is a major source of base flow in several agro-ecological regions (Table 2.2). More all the perennial rivers and can contribute between frequent, moderate droughts were recorded for 30 and 90 percent of the total flows. While no sig- seven seasons for at least one of the agro-ecological nificant groundwater depletion has been observed, regions, indicating a recurrence interval of 4.5 years some groundwater resources, such as the Lusaka and typically affecting larger areas. “Normal” aquifer, are facing increasing threats from pollu- weather patterns (i.e. with a Palmer Z index between tion resulting from exposure to pit latrines, septic –0.5 and 0.5) are not experienced simultaneously in tanks and unplanned quarrying of construction more than three of the five agro-ecological regions material. There is also threat to over-pumping in during the 32 year study period, indicating that at specific areas, such as Lusaka and some farming least one part of the country experiences extreme areas, as a result of unregulated exploitation. The weather events every year. lack of provisions for groundwater regulation in the existing legislation has also contributed to the inadequate management of the country’s ground- Groundwater water resources. There are also large quantities of groundwater discharged from the mines in the It is difficult to accurately assess Zambia’s ground- Copperbelt area. water potential due to a lack of data. The current Groundwater often represents a substantial estimates are taken as a fraction of the rainfall and augmentation of natural river flows and may are assumed to be the annual exploitable water. be beneficial in ameliorating contamination, but Groundwater resources based on annual recharge presents long-term challenges to sustainable man- rates are estimated to be 49.6 km3 (i.e. about one agement in the upper reaches of the Kafue River. third of Zambia’s total renewable water resources) This highlights the need for approval of legislative based on an average of eight percent of the rainfall provisions, supported by an implementation pro- (DWA/JICA, 1995). Resources are relatively well gram, for developing a sound system of ground- distributed in comparison to the poor spatial distri- water quality services and monitoring.

Table 2.2: Occurrence of climatic events across agro-ecological regions, 1976 to 2007

Number of regions Severe drought Moderate drought Normal Moderately wet Very wet simultaneously (Za ≤ –1.5) (–1.5 < Z ≤ –0.5) (–0.5 < Z ≤ 0.5) (0.5 < Z ≤ 1.5) (Z > 1.5 ) affected 5 0 1 (1994) 0 0 0 4 0 4 0 4 1 (1978: I, IIa1, IIa2, IIb) 3 1 (1992: I, IIa1, IIb) 4 6 5 0 2 (1995: I, IIa1; 2005: 2 4 11 2 1 (1981: I, IIb) I, IIa1) 4 (1979: III; 1989: IIa1; 1 1 (1987: IIa1) 7 10 9 1997: IIa1; 2004: 2b) Note: based on averaged monthly Palmer Z Index in maize growing period from November to March, monthly moisture conditions depart from normal, reflecting short-term drought and wetness (Zambia CWRAS background study: World Bank/IFPRI, 2008).

9 Zambia: Managing Water for Sustainable Growth and Poverty Reduction

Water quality tailing facilities, (iii) seepage of water through tailings dams, and/or outflow as a result of embank- The quality of water is an increasing concern, par- ment failure, and (iv) the drainage of process waters ticularly in the Kafue River. The Kafue provides from smelters and acid plants, both systematically water to the main economic water consuming and through equipment failure or misoperation. sectors of the country: mining, agriculture and The Kafue River and some of its tributaries in the industry. It is also a source of domestic water Copperbelt are the destination of these materials. supply to over 40 percent of the population. In Using the Coefficient of Industrial Pollution, agriculture and industrial areas, such as the Ka- which is an average of concentrations of selected fue River below the sugar cane plantations, high metals in stream sediments at individual sam- nutrient loads in the river result in the prolifera- pling points divided by the median values of the tion of aquatic weeds. In the Copperbelt, heavy same metals in stream sediments of the whole metals such as copper, manganese and lead have region, an evaluation of the extent of metal con- been detected in many rivers and streams. Some tamination of stream sediments carried out by isolated areas are also coming under increas- the Czech Geological Survey and the University ing threat of pollution from non-point sources. of Zambia1 between 2004 and 2006 shows levels Threats include leaching of chemicals from agri- of contamination by cobalt, copper, manganese, culture land, industrial effluents, sewage effluents selenium, sulphates, calcium and magnesium, and land erosion. markedly in excess of permissible values for Protection of water resources from contamina- surface waters in the European Union (Table 2.3). tion is a growing concern nationally, particularly Cadmium, nickel, selenium, and zinc also exceed the safeguarding of drinking water for a grow- the standards. In the absence of sufficient lime, ing population. Responsibility for monitoring the pH of waste waters from ore dressing plants and mitigating pollution was designated to the employing chemical technologies can fluctuate Environmental Council of Zambia (ECZ) with between 2.04 and 3.62. its establishment in 1992 and enactment of the The acid neutralizing capacity of river sedi- Environmental Protection and Pollution Control ments and riverbed rocks is high and the contami- Act. However, a number of overlaps persist with nation of water significantly decreases downstream several institutions involved in some aspect of of the contaminant sources. Despite this, surface water quality control. Although draft water quality water samples from rivers within the Copperbelt standards have been proposed, there are currently show high concentration of arsenic, cobalt, cop- no standards for determining basin-specific efflu- per and lead. Many of these are recorded at levels ent levels. higher than the Zambian standards. The Zambian Background levels of heavy metals in the Cop- standards are also observed as being higher than perbelt region are naturally high due to the prevail- those applied in the European Union and by the ing geology. However, mining has a long history World Health Organisation in the Drinking Water in Zambia and while a number of the oldest mines Guidelines (Table 2.3). are now closed the tailings dams and waste heaps The Copperbelt Environment Project, which that they created remain in place. The area occupied is addressing environmental liabilities associated by tailings dams, waste rock dumps and highly with the privatization of Zambia Consolidated contaminated soils in the Copperbelt has been es- Copper Mines (ZCCM) assets, is intended to re- timated at 78 km2. New mines and older ones still duce pollution flow from rehabilitated project sites operating, along with their associated metallurgical into the Kafue River by 70 percent and ensure zero treatment plants and smelters, continue to add their leakage from rehabilitated tailings dams. Since wastes to the surface environment. Mining and industrial contamination of surface waters results 1 Kříbek, B., Majer, V., and Nyambe, I. (2007). Environmental- from (i) washout of fine particles from dumps and geochemical atlas of the Central-northern Part of the Copperbelt ore processing plants, (ii) overflow of water from Province of Zambia. Czech Geological Survey, Prague.

10 Zambia’s Water Resources: Abundance and Vulnerability

Table 2.3: Selected levels of heavy metals in streams from the upper Kafue River catchment.

Al Ca Cd Co Cu Mn Ni Pb SO4 Se U Zn pH (ppb) (ppm) (ppb) (ppb) (ppb) (ppb) (ppb) (ppb) (ppm) (ppb) (ppb) (ppb) WHO# (mg/liter) 6.5–8.5* — — 3 — 2000 400 70 10 400* 10 15 5000* EU limit 6–8 1500 250 1 10 30 500 50 15 300 5 50 200 Zambia Limit 6–9 2500 500 1000 1500 1000 500 500 1500 20 10000 Chambeshi River 3.62 6929 709 2.06 29528 16442 8673 1776 317 2617 37.8 99 1741 Busakile River 2.04 2115 197 7.02 909 7405 466 51.5 161 1396 13.0 5.25 346 Copperbelt 7.04 25.4 27.5 <0.04 1.4 7.5 28.1 0.64 1.19 4 <0.5 <0.02 12.9 uncontaminated Adapted from Kříbek et al. 2007 (WHO# Drinking Water Guidelines, with exception of *, are based on 1984 guidelines)

IBRD 37344 NOVEMBER 2009 Figure 2.5: Coefficient of industrial pollution of stream sediments in the upper Kafue River catchment

INDUSTRIAL POLLUTION OF STREAM SEDIMENTS < 2 2-5 (LOW) 5-10 (HIGH) > 10 (EXTREME) POLLUTED WATER BODIES IN THE KAFUE RIVER CATCHMENT (CIP VALUES) DISTRICT HEADQUARTERS SMELTERS MAIN CITIES AND TOWNS SHAFTS (ACTIVE/ABANDONED) BUILT-UP AREAS Konkola OP+ OP− OPEN PITS (ACTIVE/ABANDONED) RIVERS + − VD+ PD PD PADDOCK DUMPS (ACTIVE/ABANDONED) MAIN RAILROADS VD+ VD− VALLEY DUMPS (ACTIVE/ABANDONED) Chililabombwe MAIN GRAVEL ROADS Kamenza MAIN TARMAC ROADS DISTRICT BOUNDARIES Lubengele OP− PD− CHILILABOMBWE INTERNATIONAL BOUNDARIES DISTRICT Kafue DEM. REP. VD− Mushishima Kafue River Kafue OF CONGO VD− PD− Changa PD− PD− Nchanga North Butondo PD− VD+ Kankoyo Mufulira OP− VD+ Chingola PD− Mufulira Nchanga South Kantanshi OP+ Lulamba Musakashi VD+ VD+ CHINGOLA OP+ VD− MUFULIRA DISTRICT DISTRICT Muntimpa PD− − PD− OP+ PD VD+

Chambeshi Mindolo Mindolo KITWE DISTRICT Miseshi KALULUSHI DISTRICT VD− Kitwe Kitwe VD+Chachacha OP+ Uchi Twibukishe Natwange ZAMBIA PD− Kalulushi Nkana West PD− PD− PD− Busakile Area of OP+ map Chibuluma Wusakili NDOLA To Ndola NDOLA URBAN Lwanshimba RURAL VD+ DISTRICT DISTRICT River 0 5 10 15 20 Kilometers Kafue LUANSHYA DISTRICT 0 5 10 15 Miles Kafue

Map is adapted from: Environmental-geochemical atlas of the Central-northern part of the Copperbelt Province of Zambia, Kříbek, Majer, and Nyambe 2007.

11 Zambia: Managing Water for Sustainable Growth and Poverty Reduction commencement of the project there have been no rity. Despite the improvement, there is a need for dam failures and remedial works have been under- continued interventions, regular monitoring and taken at eight dams to safeguard physical integ- a reassessment of the current Zambian standards.

12 Water and the Zambian 3 Economy: Risk and Opportunity

Zambia’s economy is vulnerable and increasingly constrained due to a number of water-related factors. Frequent droughts and floods, hydrological variability and seasonal water shortages in some river basins, compounded by growing water demand from the major sectors of the economy and limited water infrastructure, impose a serious constraint on the medium and long-term growth prospects. At the same time, Zambia has abundant arable land and water resources which, along with the generally favorable climatic and ecological conditions, provide great potential for the production of a variety of crops, livestock development and industrial growth. The per capita water availability in Zambia is significantly higher than the average for Sub-Saharan Africa and for developing countries. In contrast, the level of per capita water withdrawal in Zambia is three times lower than the developing countries average and even lower than the average per capita water withdrawal in Sub-Saharan Africa (Figure 3.1). Total water withdrawals are about 1.7 km3 per year, with agricultural water use accounting for 77 percent or more than three quarters of the total water use. Domestic water use accounts for 16 percent while industries for seven percent. The low level of water withdrawal in Zambia indicates that the country has not been able to fully capitalize on the economic utilization of its water resources. This creates a unique opportunity for Zambia to develop its water resources as the necessary platform for sustainable growth and poverty reduction.

Water resources and Key Economic Sectors

Irrigation

Agriculture plays an important role in the Zambian economy. Agricul- tural development is a central part of the FNDP and the Government’s 2003 National Agriculture Policy (NAP) and 2004 National Irrigation Plan (NIP) support and advocate for the development of water resources and the adoption of irrigation as a means of increasing food production and security. Both state that increasing irrigated food

13 Zambia: Managing Water for Sustainable Growth and Poverty Reduction

Figure 3.1: Per capita water availability and water withdrawal

Water availability per capita (m3/person/year) Water withdrawal per capita (m3/person/year) 12000 1000 900 10000 800 700 8000 600 6000 500 400 4000 300 200 2000 100 0 0 SSA Zambia S. Africa Developed Developing SSA Zambia S. Africa Developed Developing countries countries countries countries

production by smallholders, emerging farmers, by and for the poor is thus subject to shortages dur- and medium and large scale commercial farmers, ing years of low or too high rainfall. Even at the best is a vital strategy to improving food security and of times, the productivity of smallholder, rain-fed incomes in the agricultural sector. The agricultural farming is very low. sector, including farming, forestry and fisheries, The main crops grown in Zambia, by province has consistently made the highest contribution to and their irrigated areas for 2008 and projected for GDP between 1998 and 2007 (around 20 percent). 2012 are given in Table 3.2.2 Agricultural exports rose from US$46.5 million in 1995 to US$133.9 million in 1999, although this latter Sources of water for irrigation figure comprised only three percent of total exports which are dominated by minerals. There are no irrigation schemes in Zambia supplied Farming in Zambia comprises small scale, sub- by large dedicated dams, except for a medium sized sistence farmers along with emergent, medium and scheme for irrigation mainly of wheat in the Mkushi large scale commercial farmers (Table 3.1). At least area. The largest schemes dependent on river flow four million Zambians are dependent on rain-fed staple crops grown by subsistence farmers (mainly maize, cassava and millet). Zambia’s rainfall varies 2 Stephens, TF. “Irrigated Agriculture in Zambia – Thematic greatly from year to year and most food production Paper”. World Bank internal paper, March 2008

Table 3.1: Summary of Zambian agriculture in 2003 Characteristics Small Scale Emergent Medium Scale Large Scale Number of Farmers 459,000 119,200 25,320 740 Farm Area (ha) 0.5–9.0 10–20 20–60 >60 Crops Grown Food Crops Food/Cash Crops Cash Crops Type of Production Subsistence Commercial/Subsistence Commercial Source: Ministry of Agriculture and Co-operatives 2005

14 Water and the Zambian Economy: Risk and Opportunity

Table 3.2: National irrigation activities – areas under formal irrigation (ha), by province Province 2008 (ha) Likely 2012 (ha) Comment Eastern 400 500 7 large farms only-wheat/vegetables Lusaka 8,500 9,500 Groundwater mainly—vegetables/horticulture Southern 39,000 45,000 Expansion limited by water supply Western 100 250 Mostly Zambezi recession irrigation (rice) Northern 1,500 3,500 Planned expansion for wheat/sugar/oil palm Northwestern 300 300 Marketing constraints Luapula 150 250 Marketing constraints Copperbelt 4,400 6,800 Mpongwe area + crops elsewhere Central 10,000 15,500 Chisamba/Mkushi area mainly Total 66,358 81,600 Note: The table above excludes dambo/recession (“informal”) irrigation and garden irrigation. The main crops irrigated are wheat, sugar cane, soya, maize, coffee, horticulture (vegetables) and coffee.

regulated by a large dam are those in the Kafue Flats, altitude areas in Zambia, of which the Kafue Flats growing mostly sugar. and the Chiawa area are typical. Under the best man- Many commercial farmers have constructed agement and with good soils, the yields obtained for small and medium sized dams over the last three sugar cane in parts of the Kafue Flats are amongst decades and use these for irrigation. The Depart- the highest in the world. In the Kafue Flats, the area ment of Water Affairs (DWA) estimates that about planted with sugar cane has almost reached the ceil- 1,750 small to medium sized dams (3 to 15 m high) ing for which licenses have been granted or are likely have been constructed since 1950, and that there to be in the near future, and should thus increase are more than 2,000 such dams in Zambia. Many very little beyond the area to be developed by the have fallen into disrepair. Some of these dams still end of 2008. There is, however, more opportunity in in operation could provide good opportunities for the Chiawa area below Kafue Gorge. use of low cost technology to increase crop areas Wheat is grown successfully in the Lusaka, and yields, to spread knowledge of irrigation and Mkushi, Mpongwe and Chisamba areas. All wheat its possibilities more widely (such as gravity drip is irrigated, usually using center pivot technology, systems). The DWA has a construction program and yields of seven tons per ha or greater are ob- for small dams, supporting around three dams tained. Some farms are irrigated from surface water per year. sources (Mkushi and some at Mpongwe) but most The “emergent farmers”, typically on farms use groundwater from the high-yielding carbonate of 10 to 50 hectares, largely subsist from their own aquifers of the region. The area farmed for wheat is productivity but they also produce a marketable increasing rapidly and with high international grain surplus of staples and/or industrial or horticultural prices, further increases are likely. crops. Some of them are “outgrowers”, growers located around a commercial scheme, and supported Irrigation development constraints and by the management of the estate. The outgrower opportunities concept is one of the important opportunities to widen the pool of skilled emergent irrigation farm- The main areas where proposals are known for new ers in Zambia. irrigation development in the near term are: Kafue Sugar requires warm climatic conditions and Flats (e.g. Magobbo, Manyomyo and Muvuma can only be grown successfully in the warmer, lower Hills and Chiansi projects, totaling about 7,700 ha),

15 Zambia: Managing Water for Sustainable Growth and Poverty Reduction

Mpongwe (Jatropha and other crops, ultimately (ii) the proposed Irrigation Development Project; some 20,000 ha to be irrigated from groundwater and, (iii) the Emergent Farmer Finance and Support and/or the Kafue River), and the Mkushi area, Program (through support from two banks and the Central Province (up to 26,000 ha additional irriga- IFC) targeting emergent farmers. tion, proposed to be supplied from two additional There is potentially adequate surface and dams, one each on the Lunsemfwa and Mkushi groundwater water available at the national level Rivers). Further growth of wheat irrigation is also to support further substantial irrigation develop- expected in addition to these proposals, mainly ment. Despite the adequate resources at the na- from groundwater, in the Lusaka, Central and Cop- tional level, local level scarcity exists and the use perbelt provinces. Growth in demand for water for of surface water for dry season irrigation requires irrigation in other provinces will probably be much increased regulation through large infrastructure. slower. Current uses of water in the Kafue Flats as well Outside the main north to south corridor, as in the upper Lunsemfwa River, including envi- limited access to electricity and remoteness from ronmental requirements, hydropower, irrigation markets and sources of inputs are major constraints and urban water supply, are reaching the limit of for irrigation development. The Government has what can be provided for with existing storage. been developing three new farm blocks and provid- Beyond this limit, users will experience economic ing power to these (one each in Luapula, Central losses in dry years unless further storage capacity and Western Provinces). But remoteness remains is developed. a constraint, and little investment has so far been Annual withdrawals of water for irrigation attracted. Lack of access to finance on affordable from the Kafue River, both upstream and down- terms is a major constraint to investment by farm- stream from the Itezhi Tezhi Dam have shown ers at all scales. Emerging farmers are rarely able to rapid expansion of irrigated areas over the past five access any credit finance at all. This is proposed to years (Figure 3.2). Based on an analysis of remote be addressed through several initiatives including: sensing data the area under irrigation in the Kafue (i) the Irrigation Development Fund established River basin is estimated to be almost 50,000 ha. The by Government, although this has been relocated remote sensing data reveals an additional 15,000 to the Citizens Economic Empowerment Fund; ha under irrigation when compared with the total

Figure 3.2: Expansion of irrigated areas in the Kafue Basin

35,000

30,000

25,000

20,000 ha 15,000

10,000

5,000

0 2001 2002 2003 Year Sugar cane Total irrigation

16 Water and the Zambian Economy: Risk and Opportunity area irrigated reflected in the allocation of water in the mining sector, would cause significant risk rights for the catchment. Of this, roughly 41,000 to the Zambian economy and delay the pace of its ha (88 percent) is based on surface water irrigation further development. with an additional 9,000 ha (22 percent) irrigated The Zambian power system had 100 percent through ground water abstractions. Eighty percent surplus capacity in the early 1980s, due mainly to of the irrigation is in the Kafue Flats sub-catchment lower than expected growth in the mining industry. and 66 percent of the total irrigated area is under However, escalating base metal prices, and renewed sugar cane production. The limit that can be sus- interest in the development of Zambia’s rich min- tained under the present level of dam development eral resources, have resulted in a rapid increase in is already being reached. If even only a part of the demand for electricity over the past decade. potential 27,700 ha of new irrigation is developed The mining industry accounts for 59 percent through withdrawals from the Kafue River, or from of consumption (Figure 3.3), contributing an av- groundwater which feeds the river or its tributaries, erage of around seven percent to GDP over the there is a high risk of disruptions both to irrigation past few years and around 80 percent of exports and hydropower development downstream during (unpublished sources put this figure to be as high dry years, unless substantial additional storage is as 20 percent of GDP.). As such, energy demand constructed. fluctuates depending on the level of production Groundwater developments have been con- of copper and other minerals by the mines. Fore- centrated in the Central, Lusaka and southern casts of future demand are heavily influenced by Copperbelt provinces, where high yielding car- assumptions regarding average consumption per bonate aquifers exist and there is access to power. ton of copper produced, closure of existing mines Groundwater extraction rates are reaching the and opening of new mines. limits of sustainability in Lusaka city, Chisamba, The demand is projected to continue to increase and Mkushi areas. Groundwater use presents at an estimated 100 MW per year, with ZESCO advantages in areas where aquifer outflow is projecting that the demand for exports will grow mainly to wetlands such as Lukanga Swamp, as by 28 percent per year and by 91 percent in 2012 such use would not be in competition, or would alone. This rapid escalation in the demand for a be in only limited competition, with downstream secure supply of electricity coupled with the lack extraction from surface sources such as the Kafue River. There is an urgent need for greater under- standing of the aquifers and groundwater sources in the Lusaka, Central and Copperbelt provinces, and in areas where irrigation expansion is an- Figure 3.3: Power consumption by sector ticipated, outside the areas which are presently Agriculture Construction Energy & Water heavily exploited. Transport (2%) (0.2%) (2%) (0.7%) Finance & Property (2.9%) Hydropower Trade Others (2%) (2.3%) Energy Demands Manufacturing (5.8%) Zambia’s successful realization of becoming a prosperous middle income country by 2030 will depend substantially on the development of new Services (23%) sources of energy to support economic growth. The FNDP states that a considerable increase in hydropower generation is one of the priority de- Mining velopment objectives of the country. A failure to (59%) meet the projected demands for energy, particularly Source: Energy Regulation Board 2007 Energy Sector Report.

17 Zambia: Managing Water for Sustainable Growth and Poverty Reduction

IBRD 37345 NOVEMBER 2009 Figure 3.4: Proposed sites for hydropower development

To Sumbawanga Lake Lake Tanganyika Mweru To LUNZUA Mbeya TANZANIA DEMOCRATIC REPUBLIC KALUNGWISHI ZAMBIA OF CONGO CHISHIMBA FALLS Kasama WEST LUNGA RIVER AT MAMBILIMA MUSONDA Lake MWINILUNGA (25MW) FALLS Bangwelu To Caianda Chambeshi Lake Mansa Malawi

a To w g Lubumbashi MOMBUTUTA n Solwezi a u L KABOMPO GORGE (34MW) LUSIWASI MOZAMBIQUE CHAVUMA Ndola L un a gw FALLS CHIKATA FALLS g MALAWI e n Chipata b u u (5-15MW) L ng (35MW) u To Lilongwe ANGOLA e Kafu Kabwe MULUNGUSHI To i z e Furancungo b

m a Z Mongu MOZAMBIQUE LUSAKA fue LUNSEMFWA ITEZHI-TEZHI Ka (120MW) KAFUE GORGE KAFUE LOWER To Harare EXISTING POWER STATIONS KARIBA NORTH PROPOSED POWER STATIONS

C KARIBA SOUTH PROVINCE CAPITALS ua nd Lake o NATIONAL CAPITAL VICTORIA BATOKADEKA Kariba 0 50 100 150 200 Kilometers FALLS MAIN ROADS To GORGEGAP ZIMBABWE NAMIBIA Ngoma INTERNATIONAL BOUNDARIES Livingstone DEVILS GORGE 0 50 100 150 Miles

of investments in major power stations over the count for 96 percent of the installed hydropower past 30 years has resulted in a deficit in the na- capacity and 92 percent of the installed national tional power system. Similar increases in national energy capacity. Kafue Gorge and Kariba were demand throughout the southern African region both commissioned in the 1970s and represent have further undermined the availability of power the last large scale investments in power genera- through regional trade among the Southern African tion. Together they alone account for 90 percent of Power Pool. Zambia lies between the hydropower all installed hydropower. Both Kafue Gorge and rich Democratic Republic of Congo (DRC) and rela- Kariba North Bank are currently undergoing reha- tively hydropower poor southern African region. bilitation programs that are intended to increase Zambia, therefore, has an excellent opportunity to capacity (Table 3.3). export power and provide transmission services to It has long been acknowledged that the high southern and east African countries. dependency on two, geographically proximate power stations (Kafue Gorge and Kariba) exposes Hydropower Potential the national power system to significant risks and that there is a need not only to meet increasing Zambia’s endowment of water resources and generation demand but to diversify the base for topography provide significant hydropower re- such generation. With 96 percent of the installed source potential, estimated at 6,000 Megawatts capacity produced within a 300 km radius (Ka- (MW). The installed hydropower capacity repre- fue Gorge, Kariba North Bank and Victoria Falls sents only 27 percent of the country’s hydropower Power Stations) there is an economic vulnerability potential and accounts for 99 percent of all electric- to climate change. The drought in the early to ity production in Zambia. The Kafue Gorge, Kariba mid 1990s depleted the water available to run North Bank and Victoria Falls Power Stations ac- the generators and turbine discharges between

18 Water and the Zambian Economy: Risk and Opportunity

Table 3.3: Existing hydropower stations in Zambia

Installed Capacity Firm Average Plant River (MW) Commissioned Energy Output (GWh/yr) Hydro Kafue Gorge* Kafue/Zambezi 900 (6x150) 1971–76 4700 5200 Kariba North Bank* Zambezi 600 (4x150) 1974 3500 4400 Victoria Falls A Zambezi 8 1936 Inc. below Victoria Falls B Zambezi 60 1968 Inc. below Victoria Falls C Zambezi 40 1972 556 775 Mulungushi/Lunsemfwa Mulungushi/Lunsemfwa 20/18 1926 216 n/a Lusiwasi Lusiwasi 12 1966–75 105 50 Chishimba Falls Lwombe 6 26 n/a Musonda Falls Lvua/Mbereshi 5 17.5 n/a Lunzua River Lunzua 0.75 1966–75 Hydro Total 1,670 Others 90 Total 1,760 *Power rehabilitation project will upgrade Kafue to 990 and Kariba to 720 MW.

April 1992 and February 1993. During this period identified (Figure 3.4). Due to the topography of energy production was only 66 percent of average the terrain, the geology and high annual rainfall production. Proposed new hydropower stations at there are a number of promising sites for mini/ the Itezhi Tezhi Dam (ITT) and the Kafue Gorge micro hydropower schemes in the northwestern Lower (KGL) Dam will further increase this de- and the northern parts of the country. The MEWD pendency on the Kafue River and susceptibility is currently commissioning a study to assess and to hydro-climatic risks. document the country wide small scale hydro- Substantial hydropower potential still exists in power potential with a view to accelerating the the Zambezi River Basin and in the Luapula River provision of services to the peri-urban and rural Basin, which has yet to be developed. Studies have areas of Zambia. examined possible developments for a bi-national With installed capacity at only 27 percent of development with Zimbabwe at Batoka Gorge potential, Zambia’s endowment of water resources (1,600 MW) on the Zambezi River upstream of and geography provide significant potential for the existing Kariba dam. Two sites are also at the the further development of hydropower resources. early stages of development on the Kafue River; However, there are a number of significant chal- Kafue Gorge Lower Dam (600 MW) and the Itezhi lenges that need to be addressed and overcome in Tezhi Dam, where a 120 MW power station is to be order to realize this potential and the benefits that added to the existing dam. Studies have also been additional hydropower capacity could provide for undertaken of possible hydroelectric developments the country. There have been no major investments on the Kalungwishi River, which flows into Lake in hydropower generation over the past 30 years Mweru, and on the mainstream of Luapula River, despite various attempts by the Government to which forms the border between Zambia and the obtain private and public funding for large hydro- Democratic Republic of Congo before flowing power projects. The current tariff framework does into Lake Mweru, where some 1,200 MW has been not provide for the necessary returns to encourage

19 Zambia: Managing Water for Sustainable Growth and Poverty Reduction private sector development. Current export prices • setting tariffs; and are not cost reflective and would have to increase • enforce minimum service delivery standards. by about 15 percent to cover their full cost, raising questions about the ability of ZESCO, the vertically Currently, there are ten commercial utilities integrated Zambian power utility, to invest in higher (CUs) operating in Zambia that each cover between cost new plants and sell into a competitive export one to several towns and roughly 90 percent of market, to cover its full costs of those exports, and the urban and peri-urban population. The com- to improve its financial performance. mercialization of water supply has contributed to increasing access to water and has been crucial to Water Supply and Sanitation improvements in service delivery in urban areas, although the CUs have yet to achieve commercial The Government’s focus on providing “adequate, sustainability. Only about 80 percent of operating safe and cost-effective water supply and sanita- costs are covered through water and sewerage tion services” to ensure the health and well-being services billings, and the aggregated operating of the citizenry is articulated in the FNDP and deficit for all CUs stood at US$7.7 million for 2007 demonstrated through continued efforts to meet (Table 3.4). Collection efficiencies vary among the the MDGs. The Government’s goal is to increase CUs and the operating deficit does not include sustained access to water supply and sanitation in outstanding debts, which in Lusaka amount to over both urban and rural areas by strengthening the US$4.3 million from Government alone. Consum- institutional and policy frameworks and improving ers’ willingness to pay is also often linked to the systems for service delivery. Medium-term targets poor quality of water supplied. For example, in defined under MDG 7 require increasing the pro- the Copperbelt “there appears to be a high level portion of the population with sustainable access to of dissatisfaction in Mine Townships—particularly an improved water source from 49 percent in 1990 among vulnerable groups—with the quality of wa- to 75 percent by 2015.3 This is equivalent to an ad- ter services and their expense”.4 This refers to the ditional 2.5 million people. The biggest challenge quality of water supplied, to supply interruptions is in the rural areas where coverage is estimated to and to the fact that it is generally expected that be only 37 percent. every household will have an individual connec- To achieve these goals, a series of progressive tion. A large number of households are thought reforms were introduced in the early 1990’s target- to be unable to afford such costs and communal ing the commercialization of services, professional standpipes might be more within their means. Any management and cost recovery from operations new planned services should not only therefore pay for utilities in urban areas. Through the 1994 water attention to water quality and service reliability, sector policy, these reforms supported the establish- but also to matching service level with ability and ment of the National Water Supply and Sanitation willingness to pay. Council (NWASCO), which began operations in Un-accounted for Water (UfW)5 is high, av- 2000, and the establishment of commercial utilities. eraging 47 percent and resulting in annual losses NWASCO is mandated with balancing commercial worth around US$50 million (Table 3.5). The CUs and consumer interests and has the overall respon- in Lusaka and the Copperbelt account for more sibility to:

• advise the Government and local authorities on 3 Getting Africa on Track to Meet the MDGs on Water and matters of WSS and commercially viable instru- Sanitation (2006). ments of service delivery; 4 ZCCM Investment Holdings PLC Copperbelt Environment Project, Counterpart Environment Management Plan, Final Report • license utilities and other service providers; Scott Wilson Piesold Zambia Ltd July 2003, p33. • develop guidelines for WSS provision; 5 UfW is defined by NWASCO as the difference between the • oversee the establishment of utilities, and their quantity of water produced and the quality of water billed, including technical and commercial losses. The NWASCO technical and financial management; benchmark for UfW is 25%.

20 Water and the Zambian Economy: Risk and Opportunity

Table 3.4: Production and financial efficiency of commercial utilities in Zambia

Water Value of Commercial prodn Average Value of water water sold Collection Cash revenue Total cost % Cost utility (Mm3) Tariff (Kw) prodn (Mm3*Kw) UFW (%) (Mm3*Kw) efficiency (%) (Kw/Mm3) (MKw) covered Nkana 113.6 731 83,042 35 53,977 80 43,182 52,547 82.18 Lusaka 78.9 1,433 113,064 51 55,401 83 45,983 53,177 86.47 Kafubu 49.8 947 47,161 58 19,807 85 16,836 21,702 77.58 Southern 17.8 1,200 21,360 43 12,175 102 12,419 12,451 99.74 Mulonga 21.4 969 20,737 56 9,124 64 5,839 7,285 80.16 Lukanga 15 761 11,415 61 4,452 64 2,849 5,212 54.67 Chambeshi 8.5 656 5,576 54 2,565 65 1,667 2,662 62.63 Chipata 2.5 1,981 4,953 31 3,417 121 4,135 4,066 101.69 Northwestern 3.2 2,310 7,392 36 4,731 85 4,021 4,056 99.14 Western 5.6 797 4,463 47 2,365 108 2,555 3,21 79.56 Total 316.3 319,161 168,015 139,486 166,369 Average 31.63 1,179 31,916 47 16,802 86 13,949 16,637 82 Source: Adapted from NWASCO Urban and Peri-Urban Water Supply and Sanitation Sector Report 2006/2007. Nkana WSC disaggregated its assets in 2007/08 reducing its size and asset base.

than 90 percent of these lost revenues. In the sufficient to meet the 2.5 million required for the absence of these revenue streams investment in MDG 7 targets. These CUs rely on a combination rehabilitation measures and new infrastructure is of surface and ground water resources with some deferred and regular operations and maintenance of the Copperbelt towns also relying on water from suffer. The estimated investment needs for the mine dewatering activities. There has been little in- individual commercial utilities vary from US$0.8 vestment in the Lusaka water supply system over million to over US$700 million with the combined the past 30 years, and even with efforts to reduce investment requirements estimated at over US$1.4 the UfW to 30 percent, there is a need to develop billion.6 Although requiring significant time and alternative sources of supply. New well fields are investments to achieve, a reduction in UfW from being developed to provide an additional 5.6 Mm3 current levels to the target of 30 percent would per year, increasing existing production by a little save 46 Mm3 per year, sufficient water to serve over six percent to around 245,342 m3 per day. This over one million additional people (Table 3.5). is still not sufficient to meet the current demand Based on the 2006/07 average tariff and the same estimated to be 323,000 m3 per day. operating conditions, this would equate to an While there is increasing recognition of the increase in revenues by US$16 million across the need for more detailed monitoring and stronger ten CUs and allow all but Nkana, Lukanga, and regulatory measures to control and manage the use Chambeshi to achieve over 100 percent opera- of groundwater within the Greater Lusaka area, the tional cost recovery. aquifer is under increasing pressure and subject to The Lusaka Water and Sewerage Company increasing contamination. Additional sources of and the five CUs operating in the northern min- supply are needed and long-term augmentation ing areas account for over 80 percent of all water is being investigated from the Kafue River via a production. These areas represent nearly 40 percent of the total population and while increas- 6 National Urban Water Supply and Sanitation Program: Back- ing service levels to 100 percent would add an ground and Analysis. Draft June 2008. Ministry of Local Govern- additional one million people this would not be ment and Housing.

21 Zambia: Managing Water for Sustainable Growth and Poverty Reduction

Table 3.5: Impact of reducing unaccounted for water Impact of reducing UfW to 30% Commercial Coverage Water savings Water savings Additional popn utility (%) Popn served (Mm3/year) (Ml/day) served Nkana 85 875,872 5.68 15.56 97,319 Lusaka 64 1,041,654 16.57 45.39 486,105 Kafubu 92 424,819 13.94 38.20 264,332 Southern 83 250,853 2.31 6.34 72,469 Mulonga 91 211,994 5.56 15.24 122,485 Lukanga 40 120,494 4.65 12.74 83,007 Chambeshi 47 120,798 2.04 5.59 64,425 Chipata 59 84,633 0.25 0.69 1,881 Northwestern 60 116,684 0.19 0.53 15,558 Western 47 67,419 0.95 2.61 25,469 Total 67 (av) 3,315,219 46.25 126.71 1,135,732

second pipeline from the Iolanda Treatment Works. risks and there is a need to explore safe, alterna- This would need to start in 2015 in order to satisfy tive sources of supply. The main towns of Chili- the projected demand within the Greater Lusaka labombwe, Chingola, Mufulira, Kitwe, Kalulushi, area in 2030 of 752,800 m3 per day and require Ndola and Luanshya source most or all of their the present water right for 200,000 m3 a day be in- water supplies from rivers. The risks these systems creased to a minimum of 630,000 m3 a day coupled face from contamination of their source water with significant investments. Interim investments varies, but risks are extremely high in the cases to support demand projections until 2015 require an of Chingola and Mufulira, and probably high for estimated US$131 million, including US$80 million Kitwe. Water quality compliance among the CUs is for a new intake, treatment works and transmission generally acceptable, but monitoring only includes pipeline from the existing works on the Kafue River. biophysical parameters and does not include mea- Such developments would also have significant sures of heavy metal and chemical contamination. impact on the continued operating costs, with high Such contamination results in low pH water with pumping costs and associated energy demands. heavy metals both dissolved and in suspension With increasing demands being placed upon the (such as lead, copper and zinc). Despite ongoing at- Kafue (Annex B) the allocation of additional water tempts at implementing mitigation measures, there for municipal purposes needs to be done within the is a lack of monitoring and regulatory enforcement. overall strategic allocation framework to address Chingola has served water that is known to have optimization of resources among other water rights adversely affected the health of its people to the ex- holders (such as irrigation, hydropower, and the tent that most of the population served directly by environment). the water supply system no longer trust the water A reduction in UfW by the CUs within the up- for drinking. In addition to the health implications, per Kafue Basin to the targeted 30 percent would the low pH increases corrosion, raises operation satisfy projected water demand and defer the need and maintenance costs and accelerates investment for investments in new sources of supply for the requirements. While Ndola and Luanshya are not Copperbelt until 2015. However, persistent water on the Kafue River and their water sources do quality issues pose potentially significant health not suffer from mine related contamination, the

22 Water and the Zambian Economy: Risk and Opportunity sewage effluent discharge point on the Kafubu main foreign exchange earners. Tourism is esti- River at Ndola is immediately upstream of the mated to contribute between six and ten percent intake pumping station for water supply. A lack of to GDP, with the direct and indirect contribution resources means that this sewage treatment plant of 176,000 nature based tourists in 2005 amounting is not always effectively operated or maintained, to approximately six and a half percent of GDP. and so often discharges raw or inadequately treated More than half of the tourists, 54 percent, come sewage. Problems of sewage contamination on the specifically to visit the Victoria Falls on the Zam- Kafubu River are often compounded by inadequate bezi River. Another 28 percent come to experience water for supply during the dry season. the wildlife of which most is water dependent and thus congregate in the vicinity of the main Environment and Nature Based Tourism rivers systems. Most protected areas encompass the country’s major rivers (such as the Zambezi The environment is recognized as an important River, with the West Lunga and Lower Zambezi water user in all recent water policy documents, National Parks; the Kafue River, with the Kafue although the governing water resources legisla- National Park; the Luangwa River, with the South tion from 1949 has no explicit consideration of the and North Luangwa National Parks; and the Lua- environmental use of water. Over 40 percent of pula River, with the Kasanka and Lavushi Manda Zambia’s land area is currently under protection, National Parks). Within this network of protected with 19 national parks and 34 game management areas, most investments are centered on tourism areas covering an area of over 22.4 million hectares. hot spots created by the rich and diverse riverine Many of these are wetland habitats, with eight sites and wetland habitat, such as the Busanga Plain in designated as wetland areas of significance under the Kafue National Park, the Bangweulu Swamps the RAMSAR Convention. Recently added sites in- in the newly-created Chikuni Partnership Park and clude the Busanga Swamps in the Kafue catchment, the Liuwa Flood Plain. These nature based tourists the Luangwa Flood Plains, Mweruwa Ntipa and contributed 16 percent of Zambian exports in 2005, the Zambezi floodplains. The existing area under over six percent of wages and income for informal protection in the Bangweulu Swamps was extended business, seven percent of Government revenue from 250,000 to 1.1 million hectares and the Kafue and nearly ten percent of formal sector employ- Flats site extended from 83,000 to 600,500 hectares ment equivalent to 54,000 formal jobs.8 (92 percent of total flooded area). Given the importance of the tourism sector, the These wetlands areas support a number of glob- high dependency of rural populations on the natural ally endangered and endemic species, such as the resource base and the need to ensure sustainability, a Kafue Lechwe (Kobus leche kafuensis), found in the framework for determining minimum environmen- flood plain areas of the Kafue Flats, the Sitatunga tal requirements is urgently needed. Environmental (Tragelaphus spekei), a semi aquatic antelope found requirements need to be determined to ensure that in the wetland areas of the Kafue and Kasanka Na- an adequate amount of water is maintained in the tional Parks, the endangered Wattled crane (Grus river, at the right time and of the right quality, in carunculatus), and the Shoebill stork (Balaeniceps order to main ecosystem health and functions. rex). Zambia also has the largest population of hip- These environmental allocations should be priori- popotami in Africa7 with half of southern Africa’s tized within the water allocation framework at the 80,000 hippopotami, more than 25 percent of the national and catchment level to ensure a sustainable African population, with 20–25,000 individuals in platform for further development. The current legal the Luangwa Valley alone. This unique combination of wetland habitats and biotic diversity, along with the charismatic 7 Lewison, R. & Oliver, W. 2006. Hippopotamus amphibius. In: IUCN mega fauna, provide the basis for the country’s 2007. 2007 IUCN Red List of Threatened Species. www.iucnredlist. org. Downloaded on 11 April 2008. nature based economic tourism. The rapidly ex- 8 The Real Economic Impact of Nature Tourism in Zambia. panding tourism industry is now one of Zambia’s Natural Resources Consultative Forum 2007.

23 Zambia: Managing Water for Sustainable Growth and Poverty Reduction framework makes no specific provisions for ensur- A six year process driven by a partnership being minimum environmental flow requirements, tween ZESCO (the dam owner and operator), the although provisions were included as early as 1954 MEWD (as the regulator) and the WWF resulted in the ordinance governing the diversion of water to in amended operating rules after it was demon- the Victoria Falls North Bank Power Station to ensure strated that management intended to benefit the the falls were maintained. Subsequently there have environment would not affect power production. been a number of site specific initiatives to protect However, problems were experienced early on some of the country’s unique wetland habitats. and there was a delay in releasing seasonal water from the Itezhi Tezhi Dam and the Kafue Gorge The Kafue Flats and Environmental Flows reservoir was kept at near full supply for most of the year. This was attributed to a lack of complete The Kafue Flats is a unique wetland habitat of grass- data on rainfall, water levels and discharge that lands, lagoons and reed beds situated between the made proper assessment of the hydraulic and Itezhi Tezhi and Kafue Gorge dams. The area sup- hydrological situation within the basin difficult. ports diverse wildlife, but since impounded of the Furthermore, the hydrometric network was not Itezhi Tezhi Dam in the 1970s has seen significant successfully installed to provide data to the model. reductions in the numbers of wetland species, such Ongoing efforts are aimed at addressing the defi- as the endemic Kafue Lechwe (Kobus leche kafuensis), ciencies in the existing model and developing a the encroachment of woody vegetation, including more inclusive stakeholder approach to integrated the invasive Mimosa pigra, and spread of aquatic management of the Kafue Flats. weeds such as Kariba weed (Salvinia molesta) and Water Hyacinth (Eichornia crassipes). A series of Deforestation initiatives facilitated by the World Wide Fund for Nature (WWF) in collaboration with the MEWD Zambia’s forest cover is estimated at nearly 50 per- and ZESCO over the past decade have been aimed cent. Including other wooded land and trees outside at developing a mutually acceptable strategy for forests increases the total forest and tree cover area the Kafue Flats that would address the impacts of to approximately 80 percent. Such forest cover the Itezhi Tezhi Dam on ecosystem and community provides important watershed functions and plays livelihoods. an important economic and social role, particularly The “Integrated Water Resources Strategy for in rural areas where they support natural resource the Kafue Flats” was aimed at establishing a water based livelihoods. Rapid growth and increasing management regime acceptable to all users that economic development is facilitating access to pre- minimizes threats to the environment, conserves viously remote areas creating a range of impacts at wetlands and permits new options for wetland the watershed level, increasing deforestation and ac- development. The Kafue River Basin Model, or celerating forest conversion to agricultural land (An- KAFRIBA, was proposed as a good simulation of nex E). The lack of electricity services has increased the natural flow regime of the Kafue River through reliance upon charcoal and fuel wood. Deforestation the Kafue Flats, improving the timing of the onset rates over the period 1990 to 2000 were estimated at of flooding, the volume of freshet released and the 2.4 percent per year (FAO). Consumption in 2001 size of the flood recession area in the dry season. was estimated at 7.2 million tons by the FAO, of Through the use of real time rainfall and water level which two-thirds was used as fuel-wood and char- information, the KAFRIBA model predicts reservoir coal in rural areas and one third mostly charcoal in water levels and hydrodynamic flooding patterns urban areas. for different release scenarios, as well as simulat- The loss of forest cover reduces rainwater infil- ing natural conditions without dams. To simulate tration to the soil profile, and results in increased natural flows, the model proposes that more water erosion and runoff. Less forest cover means less be released in January and February to provide for evapotranspiration and lower moisture in the at- a more gradual flood with a longer duration. mosphere, impacting on localized rainfall patterns

24 Water and the Zambian Economy: Risk and Opportunity and reducing carbon storage. When considering ing levels of poverty with fisheries providing an land-use changes and the high reliance on wood important food source among poorer, rural house- fuels, Zambia’s per capita carbon emissions in holds. More than 20 percent of the annual protein

2000 were 22.5 tons of CO2, which is very high in intake is from fish (FAO, 2007) and the value of fish comparison to per capita carbon emissions among production to human nutrition and incomes may other low income countries.9 Excluding emissions therefore be greater than GDP figures suggest. Due from land use, Zambia’s per capita emissions in to its function as a ‘safety net’, the fishing sector

2000 were 0.2 tons CO2. This could create signifi- also tends to absorb labor whenever the formal cant opportunities for accessing carbon financing sector contracts. mechanisms to support watershed management Annual fish production averages around 70,000 interventions aimed at aforestation and avoided tons (Figure 3.5) with roughly 30,000 artisan fish- deforestation measures. ers accounting for 85 percent of catch. Between 50 and 100 industrial producers associated mostly Fisheries with Kapenta production on lakes Tanganyika and Kariba, account for another 15 percent. Fisheries in The abundance of water and wetland habitats in the Congo Basin account for around 43 percent of Zambia supports significant fisheries resources the annual production, mainly through Kapenta which have important economic impact on poverty production in Lake Tanganyika (FAO, 2006). Al- alleviation, food security and livelihood diversi- though Kapenta was introduced to Lake Kariba by fication. At the national level, fishing contributes the Zambian Government in 1967, historical issues more than three percent to GDP and provides im- have resulted in lower catch efficiencies in compari- portant employment opportunities. It is estimated son to Zimbabwe where the capital intensive fishery that around 300,000 Zambian people earn part of has been estimated at more than US$25 million per their income, directly or indirectly, from the fisher- year (Figure 3.5). ies sector (FAO, 2006). Expenditure by households on fish tends to increase in proportion to increas- 9 World Resources Institute (http://cait.wri.org/)

Figure 3.5: Development in the offshore Kapenta fishery in Zimbabwe (1974–2000) and Zambia (1982–2000), CPUE in tons/boat/night Kapenta, Zimbabwe Kapenta, Zambia 25000 0.90 9000 0.35 0.80 8000 0.30 20000 0.70 7000 0.25 0.60 6000 15000 0.50 5000 0.20 R2 = 0.51 0.40 4000 0.15 10000

0.30 night tonnes/boat 3000 night tonnes/boat 0.10 tonnes, boat nights * 0.1 boat tonnes, nights * 0.1 boat tonnes, 5000 0.20 2000 0.05 0.10 1000

0 0.00 0 0.00 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 Catch (tonnes) eort * 0.1 CPUE Catch (tonnes) eort (tonnes/boat night) * 0.1 CPUE

Source: Zambia-Zimbabwe Fisheries Joint Annual Statistical Reports, Madamombe, 2002.

25 Zambia: Managing Water for Sustainable Growth and Poverty Reduction

Significant economic benefits, improved food the proportion of budget allocations makes it dif- security and a diversified rural economy could be ficult to identify the main priority or clarify the long- derived through interventions aimed at improv- term strategic plans for development of the sector. ing the impact of fisheries within multipurpose An analysis of the relative vulnerability of na- infrastructure investments. Although budget tional economies to climate change driven impacts expenditures are improving within the fisheries on fisheries10 suggests Zambia is highly vulnerable, sector, there is considerable scope to increase the ranking 13th globally and among the top ten African impact within rural centers through more efficient economies at risk (Figure 3.7). This is due to the expenditures in research, monitoring and extension combined effect of predicted warming, the relative services (Figure 3.6). Significant resources allocated importance of fisheries to the national economy and to the rehabilitation of training centers in 2003 was diet, and the limited societal capacity and livelihood not spent (US$4.45 million), while the expenditure options to adapt to the potential impacts. Water levels of resources allocated to monitoring, extension and and surface areas in wetland habitats, such as the Ka- training services averaged around 47 and 59 percent fue, Bangweulu and Lukanga, already demonstrate respectively over the last four years. The fifteen re- large fluctuations with rainfall and the pressure of in- search stations and aquaculture centers positioned creasing demands. These long-term risks are further at each of the major reservoirs and wetlands have accentuated by the negative impacts associated with received significant increases in budget allocation the degrading quality of surface water resources. but failed to realize expenditures in 2005 and 2006. More than 80 percent of resources allocated for research activities from 2004 to 2007 went unspent. Economic Impacts of Eighty percent of resources allocated for monitoring Hydrological Variability and less than half the resources allocated to extension and training services were not spent in 2005. Zambia faces significant water resources manage- However, expenditures in support to aquaculture ment challenges related to climatic variability, development have shown that more than 70 percent of resources have been used in recent years. The high 10 Allison et al. (2009): Vulnerability of national economies to levels of inter annual variation in absolute amounts the impacts of climate change on fisheries. Fish and Fisheries, allocated to the sector, and a lack of consistency in Vol 10: 173–196.

Figure 3.6: Department of fisheries allocations and expenditures

$8,000,000

$6,000,000

$4,000,000

$2,000,000

$0 2002 2003 2004 2005 2006

Unspent Expenditure

26 Water and the Zambian Economy: Risk and Opportunity

• ‘Worst rainfall sequence’ – the worst ten year Figure 3.7: Vulnerability of fisheries to climate rainfall sequence that has the highest value of change under IPCC scenario B2 (local development, annual precipitation coefficient of variation lower emissions) (CV) and the number of severe weather events. This scenario reflects in the historical rainfall patterns of the period 1986 to 1995 when three severe drought events occurred.

Rainfall Variability Impact on GDP

Rainfall variability has a significant effect on economic growth in Zambia, and the losses associated with some of the worst rainfall sequences in Zam- bia’s history are substantial. This is illustrated by the results of economy wide model simulations of GDP This integrates exposure, sensitivity and adaptive capacity. Colors represent quartiles with dark brown for the upper quartile (highest index value), yellow for the lowest losses for the three scenarios (Figure 3.8). quartile, and grey where no data were available (Allison et al., 2008). Under the ‘average pattern of rainfall’ (sequence average scenario), rainfall variability may reduce Zambia’s GDP by US$0.8 billion over the period of ten years (measured in 2006 prices). The recurring droughts and floods, and chronic un- size of Zambia’s economy would therefore be four derinvestment in water infrastructure. Frequent percent smaller by 2016 than it would have been water shocks such as droughts and floods have a in the same year without rainfall variability. The significant impact on the country’s economic per- accumulated GDP losses due to the rainfall vari- formance. Rainfall is also the most crucial climatic ability over the ten year period would be US$4.3 element whose abundance or deficiency strongly billion. This is equivalent to lowering Zambia’s an- impacts the national agricultural output. nual GDP growth by 0.4 percent each year between An assessment of economic impacts of hydro- 2007 and 2016. logical variability in Zambia using a hydro-economic Figure 3.8 also demonstrates that if the rain- model that combines the dynamic Computable Gen- fall patterns over Zambia’s next ten years were eral Equilibrium (CGE) model and hydro-crop model to replicate this ‘worst rainfall sequence’, then was carried out to simulate potential impacts of future the accumulated total losses in GDP due to the rainfall variation on economic growth and poverty more frequent severe droughts would be US$7.1 in the next ten years.11 A range of possible rainfall billion over the ten year period. This is equivalent patterns has been simulated using historical data. to reducing Zambia’s annual GDP growth by 0.9 The model was applied to assess economic impacts percent each year. of the following three rainfall scenarios (Figure 3.8): By applying the model results to the period of 1977 to 2007, on average, Zambia lost 0.4 percent • ‘Ideal rainfall sequence’ – a rainfall pattern with- of growth annually during this time period due to out considerable rainfall variability over the ten rainfall variability at an accumulated cost for this year period that allows crop yields to be stable. period of US$13.8 billion (in 2006 prices).12 Thus, Moreover, the level of yields and the allocation of land are assumed to grow steadily according to

estimated yield potentials drawn from field trials 11 For the models descriptions see Annex D. and historical trends in land expansion; 12 That is to say, if rainfall variability had not caused GDP growth • ‘Average rainfall sequence’ – a rainfall pattern to fall by 0.4 percent annually in 1977–2007, then Zambia’s economy, measured by GDP, would have been US$1.5 billion that assumes 1976 to 2007 average rainfall in all higher now (i.e., in 2006 and in 2006 prices) than it was actually years of the ten year period; and was. This is equivalent to 12.8 percent more than was actually observed in 2006.

27 Zambia: Managing Water for Sustainable Growth and Poverty Reduction

Figure 3.8: Rainfall variability impact on total GDP

19.5

Total GDP 17.5 Average ten-year loss: US$4.3 bil. Change in growth rate: –0.43% Worst ten-year loss: US$7.1 bil. 15.5 Change in growth rate: –0.90%

13.5

11.5 Value in billions of 2006 US dollars Value

9.5 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Ideal sequence Average sequence Worst sequence

Under the “ideal sequence”, without rainfall variability in this scenario, Zambia’s GDP grows at 6.7 percent per year between 2007 and 2016, with national GDP rising from US$10.2 billion in 2006 to $US19.6 billion by 2016.

while Zambia has undergone several decades of level of agricultural GDP by 2016 will be US$300 unsuccessful policies and suffered a number of million below what it had been under the ‘ideal- large external shocks, all resulting in huge economic rainfall scenario’. Thus, rainfall variability greatly cost to growth, rainfall variability has still contrib- reduces Zambia’s chances of achieving its national uted significantly to the country’s poor economic agricultural growth target of six percent per year, performance and lowered economic growth, even as set by the Comprehensive African Agricultural over the last decade when development has proven Development Program (CAADP). more successful. Agricultural losses are especially severe under the ‘worst rainfall sequence’, which replicates the Rainfall Variability and Agricultural Growth rainfall patterns of the ten year period between 1985/86 and 1994/95. Under this rainfall sequence According to the model simulation and as expected, accumulated agricultural GDP losses would rainfall variability has a much larger negative im- amount to US$3.1 billion. This means that, dur- pact on agricultural performance than on overall ing the ‘worst sequence’, agricultural GDP is 10.2 economic growth (Figure 3.9). Under the ‘ideal rain- percent lower due to rainfall variability than what fall scenario’, agricultural GDP rises from US$2.1 it would have been during an ‘ideal sequence’. billion in 2006 to US$3.6 billion by 2016 with 5.7 Agriculture’s average annual GDP growth rate percent of annual growth rate. Because agricultural during 2007 to 2016 would be 2.3 percent lower GDP growth is below total GDP growth (i.e. 5.8 than under the ‘ideal rainfall scenario’. Such a large percent) agriculture’s share of GDP falls from 20.4 decline in agricultural production would severely to 18.6 percent during 2006 to 2016 under the normal undermine the country’s development efforts. rainfall scenario. The model’s results also indicate that rainfall On average, rainfall variability causes a total variability reduces maize production by at least loss in agricultural GDP of US$2.2 billion over a 30 kg per capita and jeopardizes food security. The ten year period. This is equivalent to a reduction in model results indicate that rainfall variability lowers agriculture’s growth rate of one percentage point maize production, causing per capita availability to annually. With a lowered annual growth rate, the rise to only 145 kg per person by 2016 (only 20 kg

28 Water and the Zambian Economy: Risk and Opportunity

Figure 3.9: Rainfall variability impact on agricultural GDP

4.0

Agricultural GDP 3.5 Average ten-year loss: US$2.2 bil. Change in growth rate: –1.01% Worst ten-year loss: US$3.1 bil. 3.0 Change in growth rate: –2.29%

2.5

2.0 Value in billions of 2006 US dollars Value

1.5 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Ideal sequence Average sequence Worst sequence

more than the 2006 level). Moreover, if the rainfall period. There will thus be 300,000 more people patterns in the next ten years are similar to those predicted to be living under the poverty line in described under the ‘worst rainfall sequence’, per 2016 than there would have been without rainfall capita maize availability supplied by domestic variability. Under the ‘worst rainfall sequence’, production by 2016 declines to a level below that in the national poverty rate is higher by 4.9 percent 2006. Rainfall variability therefore greatly reduces by 2016. Thus, if Zambia were to experience a ten food availability in Zambia, thus necessitating food year rainfall pattern similar to that of 1984/85 imports and food aid during periods of severe to 1994/95, then most of the country’s potential droughts. reductions in poverty over the next ten years would be lost, and the number of poor people in Rainfall Variability and Poverty Zambia would rise from its current 7.4 million to 7.6 million by 2016. Apart from its adverse effects on basic food security, rainfall variability has large impacts on household Impact of Severe Droughts and Floods incomes and poverty. This can be seen in Figure 3.10 which shows the national poverty headcount rate Severe droughts and floods also have large im- over the next years resulting from model simula- pacts on household incomes in years of droughts tions. The poverty rate is the share of the popula- and floods. The impacts of severe water shocks on tion whose per capita expenditure falls beneath the growth and poverty headcount are shown in Table national poverty line.13 3.6 in the particular year for each of the three rainfall The modeling results demonstrate that rain- scenarios examined. fall variability will slow poverty reduction over As illustrated in the simulation, the national the next ten years. As shown in Figure 3.10, the poverty rate rises dramatically by 7.5 percent in a national poverty rate for the ‘average scenario’ is year under the ‘worst rainfall scenario’. If a severe above the line representing the national poverty rate under the ‘ideal rainfall scenario’. On average, 13 rainfall variability increases national poverty by The national poverty line in 2004/05 was US$300 per person per year or US$0.8 per day. Converted to 2006 current prices, the 2.3 percentage points by the end of the ten year poverty line is US$496 per person per year or US$1.36 per day.

29 Zambia: Managing Water for Sustainable Growth and Poverty Reduction

Figure 3.10: Rainfall variability impact on national poverty headcount rate

70 68 66 64 62 60

58 National poverty 56 Average ten-year loss: 300,000 people Change in growth rate: +2.25 54 Worst ten-year loss: 648,000 people Change in growth rate: +4.85 52 Population under the national poverty line (%) poverty under the national Population 50 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Ideal sequence Average Sequence Worst sequence

drought took place in 2007, this would imply an try. Indeed some of the more substantial declines in increase in the number of poor people by 836,000 economic growth over the last three decades have from the level in the same year without drought. occurred during major drought years. Rainfall vari- Poverty also rises significantly in years with modest ability is especially important for the agricultural drought, with an increase of 3.9 percent and a rise sector, which is heavily dependent on rainfall due in the absolute number of poor people of 435,000 a to the country’s limited irrigation capacity. Rainfall year. Finally, the national poverty rate rises by 2.4 variability may also undermine attempts to reduce percent in years which experience severe flooding, poverty, since most of Zambia’s poor population live pushing 273,000 more people below the poverty in rural areas and are heavily dependent on rain fed line in such years. agricultural incomes. Overcoming rainfall variability Table 3.6 summarizes the findings from the therefore poses a significant challenge to maintain- analysis of the impacts of rainfall variability on eco- ing agricultural growth, significantly reducing pov- nomic growth and poverty. While the country has erty, and achieving the Millennium Development performed well since the late 1990s, with positive Goals. It also heightens concern over potentially economic growth and poverty reduction, growth in negative impacts of climate change. Together rainfall agriculture remains volatile despite improvements variability and climate change places considerable in the policy environment. This can, at least in part, pressure on Zambia’s Government to invest in water be attributed to high rainfall variability in the coun- infrastructure and improve productivity.

30 Water and the Zambian Economy: Risk and Opportunity

Table 3.6: Summary: the impact of climate variability Ten-year climate sequences One-year drought and flood events Average over Worst With severe With modest With severe 30 sequences sequence drought drought flood Change in GDP growth rates (%-point) Total GDP –0.43 –0.90 –6.6 –4.0 –2.3 Agricultural GDP –1.01 –2.29 –22.7 –15.7 –9.4 Cumulative or total loss in GDP, 2006–16 (US$ billion) Total GDP 4.3 7.1 2.6 1.6 0.9 Agricultural GDP 2.2 3.1 1.8 1.2 0.7 Change in national poverty (%-point) 2.2 4.9 7.5 3.9 2.4 Increase in absolute poor (1000s) 300 648 836 435 273 Source: Results from the Zambian economywide model. Note: Ten-year losses are cumulative for the whole 2006–2016 period measured in 2006 prices; one-year total losses are for the year in which the extreme climate event takes place (also measured in 2006 prices); ‘severe drought’ replicates the 1991/92 drought; ‘modest drought’ replicates the 1994/95 drought; and ‘severe flood’ replicates the 2006/07 flood.

Capitalizing on 4 Opportunities and Overcoming Constraints: Priority Responses

Most of the key economic sectors of the Zambian economy are directly dependent upon secure availability and sustainable sources of water. In order to increase the resilience of the economy against the impacts of water shocks, as demonstrated in the preceding chapters, and support diversification of the economy there is an urgent need to capitalize on the relative abundance of water. This can be achieved through implementation of a series of priority programs focused on the development of an adequate water infrastructure platform and continued improvements in the management of water resources. Building on the previous analytical framework and guided by the Integrated Water Resources Management and Water Efficiency Imple- mentation Plan (IWRM&WE IP), this chapter emphasizes the need for investments in water resources development and management within six priority thematic areas. These thematic priorities were developed through an iterative consultative process of identification and prioritization which culminated in working session of stakeholders in Lusaka in October, 2008. This included representation from different sectors of Government, relevant water users, development partners, the private sector, academics and researchers, NGOs and community representatives, all brought together to discuss an appropriate sectoral response to challenges in the water sector.

Addressing Zambia’s Water Scarcity: Underlying Principles

The relative abundance of water, and the fact that available freshwater supplies are 60 times larger than the levels of withdrawal for economic consumption, masks Zambia’s water scarcity. This is manifested in the imbalance between water availability and demand and the lack of timely and reliable access to water resources for different economic and social groups. The risk of water scarcity, and the opportunity to overcome it, depends not only upon the physical endowments of water but also the institutional, technical and infrastructure capacity of a country to manage water successfully to the

33 Zambia: Managing Water for Sustainable Growth and Poverty Reduction satisfaction of all stakeholders, supported by the Annual GDP and agricultural growth are cur- availability of financial resources to address water rently lowered on average by 0.4 and 1 percent, related issues. respectively, due to the impacts of water shocks According to the categorization undertaken (see Chapter 3). Improving water resources man- by the International Water Management Institute agement and investing in the development of (Box 4.1), Zambia can be classified as a country of an appropriate infrastructure platform can help economic water scarcity. While water resources are uncouple the economy from the impacts and abundant, they are not effectively applied to the uncertainty associated with rainfall variability. country’s development goals due to the limiting Reliable and adequate supplies of water of the institutional, technical and financial capacity of right quantity and quality are critical to reduce the country. Overcoming the economic constraints economic risks and can contribute significantly associated with water scarcity will depend on to increased production and productivity within improved governance within the water sector and economic sectors to achieve both better water ac- capacity to effectively determine access, use and cess and support to national development priori- the allocation of water. Effective interventions ties (Box 4.2). are needed to strengthen the national capacity to Balanced investments in infrastructure and in- develop and manage water resources, supported stitutions to increase the productive application of by the necessary financial resources, if Zambia is water resources, mitigate the impacts of recurrent to benefit from its water as a source of national floods and droughts and provide the platform for economic prosperity. economic growth should support the development Increasing demands for water as a result of objectives of the FNDP and realization of Vision continued population growth and urbanization, 2030. It should also build upon and be consistent concerted efforts toward economic diversification with the priorities identified in IWRM&WE IP. through industrial development and promotion of Based on this, the process of identification and agricultural and rural development, are likely to prioritization of priority programs was embedded be compounded by increasing hydrological vari- within three underlying principles: i) promoting ability as a result of climate change and increasing economic growth; ii) building climate resilience and problems associated with water quality degrada- reducing rural poverty; and, iii) fostering interna- tion. As a result, localized issues associated with tional cooperation. physical water scarcity are expected to intensify Developing a water resources infrastructure with increasing competition for water between platform to protect and strengthen economic gains key economic sectors and between national and will be critical for continued growth, particularly international interests. in key sectors such as energy, agriculture and tour-

Box 4.1: Types of water scarcity

Physical water scarcity: More than 75 percent of river flows are al- human purposes, but malnutrition exists. These areas could benefit located to agriculture, industries or domestic purposes (accounting by development of additional blue and green water, but human and for recycling of return flows). This definition of scarcity, relating water financial capacity are limiting. availability to water demand, implies that dry areas are not necessarily water scarce, e.g. Mauritania. Little or no water scarcity: Abundant water resources relative to use. Less than 25 percent of water from rivers is withdrawn for human Economic water scarcity: Water resources are abundant relative to wa- purposes. ter use, with less than 25 percent of water from rivers withdrawn for

Source: IWMI Comprehensive Assessment of Water Management in Agriculture, 2007

34 Capitalizing on Opportunities and Overcoming Constraints: Priority Responses

Box 4.2: Examples of water interventions as development opportunities

• Higher economic resilience to water shocks due to additional • Improved food security and climate resistance due to irrigation water storage expansion • Sustained economic growth and reduced investment risks due to • Decreased productivity losses due to poor health through im- improved assurance of water supply to growth poles proved water quality management / access to safe water sources • Increased sustainability of rural livelihoods due to better manage- for drinking water supply ment of water resources in micro-watersheds (small scale water • Better business development and reduced private investment risks resources development) due to reliable and sufficient water supplies • Accelerated economic growth through increased electrification • Promoted regional economic cooperation through participation due to development of large water infrastructure for hydropower and dialogue over the management of international river basins

ism. Targeted assurance of water supply for growth region to unlock significant investment potential. centers and growth poles is an essential part of any Zambia is strategically positioned to assume an strategy for the acceleration of economic growth important role in integration, cooperation and and diversification. Realizing the growth potential collaboration over international water resources of water resources development in Zambia will re- management. There are several examples in sub- quire mechanisms to ensure the optimal allocation Saharan Africa of international river and lake ba- of water among various sectors in order to maximize sins that illustrate the value of cooperative water economic returns and ensure sustainable water resources development and management and utilization, especially in the Kafue Basin. Zambia’s responsible and cooperative position will Investments should increase resilience to the be an important determinant of the success of such impacts associated with climate change and ad- initiatives as the Revised SADC Protocol on Shared dress rural poverty. The 2006/07 floods affected Watercourse Systems and the Zambezi Watercourse 1.5 million people and were estimated to cost Commission. over US$4.5 million in emergency operations and US$80 million during the recovery phase. A severe drought event similar in intensity to the 1992 Priority Areas for Water drought can cost the country up to 6.6 percent loss Investments in Zambia in its growth rate, US$2.6 billion in GDP loss, and increase the national poverty rate by 7.5 percent. Building Legal, Policy and Institutional Investments to reduce climate vulnerability should Frameworks include development of additional storage capacity, improved management of the existing stock of In 1994, the Government adopted The National infrastructure, strengthened hydro-meteorological Water Policy which provided a progressive policy services and monitoring, improved catchment framework for the sector. This recognized the need protection and management coupled with risk for separation of water resources management from assessment and mitigation measures. Increased that of water supply and sanitation. Key aspects of agricultural productivity through appropriately the policy include: designed irrigation investments can also significantly mitigate impacts associated with rainfall • Recognizing the importance of the water sector variability (Box 4.3). in overall socio-economic development; Fostering international cooperation in water • Ownership of water resources vested in the state; management could consolidate Zambia’s strategic • Promotion of water resources development geographic position and leadership role within the through an integrated management approach;

35 Zambia: Managing Water for Sustainable Growth and Poverty Reduction

Box 4.3: Water investments to reduce hydrological vulnerability—the case of irrigation

An irrigation scenario was estimated using the Zambia hydro- vulnerable Region IIa1 (Figure 2.3). The assumptions for the scenario economic model (Annex B), focusing on the Zambia’s most drought are summarized in Table A.

Table A. Assumptions on investment scenario Irrigation scenario Newly irrigated lands in Region IIa1 (ha) 10,000 Allocation of new lands in winter season (ha) Soybeans 4,000 Vegetables 2,000 Wheat 4,000 Cropping intensity index for newly irrigated land Before investment 1.0 After investment 2.0 Increase in yields on newly irrigated land (%) Maize (wet summer season) 25.0 Soybeans — Vegetables 25.0 Wheat — Note: Cropping intensity index is the number of annual crops grown on the same piece of land. We assumed that newly developed irrigation areas in the simulations are those currently rainfed maize land, such that double cropping becomes possible.

It was assumed that the irrigation expansion will provide farmers growing on irrigated lands were assumed no longer affected by an- with three benefits: improved land intensity (irrigation allows having nual variations in rainfall, except during severe droughts and floods. second winter crops), higher yields than rain-fed crops and mitigate The model simulations demonstrated that irrigation investments the negative impacts of rainfall variability. The irrigation schemes mitigate the negative consequences of rainfall variability on economic were assumed to be managed on a commercial basis. Yields of crops growth and poverty reduction (Table B).

Table B: Economic growth and poverty under investment scenarios

Average rainfall sequence Worst rainfall sequence Before invest. Irrigation invest Before invest. Irrigation invest Total GDP Change in growth rate (%-point) –0.43 –0.42 –0.90 –0.88 Cumulative ten-year loss (US$ bil.) 4.30 4.17 7.10 6.97 Agricultural GDP Change in growth rate (%-point) –1.01 –0.94 –2.29 –2.17 Cumulative ten-year loss (US$ bil.) 2.20 2.10 3.10 3.00 Change in poverty headcount Poverty rate in 2016 (%-point) 2.25 2.16 4.85 4.71 Number of poor (1000s) 300 288 648 629 Source: Results from the Zambian economy-wide model

Gains of the irrigation expansion in Region IIa1 result in a significant billion. However, under the irrigation scenario, the additional 10,000 reduction in the cumulative economy wide losses associated with hectares of newly irrigated land decreases the losses in annual GDP rainfall variability. Under the “normal rainfall scenario”, national GDP growth and, over a ten year period, this is equivalent to lowering the grows at 6.7 percent. As discussed in Chapter 3, rainfall variability cumulative cost of GDP by US$130 million. Moreover, if future rainfall reduced annual growth rate by 0.43 percentage points on average patterns replicate Zambia’s worst historical rainfall sequence (i.e. (Table B), causing an estimated GDP losses over ten years of US$4.3 1985 to 1995) then the returns to the water investments are larger

(continued on next page)

36 Capitalizing on Opportunities and Overcoming Constraints: Priority Responses

Box 4.3: Water investments to reduce hydrological vulnerability—the case of irrigation (continued)

(last two columns of Table B). Gains in agricultural GDP are even poverty rate under the average rainfall variability scenario would bigger and a closer approximation of direct benefits resulting from ir- be 2.25 percent higher in 2016 on average than it would have been rigation investments. Before the new investments, rainfall variability without the effects of rainfall variability. The simulations demonstrate caused national agricultural GDP’s growth rate to decline by 1 percent that under the irrigation investment, the poverty rate is reduced to in each year. Under the irrigation investment scenario, agriculture’s 2.16 (Table B). This is equivalent to lifting an additional 12,000 people growth rate declines by only 0.94 percent respectively. The national above the poverty line by 2016.

• Definition of clear institutional responsibilities objectives are supported by a number of recom- for all stakeholders in the water sector; mended strategies. • Development of an appropriate legal and insti- A revised Water Resources Development Bill tutional framework for effective management of has been prepared in order to translate the provi- water resources; sions of the revised Policy into Law and to maximize • Promotion of disaster preparedness to mitigate the economic benefit of Zambia’s water resources in the impacts of extreme occurrences; and a more equitable and sustainable manner. The draft • Recognition of water as an economic good. Bill proposes a modern approach to water resources management that is supported by the IWRM&WE In September 2004, a process was initiated to IP. The IWRM&WE IP emphasizes the vital im- review the 1994 National Water Policy in order to portance of water infrastructure development in provide a clear vision and holistic policy direction reducing the uncertainty of access to water due to for the water sector that could align the institu- rainfall variability and water shocks and is intended tional and legal framework with modern principles to ensure that implementation of actions in the water of water resources management. There was also a sector are done in a coordinated, effective and ef- need to assess the progress made in implementa- ficient manner. The Water Resources Development tion of the Policy and to provide a more contem- Bill proposes a broad range of changes to realign the porary framework. The Policy had been overtaken institutional arrangements towards the objectives by events that saw an increased focus on service of Integrated Water Resources Management.14 The delivery through the MDGs, ratification of the Bill proposes the establishment of new institutional SADC Revised Protocol on Shared Watercourses structures to increase efficiency, comprising: and initiatives such as the National Development Plans and NEPAD. • An autonomous National Water Resources The revised Policy declares the principles of Management Authority (NWRMA) to replace equitable access to water, priority use of water in the existing Water Board. The NWRMA will be satisfying human and environmental needs, and responsible for all water resources management public ownership of the country’s water resources. functions except policy formulation and guid- The policy also states that poverty reduction ance as well as issues relating to shared water should be addressed as a primary development courses (notably the Zambezi River); goal in water management decisions, the catch- • Catchment Councils (where feasible) substi- ment is the main water management unit, and tuting the present Provincial setup for water Zambia’s water resources shall be used, developed, management; and controlled in a sustainable manner for the benefit of present and future generations. Seven- 14 Integrated Water Resources Management and Water Efficiency teen separate policy measures with 47 different Implementation Plan, Ministry for Energy and Water Develop- objectives are outlined in the revised Policy. These ment, Zambia 2008.

37 Zambia: Managing Water for Sustainable Growth and Poverty Reduction

• Sub-Catchment Councils (where feasible) ral population is a priority focus of the FNDP where complementary to the District setup; water is one of the most important production assets. • Water User Associations, which should be Zambia is classified as part of the “cereal-root” formed on a demand driven basis; livelihood zone where livelihoods are characterized • A Water Resources Development Fund to make by: (i) a high prevalence of rural poverty; (ii) water investments benefit the poor managed by an as the principle binding constraint for agricultural autonomous board with NWRMA as secretariat production and for other rural livelihood activities; (e.g. dam and canal construction for small scale and importantly, (iii) a high potential for water inter- irrigation schemes); and ventions in terms of physical water control because • A Department of Water Resources to substitute of the availability of water for additional utilization. the present DWA and be responsible for policy Countries within this region are considered to have formulation and guidance as well as interna- sufficient water to support broad opportunities for tional rivers. agricultural growth and a high potential for poverty reduction through water interventions (Figure 4.1). The urgent need to implement a modern, However, such countries are subject to significant integrated approach toward development and annual and inter-annual variability that negatively management of Zambia’s water resources requires impacts agriculture and livelihoods. As a result, conclusion of the reform process. Though reforms managing rainfall variability over time and space is are complex and time consuming, they should be considered the most critical intervention in unlock- advanced on numerous fronts. It is likely that sub- ing this high potential. sidiary legislation will need to be part of the new leg- Community based sustainable management islative framework to enable rapid implementation and development of local watersheds and ground- of the new legal environment and a parallel process water resources in the poorest areas is crucial for the establishing and capacitating the appropriate insti- sustainability of local livelihoods and their adapta- tutional framework should be initiated. Agreement tion to climate variability. Addressing the challenges on the proposed institutional framework of national of securing livelihoods and increasing the resilience and catchment level authorities, along with water of rural households to the impacts associated with user associations, is needed before they can be estab- climate change can be accomplished through rolling lished in key river basins. Revitalization of the Water out a program of small scale, multi-purpose water Resources Action Program (WRAP), with support resource development. from the EU, is assisting with a series of measures to Measures include construction of small hy- establish sustainable mechanisms for financing the draulic structures, local mini- and small-scale hy- institutional framework, as well as the continued dropower plants, the development of smallholder operation and maintenance of hydrometric networks, irrigation schemes, flood protection and measures data management systems, and supporting contin- to address water pollution. Opportunities for in- ued investments in water resources development. creasing food security and expanding production also include enhancing rain-fed agriculture with Small Scale Water Development for rainwater harvesting and soil moisture conser- Reducing Rural Poverty vation. Where the development of smallholder agricultural development is impeded by a lack of Two thirds of the Zambian population live in rural market access and transport networks, investment areas where they depend on small scale farming. in large scale irrigation infrastructure can have Despite consistent economic growth over the past considerable effects, particularly where better- decade, this has not afforded sufficient economic resourced producers can bring market access and opportunities for the rural population and rural create local employment opportunities. Systems poverty remains persistently high. The rural poor that allow for diversification of livelihoods and depend heavily on farming, fishing and livestock economic growth through multi-purpose water re- and provision of additional infrastructure to the ru- source development, such as livestock production,

38 Capitalizing on Opportunities and Overcoming Constraints: Priority Responses inland fisheries and aquaculture, need to receive Figure 4.1: Potential impact of water interventions special attention. IBRD 37347 NOVEMBER 2009 Several efforts have been made to carry out on poverty alleviation (FAO, 2008) detailed inventories of the hydraulic infrastructure in Zambia and a recent effort to compile a dam inventory for the country suggests the number of TUNISIA such structures is between 2,000 and 3,000. This MOROCCO ALGERIA LIBYA ARAB REP. Former OF EGYPT is in contrast to the more than 10,000 small dams Spanish Sahara estimated in Zimbabwe. The majority of these are CAPE MAURITANIA VERDE MALI NIGER CHAD ERITREA situated in the drought prone areas of the Eastern, SENEGAL SUDAN THE GAMBIA BURKINA DJIBOUTI GUINEA-BISSAU GUINEA FASO Lusaka, Central and Southern provinces, where NIGERIA SIERRA LEONE CÔTE GHANA ETHIOPIA D’IVOIRE CENTRAL LIBERIA AFRICAN REP. CAMEROON low rainfall and high variability means that water SOMALIA TOGO UGANDA BENIN CONGO KENYA needs to be conserved for livestock, agriculture EQUATORIAL GUINEA GABON SÃO TOMÉ AND PRÍNCIPE DEM. REP.RWANDA OF CONGO BURUNDI and domestic use. Spearheaded by local farmers TANZANIA SEYCHELLES

COMOROS and Government efforts, construction of low cost ANGOLA MALAWI ZAMBIA earth dams and water impoundment earth bunds ZIMBABWE MOZAMBIQUE MADAGASCAR for drought relief has been actively pursued since NAMIBIA BOTSWANA

SWAZILAND the early 1990s. However, many are in a state of POTENTIAL FOR POVERTY REDUCTION: SOUTH AFRICA LESOTHO disrepair because of breaching, lack of or insufficient HIGH MODERATE maintenance and/or poor design. LOW A comprehensive program of investments in small multi-purpose water storage could sub- Source: Water and the Rural Poor: Interventions for Improving the Livelihoods in substantially address rural poverty by increasing the Saharan Africa FAO/IFAD 2008. resilience and diversification of rural livelihood strategies, improving water supply and sanitation, access to electricity, the development of irrigation ties within particular catchment areas have resulted services and opportunities for aquaculture and in localized physical scarcity. Rivers such as the livestock watering in many rural areas of Zambia. Lunsemfwa, Chalimbana and Kafue are already fac- Optimal small-scale water interventions are needed ing competing demands among various users and to satisfy productive and human water demands in economic sectors. The hydro-metric networks and rural communities. Such a program could provide information management systems for assessing the the foundations for development of appropriate relative merits of different applications and facilitat- systems for implementation of the Water Resources ing an optimized economic allocation framework for Development Fund, which is intended to make pro- water are fragmented. In addition to defining and poor investments. Resources should also be made enforcing water use rights, the Government holds an available to support a comprehensive rehabilitation important role in comprehensive planning of water program to repair and upgrade existing infrastruc- resources, taking into account competing demands ture. Institutional measures should be developed and opportunities for coordinated management. and implemented to strengthen inter-sectoral col- The increasing demands on water resources in spe- laboration and maximize the multiple benefits that cific areas therefore require increasing involvement can accrue through such infrastructure. of Government to ensure equity and optimization of economic investments in the national interests. Ensuring Economically Efficient Water Increasing irrigation demands and the devel- Allocation: The Case of the Kafue opment of hydropower production, coupled with River Basin the requirement to protect the environment of the Kafue Flats, increasingly requires Government Despite the relative abundance of water in Zambia involvement in ensuring environmental protection and low levels of withdrawals, concentrated activi- and optimization of water resources allocations

39 Zambia: Managing Water for Sustainable Growth and Poverty Reduction within the Kafue River basin. The Kafue catch- production by the potential ITT and KGU stations ment accounts for 80 percent of the country’s total due to irrigation expansion and raising the ITT dam irrigated area, with 80 percent of this in the Kafue level. Details are provided in Annex B. Flats sub-catchment. Of the irrigated area within While the preliminary analysis does not pro- this sub-catchment, 66 percent is under sugar cane vide the resolution required for specific investment production. Annual withdrawals of water for irriga- decisions, it highlights the process needed to assess tion in the Kafue River, both upstream and down- different water resources development options stream of the Itezhi Tezhi Dam, are already reaching based on economic criteria and taking into account the upper limits of the level that can be sustained multi-sectoral water allocation needs. The analysis under the present level of dam development. In suggests that a 10,000 ha expansion of irrigation order to maximize the development opportunities for sugar below ITT would not be economically and ensure the accrual of economic benefits there viable unless the level of the ITT dam is raised.16 is a need to optimize the allocation of water among In the absence of this increase in storage capacity competing priorities. in ITT, the irrigation expansion would lead to the Currently, multiple entities, both public and sub-optimal allocation of water, substantial reduc- private have interests in the decision making pro- tions in power production and economic losses for cess affecting the development, allocation and use Zambia. The analysis also suggests that maximum of water resources in the Kafue catchment. These economic benefits would accrue with no expansion include the MEWD; Ministry of Agriculture and of irrigated sugarcane downstream of ITT but an Cooperatives; Ministry of Tourism, Environment expansion of wheat production above ITT coupled and Natural Resources; ZESCO; large commercial with a substantial increase in the firm hydropower farmers; smallholders and fishermen, and others. production at both the proposed ITT hydropower Planning, decision-making and investments take plant and the existing KGU resulting from raising place at multiple levels and concerns a range of of the ITT dam wall. activities (navigation, hydropower production, ir- A rigorous planning function needs to be es- rigation, flood control, water and sewage services tablished to ensure that water investment decisions etc). However, planning is often done on project-by- are based on criteria of economic, environmental, project or sector-by-sector, leading to sub-optimal financial and institutional feasibility. There is a and inefficient investment decisions. need to consolidate the existing systems through To demonstrate the potential physical and eco- implementation of a comprehensive, integrated nomic impacts of different development options information management system that is linked in the Kafue River a simple model was developed to water rights. Elevating such water resource to evaluate the impacts associated with irrigation, planning and management to the scale of natural environmental releases and hydro-power genera- hydrological units such as river basins, is necessary tion. The model built upon previous efforts15 and to ensure that the opportunity costs associated with considered three options: (i) potential increases in alternative water uses are taken into account. This irrigated agriculture in the middle basin between would allow maximizing total economic benefits the Copperbelt and Itezhi Tezhi (mostly wheat); (ii) of water resources use through securing water sup- increased irrigation in the Kafue Flats (mostly sugar plies for high value uses without compromising the cane); and (iii) raising the full supply level of the Itezhi Tezhi reservoir by three and five meters. The 15 The effects of irrigation development options were assessed proposed water development scenarios were evalu- in: “Phase 2, the Strategic Environmental Impact Assessment” ated based on the economic cost-benefit analysis. September 2003, by Scott Wilson Piesold (SWP). This study Benefits included: (a) net economic benefits from the modeled a base case and 9 scenarios of patterns and levels of irrigation development in the middle sub-basin and the Kafue irrigation expansion of wheat and sugar production Flats. The effects of raising the Itezhi Tezhi dam by 3, 5, and 10 above and below ITT dam respectively (10,000 ha meters were modeled in: “Feasibility Study of the Itezhi Tezhi Hydroelectric Project”, by Harza Engineering International LP each, calculated based on the irrigation expansion and Rankin Engineering Consultants, April 1999. model); and (b) economic benefits or losses in power 16 Details of the analysis and its results are attached in Annex B.

40 Capitalizing on Opportunities and Overcoming Constraints: Priority Responses environmental and social security demands. It will a list of possible next steps in providing protected be important to ensure that this is developed with water supplies. due consideration for the proposed decentralized The area covered by tailings dams, waste rock water management system. dumps and highly contaminated soils in the Cop- perbelt has been estimated at 78 km2. These deposits Addressing Environmental Sustainability in contaminate the water through leaching, where wa- the Copperbelt ter percolates downwards through waste deposits undergoing weathering and dissolves soluble salts The issues associated with environmental degrada- containing heavy metals, weak acids and other tion in the Copperbelt as a result of mining and in- contaminants and through erosion and slope failure dustrial developments have the potential to further which then transport sediments containing heavy undermine the availability and sustainability of metals into watercourses. Action to identify and long-term economic growth in water related sectors. remedy the most urgent specific risks is under way Environmental pollution caused by mining in the through the CEP. Most of the waste deposits appear, Copperbelt was initially addressed in part through from aerial imaging, to have little or no vegetative the Labor Reduction Program financed under the cover. Re-vegetation of tailings dams and mining Public Sector Reform and Export Promotion adjust- waste heaps may therefore provide the most comment credit (2000/01). Since 2004 the World Bank has mon and effective means of reducing leaching and continued to support the Copperbelt Environment erosion, preventing dust generation and helping Project (CEP) through the Environmental Manage- with stabilization of slopes at the greatest risk, such ment Facility. This is aimed at improving compliance as those no longer receiving waste. The emergence of the mining sector with environmental and social of funds to assist countries in accessing carbon cred- regulations and is helping to raise the consciousness its through extensive and permanent afforestation of the mining companies as to their responsibilities provides an interesting an innovative option for for the wellbeing of both the environment and the supporting such watershed initiatives. communities at risk in the Copperbelt. The current capacity within the country to Although background levels of heavy metals in ensure the timely, effective and continuous collec- the Copperbelt region are naturally high, the present tion and analysis of water quality data needs to be inflows of pollutants and the risk for increased levels enhanced. This would not only assist with monitor- of contamination require a long-term, systematic ing the quality and status of the resource base, but approach. It will be many years before the risks of provide for enforcement of standards and deter- water contamination can be brought fully under mination of help implications. This would require control and sustained mechanisms to address the upgrading of existing laboratories to an accredited enormous loads from past mining are especially standard, provision of a range of scientific advice urgent. In addition to the continued efforts of the services, and the establishment and running of a CEP, a number of additional interventions are rec- systematic monitoring program where the monitor- ommended in order to deal with specifically water ing of inorganic substances is very important. related issues in the Copperbelt. One possible solution to reducing the current International Water Management health risks associated with the levels of stream pollution is to substitute the current use of pol- Recognizing the strategic importance of Zambia’s luted surface waters for towns on the Copperbelt geographic position within the Zambezi and Congo to protected groundwater sources. The contamina- catchments, and the obligations that this implies tion risks from mine related discharges appear to under international law and the provisions of the be highest for Chingola, Mufulira and Kitwe, with Revised SADC Protocol on Shared Water Courses Ndola and Luanshya having needs for alternative (Revised Protocol), the Government has increased sources due to other reasons. These alternatives are the allocation of resources to the Department of addressed in greater depth in Annex C together with Water Affairs in support of an explicit International

41 Zambia: Managing Water for Sustainable Growth and Poverty Reduction

Waters Program. The Revised SADC Protocol pro- reforms also meant that there was a limited frame- vides a framework for cooperative management work for facilitating international water resources within both the Congo and the Zambezi River Ba- management and capacity, including expertise in sins, with specific provisions for the development international waters. The process instead led to the of individual river basin agreements. However, development of the SADC Protocol on Shared Water the existing legal framework for water resources Courses, to meet the needs of all SADC Member in Zambia explicitly excludes any provisions for States. A revised version of the protocol was agreed international waters and in the absence of the Water in 2000 which was signed and ratified by all of the Resources Development Bill it remains unclear what then 14 SADC Member States, and is now in force. governs these. The ZACPLAN process, including negotiations Accounting for 28 percent of Zambian territory, on establishment of the ZAMCOM, was reinitiated there is little development pressure on the upper through the launch of the ZACPRO6, phase II proj- reaches of the Congo River Basin and little urgency ect in October 2001 with the assistance of the gov- for consolidating cooperation among the six prin- ernments of Sweden, Norway and Denmark. The ciple riparian states.17 Efforts are being undertaken immediate objectives of ZACPRO 6.2 were (i) to set however to formalize participation within existing up the regional and national enabling environment arrangements. Zambia is also a riparian country of necessary for strategic water resources management the Lake Tanganyika along with Burundi, Congo through ZAMCOM; (ii) to establish water resources DR, and Tanzania, and cooperative management management systems including models, tools and of the lake was initiated by signing and ratifying guidelines; and (iii) to develop an integrated water The Convention for Sustainable Management of resources management strategy. The Zambezi Water the Lake Tanganyika (Box 4.4). In contrast, the Information System has been established and the Zambezi River Basin accounts for 72 percent of IWRM Strategy and Implementation Plan for the Zambian territory, involves eight riparian states18 Zambezi Basin was finalized in 2008. An updated and includes key areas such as the Kafue River version of the draft ZAMCOM Agreement was catchment, which are central to Zambia’s continued signed by seven of the eight riparian states in 2006, economic development. although Zambia has not signed and is awaiting Improved cooperative management of water conclusion of the policy reform process and institu- resources within the Zambezi River Basin catchment tional alignments. Four riparian states have ratified could greatly increase the yield of food, power and the ZAMCOM agreement and an interim secretariat economic opportunities, while also securing envi- is being established in Botswana. ronmental sustainability and mitigating the effects In the absence of an agreed mechanism for coop- of droughts and floods. While cooperative develop- erative management and development of resources ment in the basin is essentially concentrated to the within the Zambezi Basin many riparian states are Kariba Dam (1958) and its hydropower stations (Box pursuing unilateral development options. Without 4.5), the Zambezi River Action Plan (ZACPLAN) the commitment of all riparian states to a joint was initiated in 1987 by SADC to promote joint process of development and the sharing of benefits management of the water resources of the Zambezi may create tensions between the countries. This River on both a technical and political level. The could potentially block development opportunities original subproject was designed to support the within the basin, prevent regional opportunities for preparation of a Zambezi Watercourse Commis- substantial gains and result in reduced growth and sion (ZAMCOM). A draft ZAMCOM agreement reduction of poverty. In order to advance coopera- was subsequently produced and the first detailed negotiations among the riparian states took place in 17 Angola (6.72%), Central African Republic (10.86%), Democratic 1998. The negotiations were terminated later in the Republic of Congo (62.39%), Republic of the Congo (7.87%), same year when Zambia withdrew out of reluctance Tanzania (4.51%), Zambia (4.77%). 18 Angola (18.38%), Botswana (1.37%), Malawi (7.97%), Mozam- to enter into any agreements specifying water en- bique (11.81%), Namibia (1.24%), Tanzania (1.97%), Zambia titlements. Zambia’s ongoing policy and legislative (41.64%), Zimbabwe (15.55%).

42 Capitalizing on Opportunities and Overcoming Constraints: Priority Responses tive mechanisms supporting the development and basis. Such measures would facilitate informa- management of the water resources of the Zambezi tion and data sharing among the riparians and River Basin there are several initiatives that could create an environment conducive to cooperation. be pursued, including: • Strengthen institutional arrangements in order to consolidate Zambia’s regional leadership • Concluding the reform process to allow for with respect to international waters and regional the necessary legal framework and supporting integration and assume a key leadership role in institutional arrangements to allow the formal- integration, cooperation and collaboration on ization of international legal agreements. water resources developments. • Supporting a political dialogue to raise aware- • Increase awareness and acceptance of the need ness of the benefits of cooperation among deci- for cooperative mechanisms for management sion makers and civil society, which is hampered of the Zambezi River through analytical work by the absence of a substantive discourse on the highlighting the benefits gained through joint costs and benefits of cooperation and colonial or cooperative developments. legacies. • Enhance capacity for water resources manage- Developing the Knowledge Base ment, the development of human and institu- in the Water Sector tional capital, as well as standardize monitoring systems at the national level to strengthen dia- A lack of reliable data on water resources increas- logue among the riparian countries on an equal es uncertainty within the planning process. It also

IBRD 37348 NOVEMBER 2009 Box 4.4: Towards the integrated management of Lake Tanganyika

Lake Tanganyika is the world’s second deepest and largest freshwa- UGANDA ter lake and shared by Burundi, Congo DR, Tanzania and Zambia. Lake Cooperative management was initiated to conserve and preserve the RWANDA Victoria threatened unique aquatic and other biological diversity through the L. Kivu Kigali

control of pollution, sedimentation, overfishing and other human Bukavu

activities that adversely impact on the lake and its surroundings. Rusizi The Convention for Sustainable Management of Lake Tanganyika, DEMOCRATIC BURUNDI Uvira Bumumbura signed in 2003 and ratified in 2007, is a legal agreement identify- REPUBLIC OF CONGO ing the rights and duties of the riparians. It establishes institutions Malagarasi Luama TANZANIA for cooperative management and development of a regulatory Kasulu Kigoma framework to ensure sustainable utilization of the Basin. The Lake Gombe Tabora Urambo Tanganyika Management Authority has been established with Malagarasi Waki natural resource ministries represented at the Conference of Ministers. Lake Ugala Lukuga Kalemie Zambia is represented by the Ministry of Tourism, Environment and Tanganyika Mpanda Natural Resources. The Conference is responsible for evaluation and Shama implementation of the Convention; consideration and adoption of DRAINAGE BASIN protocols and annexes and amendments to the Convention; and es- MAIN CITIES AND TOWNS Rungwa NATIONAL CAPITALS Lake tablishment of subsidiary bodies of the Authority to support effective INTERNATIONAL BOUNDARIES Rukwa implementation of the Convention and meets at least once every year. Sumbawanga Implementation is driven by the management committee, supported Lake by various technical committees, and an Executive Secretariat that has Mweru Lufubu Mpulungu Lake been established in Bujumbura. At the national level, Inter-ministerial Malawi Committees guide and supervise implementation activities while 0 50 100 150 200 Kilometers MALAWI local governments and committees, civil society and the private sector ZAMBIA 0 50 100 150 Miles participate in decision-making through consultative forums.

43 Zambia: Managing Water for Sustainable Growth and Poverty Reduction

Box 4.5: The Zambezi River Authority

The Zambezi River Authority (ZRA) was established under an Act of transmission was handed over to the two utilities, ZESCO and the parliament in Zambia and Zimbabwe in 1987 as an interstate institu- Zimbabwe Electricity Supply Authority (ZESA). Under the agreement, tion to manage the “Zambezi scheme” on that part of the Zambezi ZRA has a water purchase agreement with the utilities. Operating in- River common to the two States. The Zambezi Scheme is defined in come is based on water tariffs charged based on the water consumed the Agreement as “the Kariba complex and any additional dams, res- in the generation of electricity as invoiced to the two utilities. The ervoirs and installations that may be constructed or installed on the formulae is intended to provide ZRA with sufficient revenues to carry Zambezi River”. ZRA is responsible for the operation and maintenance out its mandate, not to generate profit, and generates around US$10 of Kariba, including collection of hydrological and environmental million in water sales revenues annually. The tariff is reviewed every data for the Zambezi River, while responsibility for generation and three years.

increases the risk of sub-optimal and ineffective gathering of hydro-meteorological, hydrographic, decision making on water investments and opens groundwater and water use data (including both the process to discretionary decision making quantity and quality) is required. Mechanisms processes. Systematic measurement and analysis need to be implemented to ensure the data is of of water resources has been in decline over the adequate quality, stored safely in perpetuity and is past two decades in Zambia. The surface water readily accessible. This requires standard formats gauging and assessment program has limited for summarizing, presenting and interpreting data. coverage, despite the fact that reliable planning Provisions should also be made for the regular as- and design processes need long-term data on sessment of water resources across spatial scales, inter- and intra-annual variation in rainfall and including yields of rivers and groundwater bod- surface flows. ies, flood and drought risks and water quality Recent systematic mapping of groundwater re- characteristics. sources in the southern part of the country provides Ensuring sustainability of upgraded water an invaluable resource. However, it has highlighted resources measurement and assessment programs the lack of regular groundwater assessments, data will require self-funding mechanisms that can cover collection and information management. Further, operation and maintenance costs. These funding water quality monitoring is crucial for both safe- mechanisms would also have to allow for further guarding water supplies for human use and for expansion of existing networks and technology environmental sustainability. Under the WRAP, co- upgrades. Complementary to the existing commit- operating partners have supported certain upgrad- ments from cooperating partners, funding for map- ing in the assessment of surface water, groundwater ping and assessment programs should be provided and water quality. The proposed new legislative to allow acceleration of the existing groundwater framework will provide necessary backing for mapping program. groundwater assessment and management, and the The issue of quality and contamination of water necessary institutional arrangements that allow for for domestic supply in the Copperbelt, highlights the provision of some recurrent funding for water the urgency for an extensive and reliable program resources assessment. of monitoring and testing of water quality. Such To support the sustainable application of water programs should involve continuous, detailed and resources toward the goals of economic growth and comprehensive assessments of the contamination development, there needs to be a comprehensive problems. Currently, very little of the necessary information management system that is capable of testing can be achieved quickly, economically and incorporating data and processing information in reliably in Zambia. It is difficult for the existing support of the decision making process. Systematic laboratories to obtain regular supplies of high quality

44 Capitalizing on Opportunities and Overcoming Constraints: Priority Responses re-agents, and there is no system of quality control of laboratory and scientific services will need to be their results. Buildings and equipment tend to be in- developed through a consultative planning process, adequately maintained, partly due to lack of finances. and consider drawing on the advice and guidance It is therefore recommended that the Govern- of external experts as necessary. The services would ment builds on existing capacities and establishes not only have to meet the national requirements, a program of excellence in water related scientific but also of consider transboundary needs (such and laboratory services. To develop this program, as monitoring and investigations related to the a scientific advisory committee would need to be Zambezi River and any SADC reference laboratory established, including top representatives from services). This approach of a regional excellence the MEWD and other necessary Ministries, Zam- program could serve as a basis for seeking financial bian scientists, and user organizations. Required support for its implementation.

The Bank and Zambia’s 5 Water Resources Sector: Priority Interventions

Past Bank Involvement and Lessons Learnt

The World Bank Group’s support to Zambia dates back to the 1950s, with the first loan approved in 1953 for the development of the rail- ways in the then Northern Rhodesia. Since then, the WBG has supported over 220 projects with a total value of around US$4.6 billion. The majority of these projects (39 percent) and financial resources (US$2.4 billion) have been in the area of public sector economic and financial management (Figure 5.1). Support to water related development has focused largely on hydropower and water supply projects. Over US$700 million has been committed since the first engagement in the early 1950s, when the United Kingdom and the then Federation of Rhodesia and Nyasaland (now Zambia, Zimbabwe and Malawi) applied to the IBRD for a loan to help finance the Kariba Hydroelectric Project.

Figure 5.1: World Bank IDA and IBRD portfolio for Zambia (US$)

Agriculture

Health, Social & Education

Economic & Public Sector Transport

Environment

Energy Water & Supply

47 Zambia: Managing Water for Sustainable Growth and Poverty Reduction

The loan was approved in 1956 and the WBG has Bank concluded that Zambia’s risk of external since been involved in nine hydropower projects, debt distress is low and that total public debt is involving US$550 million of support to all of the sustainable under all scenarios analyzed. Domestic major hydropower developments (including the debt developments have also been favorable as Kariba, Kafue and Itezhi Tezhi dams). This ac- Government has reduced its domestic borrowing counts for over 90 percent of the financial resources requirements. This has led to a declining domestic committed to the energy sector and 13 percent of debt ratio. The total domestic debt to GDP ratio, the total portfolio. including domestic payment arrears, is projected While the last major investment in hydropower to equal 16.8 percent at the end of 2007 (down from generation was the completion of the Kafue Gorge over 27 percent at the end of 2003). This decline Upper Power Station, the WBG supported the has had a significant impact on domestic interest Power Rehabilitation Project and, through the IFC, payments, which declined from a high 2.9 percent has supported the proposed Kafue Gorge Lower of GDP in 2004 to an estimated 1.4 percent of GDP Power Station Project downstream of the existing for 2007. plant. The Power Rehabilitation Project supported The current portfolio includes ten projects total- efforts to upgrade the installed capacity of existing ing US$330 million, with a significant focus on water plants and included provisions to address issues resources development. This includes continued associated with the Gwembe Tonga who were re- support to the water supply sector through the Wa- located as a result of Kariba. ter Sector Improvement Project, as well as support to Since the 1980s water supply has become an the development of small hydropower plants under increasing priority with the first of four water the Increased Access to Electricity Services Project. supply projects being approved in 1983 and over The Irrigation Development Project currently under US$110 million committed over the past two de- preparation has identified six potential sites for the cades. Agriculture has been supported consistently development of water resources infrastructure that since the 1960s with 33 projects, one of which was would support the development of inclusive irriga- specifically dedicated to fisheries development tion schemes and the piloting of PPP arrangements. (US$7.1 million). There were also two specific The IFC is also providing transaction advisory drought recovery programs in 1989 and 2002 total- services to the Government in support of the Kafue ing US$58 million. Gorge Lower Power Station. Specific support to water resources in Zambia was provided through the Water Resources Action Program (WRAP) in 2002. This was intended to be Principles for Bank consolidated through the inclusion of a substantial Involvement water resources component in the credit for support to the Water Sector Performance Improvement Given the predominantly rural nature of poverty Project (2007). However, the project was stream- in Zambia, the WBGs assistance is targeted toward lined to include only water supply and the water supporting the Government in its efforts to address resources component was removed. This led to the the challenge of accelerating economic growth and Bank effectively not having any interaction with the improving rural competitiveness such that the ma- Government related to the water resources sector jority of Zambia’s population can benefit from this for the past several years. growth. The Government’s strategy to significantly In April 2005, Zambia benefited from the reduce poverty and reach middle income status by enhanced HIPC and MDRI initiatives with the 2030 is articulated in its Vision 2030, with the Fifth cancellation of US$2.7 billion in debt. As a result National Development Plan (FNDP) outlining an of this initiative, external public debt at the end agenda of actions for 2006 to 2010. The WBG’s of 2006 has declined to less than nine percent of Country Assistance Strategy (CAS) for Zambia GDP. The most recent Low Income Debt Sustain- during fiscal 2008 to 2011 outlines a program of ability analysis undertaken by the IMF and World support designed to help the Government achieve

48 The Bank and Zambia’s Water Resources Sector: Priority Interventions its objectives of accelerating and sharing growth objectives or support the creation of such an through highly selective and targeted interventions environment; that maximize the impact of Government’s own • local capacity to successfully implement the resources and programs. Thus, the CAS stresses the proposed intervention or support creation of need for selectivity, prioritization, and an enhanced such capacity; and focus on results, monitoring and evaluation. • a suitable governance environment for the Following the Multilateral Debt Relief Initiative, intervention. the scale of the Bank’s resource transfers to Zambia will be much lower than in previous periods. The The process of identifying specific interven- country allocation for Zambia’s lending program tions for Bank financing builds on the analytical under IDA15 is US$86 million per year, with 15–20 work outlined in the preceding chapters and draws percent of these resources going towards direct on the programs and interventions identified and budget support. Actual allocations during the CAS articulated in the FNDP and the IWRM&WE IP. period will be determined on an annual basis and Based on the broad areas identified in the preceding will depend on: (i) Zambia’s performance rating; (ii) chapter, a subset of principles have been applied to the terms of IDA’s assistance to Zambia (credit or prioritize activities for a Bank supported program in grants); (iii) the performance and assistance terms water resources. Interventions are based on poverty of other IDA borrowers; (iv) total IDA resources alleviation measures as outlined in the World Bank’s available in IDA15 and IDA16; and (v) the number 2003 Water Resources Sector Strategy, providing a of IDA-eligible countries. framework for analyzing expected impacts (Figure In implementing the WBG strategy, a set of 5.2). Type 1 interventions are broad based water selectivity filters are being employed with each in- resources interventions (including major water tervention supported by the WBG having to satisfy infrastructure) that provide national and regional the following criteria: economic benefits to the whole population, including the poor. Type 2 interventions aim at improving • alignment with the goals outlined in the FNDP; water resources management in ways that directly • harmony with the principles and the division benefit the poor. Research by the World Bank has of labor established by the cooperating partners shown that the average incomes of the poorest fifth under the JASZ framework; of society rise proportionally with overall incomes19, • contribution to the CAS objective of accelerating inferring that the poor generally would benefit from and sharing growth; broad based growth inducing investments in water • sufficient Government ownership and commitment for the intervention; 19 Dollar D and A. Kraay, 2001 “Growth is Good for the Poor” • an enabling policy environment that will al- World Bank Policy Research Working Paper 2587, Washington low the intervention to meet its development DC

Figure 5.2: Impact of interventions on poverty

Interventions Broad Poverty targeted Affecting water Resource development & Type 1: Type 2: management Broad region wide water resource interventions Targeted water resource interventions

Service delivery Type 3: Type 4: Broad impacts through water service delivery reforms Targeted improved water services Source: World Bank Water Resources Sector Strategy 2003.

49 Zambia: Managing Water for Sustainable Growth and Poverty Reduction resources management and infrastructure. To sup- country’s water resources if economic growth and port rapid growth that is also pro-poor, a careful poverty alleviation is to be achieved without con- balance must be maintained between economic straints due to the underdevelopment of water re- growth and poverty reduction criteria in making sources, particularly storage. However, the resourc- investment choices. An appropriate investment es available from the World Bank are insufficient to strategy for the water sector is a blend of all four meet more than a fraction of the needs. The Bank types of interventions. is therefore resolute that its resources are targeted The first point of intervention in supporting optimally so as to leverage further resources. In do- Government programs is to ensure the efficient ing so, the Bank is a strong advocate of collaboration application and use of existing budget resources. amongst cooperating partners of which there are a Ineffective and unrealistic budget preparation has number working in the water sector. implications for budget execution, procurement and Given the strategic importance of water re- ultimately for service delivery. The Government sources in providing the foundations for addressing does not yet have an explicit policy of investing in poverty alleviation and improved food security water resources development. Analysis of budget together with the lack of investment over the past allocations and expenditures in support of water decades, the WBG has a strong interest in increasing resources highlights the need to strengthen internal support to the water sector in Zambia. The WBG’s mechanisms and capacity to better utilise existing CAS for Zambia outlines an indicative lending resources. program which includes provisions for support to Strong national and sectoral leadership will be a Water Resources Development Project in FY10 required to conclude the reform process and capi- (July 01, 2009–June 30, 2010) and the CWRAS is in- talize on productive and sustainable development tended to support this by assisting the Government of the country’s rich natural endowments of arable in choosing water sector activities for the Bank’s land and water. This process is guided by the FNDP, engagement in the next three to five years. While various sector strategies such as the IWRM&WE IP ensuring consistency with the Bank’s CAS, the and the 1995 Master Plan, and the cooperative prin- CWRAS is also intended to provide a mechanism ciples for development partners outlined in the Joint to facilitate alignment with ongoing and planned Assistance Strategy for Zambia (JASZ). programs in the water sector supported by other cooperating partners. In the absence of any national investment Proposed Areas of framework for water resources, a number of broad Interventions areas for priority water resources investments are identified below, with some specific interventions The WBG has been involved in numerous water to be carried forward through investment lend- consumptive and dependent sectors but has not had ing. Given the substantial availability of water a cohesive, integrated framework for supporting resources and relatively low level of their produc- water resources development and management in tive utilization, water infrastructure investments Zambia. The objective of the CWRAS for Zambia are expected to have high returns and efficiently therefore is to provide guidance to the WBG in sup- contribute towards the national development ob- porting potential investments in the water sector jectives. However, despite the abundance of water and in those sectors which depend upon water in resources nationally, rivers such as the Lunsemfwa, Zambia. In doing so, it is intended to support the Chalimbana and Kafue are already facing compet- Government in developing a sound investment ing demands and experiencing economic short- strategy for the development and management of ages. Management measures aimed at improving water resources. the water allocation framework and information It is clear from the analysis provided in this management need to be implemented in parallel document that significant investment is required in with infrastructure investments to maximize and Zambia in the development and protection of the sustain economic returns.

50 The Bank and Zambia’s Water Resources Sector: Priority Interventions

Achieving successful development of Zambia’s A. Multi-purpose Small Scale Water water resources for productive purposes will require Resources Development adoption of interventions within a sound policy framework that is supported by a solid legal and This component would: regulatory framework. The proposed legal and institutional reforms include significant changes in i. Undertake a “rapid assessment” of the factors de- the framework for management and development termining the success or failure of small scale water of water resources. A coordinated, Government led development in Zambia. There is evidence that a program that draws on the relative strengths of the number of small dams have failed to contrib- various institutions and cooperating partners in the ute to poverty reduction goals. It needs to be water sector will be required. The prioritized areas determined if this was due to social reasons of investment identified through the CWRAS for the (questions of ownership, governance, acces- period 2009 to 2012 indicated below are intended to sibility, capacity and training etc.), technical guide discussion on a program of World Bank sup- reasons (poor design, location, soil erosion and port. These will need to be integrated within existing sedimentation, inadequate maintenance, etc.) Government efforts to develop a program that uses or financial reasons (high capital and/or recur- specific investments to accompany the process of rent costs, cost of related works such as piping, institutional development. Specific interventions in irrigation equipment etc., cost of agricultural the following areas have been identified for further inputs, access to markets, etc.). The rapid assess- elaboration: ment would be undertaken during the project preparation to provide guidance how to ensure A. Multi-purpose, small scale water resources that the proposed investments provide substan- development; tial poverty reduction benefits. B. Protection and development of water supplies; C. Itezhi Tezhi Dam safety and investigations into ii. Provide resources to support scaling up existing increasing its capacity; small scale water resources programs. Based on the D. Water resources planning and development; existing program within the MEWD, this would E. Water resources assessment; and focus on water management infrastructure and F. Strengthening Zambia’s capacity in transbound- practices that increase the fresh water resources ary water resources management. available to rural households and communities for growth and climate resilience. This would In designing a short-term strategy for the include identification, design and construction engagement of the World Bank through an initial of small dams (below 15 meters height and less project with four year duration, the following than 3 million m3 capacity) for power produc- logic has been used: employ the relatively mod- tion, agriculture, fish farming and water supply est resources available through IDA to the best to human settlements, and where possible com- advantage of Zambia. Therefore there should be binations of these uses, including scaling up the a mixture of activities which includes substantial MEWD’s small dam program and the mini and real development of assets (the proposed compo- small hydropower construction and rehabilita- nent on small scale water resources development; tion program. The exact number of dams to be protection and development of water supplies), supported will depend on available funding, capacity building, policy support (water resources dam size and site conditions. For the increased planning and development, strengthening the efficiency in achieving climate resilience and transboundary water resources management), food security, this needs be accompanied by knowledge building (water resources assessment support to rainwater harvesting, improvements and scientific services) and the preparation of in soil moisture conservation, groundwater future investments (the Itezhi Tezhi Dam inves- recharge work, catchment protection and other tigations). “green water” management activities.

51 Zambia: Managing Water for Sustainable Growth and Poverty Reduction iii. The process of identification, design and con- some of the above elements are already in place struction would be supported by the develop- (e.g. well field identified and partly constructed ment of a series of process orientated manuals. The for additional supply for Ndola). manuals will include: (i) technical aspects of Stage 2 would support implementation dam design and construction; (ii) institutional of priority groundwater supply systems, net- arrangements; (iii) community mobilization; and work extensions, and the protection regime (iv) economic analyses of costs and benefits. This for well fields and recharge areas. If Kafula- analytical work will assist the Government in futa development is indicated as preferred for ensuring a transparent and economically efficient Ndola and Luanshya, this would proceed to process of identification and mobilization, which design stage. requires physical and financial participation from participating communities along with an assess- ii. Reduction of long-term contamination risks through ment of physical, economic, and social feasibil- revegetation. Stage 1 would build on the existing ity. Provisions for an iterative monitoring and Copperbelt Environment Project to identify evaluation framework would be developed, with mine waste areas where revegetation has been provision for action to help ensure sustainability. tried, and successes and failures assessed. Identify waste dumps, tailings dams and other B. Protecting and Developing Water Supplies devegetated and contaminated areas for potential revegetation. Delineate areas that may This component would be aimed at addressing is- be priority in terms of potential to contribute sues associated with the quality of protected water contaminated leaching water, runoff or eroded supply in the Copperbelt. Specifically it would sediment to the environment. Survey identified focus on: areas to assess vegetation cover if any, and the composition and structure of typical surface i. Protection of quality and adequate quantity of water and subsurface materials. Review revegetation supplies for Copperbelt Towns. Stage 1 would con- processes including identification of pioneer firm priorities for upgraded and protected water and subsequent colonization species. Prepare sources, with stakeholder involvement from the a revegetation plan, including monitoring of candidate towns including Chingola, Mufulira, vegetation cover, and a plan for the monitoring Kitwe/Kalulushi, Ndola and Luanshya. Under- of leaching of contaminants, runoff and ero- take groundwater exploration and testing to sion. With stakeholder involvement, develop determine groundwater source options for the incentive systems for community and mining selected town supplies, including identification company-support of survival of plantings on of both unconfined and confined aquifers. De- waste deposits. For suitable areas, prepare a fine a protection regime for the well fields and plan for protection of the evolving forest cover the recharge areas of the selected aquifers. For in perpetuity and seek carbon credit financing Ndola and Luanshya, development of a dam for implementation of these plans. on the Kafulafuta River should be included as a Stage 2 would implement revegetation resource option, through a prefeasibility study. programs and the protection and monitoring If this option is selected, then support would be plans. Monitor and evaluate progress. Estab- provided to proceed to a feasibility study and lish and enforce standards for revegetation to design the well fields, power supplies, treat- be carried out by operating mines on all their ment and storage facilities, along with linking waste areas. pipe and valve work and the design process, including construction and testing of pilot wells. C. Itezhi Tezhi Dam Safety and Capacity Determine and design any extensions of town water supply and sewerage reticulation systems This component could include any combination of adjacent to delivery mains. For some towns the following options:

52 The Bank and Zambia’s Water Resources Sector: Priority Interventions i. Stage 1: Foundation and stability investigations and Current initiatives to install hydropower safety measures for the Itezhi Tezhi Dam generation capacity within the existing structures at the Itezhi Tezhi Dam could be used as • Determination of the adequacy of the mud- an entry point to support the above actions or stone foundations of the dam to support they could be supported as standalone activities. raising of the full supply level to two, four However, financing of construction associated and nine meters above the new full supply with increasing the height of the dam would level of EL 1030.50, employing measures first require the appropriate studies and likely as recommended in the “Harza Report”20, fall outside the period of assistance considered including drilling core holes, logging recov- under this CWRAS. ered core to determine areas of continuous weak mudstone, testing core samples, and D. Water Resources Planning and undertaking a complete analysis of the pore Development pressure system. • Restoration and upgrade of the existing This component would include the following ac- drainage, piezometer and relief well systems tivities: to full operational status, including replace- ment of corroded pipe work, reinstatement i. Water balance and developmental studies for the of the compressed air system for the relief Kafue River Basin. wells, installation of small V-notch weirs for measurement of discharges from the relief • Hydrological and economic modeling of the wells and provision of current meters. As- river system and demand scenarios to pro- sess and restore or replace other essential vide information for the Water Board (and instrumentation and equipment that are cur- any successor under the draft legislation) rently non-functional including inclinom- to determine the capacity of the system to eters and seismic monitoring instruments. support further increases in water alloca- • Undertaking stability analyses, prefeasibil- tions for any or all of the major uses, and ity designs and estimates of costs of em- the stages at which caps on further water bankment stability measures required for allocations should be applied. the three increased operating level options. • Using the outputs of the groundwater exploration and development studies, evalu- ii. Stage 2: Feasibility studies of options for raising the ate options for agricultural development Itezhi Tezhi Dam. Based on the conclusions of upstream of the Kafue National Park using the investigations under (i) above, undertake a groundwater, including evaluation of the feasibility study of raising the level of the Itezhi impacts of scenarios for development of Tezhi Dam, utilizing the outputs of the founda- groundwater resources that may be con- tion and stability investigations and the outputs nected to downstream wetlands or surface of the water balance and developmental studies rivers or both. of the Kafue River Basin (Section D below), with • Modeling of options for increasing the ca- a recommended optimum level of dam raising. pacity of the Itezhi Tezhi reservoir, including The study would recommend an optimum scenarios for increased water use for agri- level of dam raising and also strengthening or culture, hydropower, urban water supply replacing of dam components such as spillway and environmental releases, and including gates and outlet tunnels and gates; assess effects on the proposed power station, and effects on and compensation requirements for users of 20 Zambia Electricity Supply Corporation Limited “Feasibility the land to be inundated in case of the project Study of the Itezhi Tezhi Hydroelectric Project” Harza Engi- neering Company International LP and Rankin Engineering implementation. Consultants, April 1999, pp 3–14 to 3–15.

53 Zambia: Managing Water for Sustainable Growth and Poverty Reduction

evaluation of economic and environmental recharge, outflows and their destinations, and benefits of the scenarios. This would include safe yield. a more detailed consideration of dam raising costs assessed above. iii. Laboratory and scientific services via support to the upgrading of a Zambian water laboratory ii. Integrated river basin planning and development. At as the main water laboratory of Zambia, with Stage 1 it is recommended to undertake a mini full capacity and quality assurance, provid- master planning exercise to determine the next ing analytical services and scientific research stage of medium to large scale water resources and advice. Establish a national water qual- development in Zambia, based on criteria such ity monitoring program and associated data as maximum national economic benefit, nation- management system using the laboratory’s al development policies, and protection of key services. environmental values. In the light of national priorities to ensure a balance between securing F. Transboundary Water Resources key economic activities in the relatively devel- Management oped central corridor, and development of the economic and infrastructure base outside this i. Strengthening national capacity in transboundary corridor, the master planning exercise should water resources management by providing for provide water resources development plans human resource development and training, for (i) the Kafue River Basin and (ii) one other including training in negotiations, and human major basin. Use is to be made of (i) the outputs resources development in basin-level legal, of studies identified above; (ii) the 1995 National economic, hydrological, and environmental Water Resources Master Plan; and (iii) options skills. This would also include support to the for possible hydropower development assessed establishment of a strong institutional unit de- by the MEWD. voted to international waters and hydrological Stage 2 would support feasibility studies on and hydro-meteorological measurement and the highest ranked option for each basin. information management and data sharing, including real time data on floods and droughts E. Water Resources Assessment and (additional to the support provided in E above). Scientific Services ii. Strengthening Zambia’s analytical position and the i. Ensuring sustainability of water resources mea- participation by Zambians in basin-level plan- surement and assessment through support to ning and analysis, and complementary studies the study and implementation of institutional undertaken by Zambia. This component may arrangements and self funding of the surface be accompanied by support for basin-wide and groundwater measurement and assessment multilateral initiatives, including facilitation of programs (implementation to follow enactment political engagement by the riparian countries of the proposed new Water Act). at the highest level, such support being complementary to the ongoing support by Sida, Danida ii. Groundwater mapping and assessment through and NORAD for the ZACPRO process. support to accelerated mapping of groundwater to ensure countrywide coverage by 2013 iii. Facilitating dialogue amongst the riparians. The (complementary to the continuing German Bank could support the Government through funded mapping program). Specifically under- technical assistance to promote regional de- take hydrogeological assessments of the aquifer velopment initiatives and project preparation systems of the Mpongwe and Mumbwa areas, in the framework of the development strat- determining aquifer configurations and charac- egy currently being prepared by the riparian teristics, including transmissivity, water quality, countries.

54 The Bank and Zambia’s Water Resources Sector: Priority Interventions

In Zambia this could include: Zambia’s water sector continues to benefit from substantial financial support from cooperating part- • Support of the development of hydropower ners and the number of CPs providing assistance projects with special emphasis on ensuring in water resources management has increased. The that operational rules and environmental most active CPs in the sector are Germany (through action plans are such as to minimize adverse GTZ, KfW, and DED), Denmark through national downstream effects. and regional Danida programs, the European Com- • Support for agricultural projects, incorpo- mission, Japan, various agencies of the United Na- rating irrigation development in a manner tions and Sida through their regional programs. The that takes advantage of opportunities to African Development Bank could potentially be an ensure that downstream flows are not exces- important partner in supporting the water resources sively reduced. activities in the country. Central to the successful realization of devel- The Zambezi Basin Multi-Sector Investment opment within the water sector is the efficient Opportunity Analysis, launched in April 2008 as and effective deployment of resources allocated part of the World Bank’s ongoing engagement in in support of water resources investments. Mobi- water resources development in southern Africa, lizing these resources in support of sector activi- is aimed at assisting the Bank to determine a strat- ties relies on appropriate planning that is able to egy for regional engagement in the political and prioritize a series of optimized investments over technical environment of the basin. The analysis time that maximizes benefits at the community is based on a multi-sectoral economic analysis of level with the highest economic and social returns. growth focused development options and invest- While financial support to the sector has increased ment potentials from both a basin and country over the years, the capacity of Zambia’s water perspective for the eight riparian countries. The resources management and development institu- approach contributes to the Bank’s regional inte- tions to implement projects and programs remains gration strategy and takes account of the national limited. Analysis of public expenditures on dam CAS framework in each country. It is anticipated programs reveals that expenditures in support of that the analysis will inform a World Bank strategy dam investments have improved in recent years, to support development of the Zambezi River to from less than 50 percent of resources being spent optimize benefits for all the riparian countries. in 2002 to over 80 percent in 2006 (Figure 5.3). This Operationalizing such support will require high varies among the various Ministries and Depart- level political engagement, an invitation on the part ments, with the MEWD demonstrating continued of the riparian states and a corporate commitment improvement over the years toward successfully from the Bank. realizing almost complete budget expenditure. The failure of other Ministries, Departments and Government agencies to adequately mobilize Success Factors and Risks resources suggests the need for a more cohesive mechanism for cross-sectoral integration and col- Financing of the priority interventions identified laboration. above will require the involvement and coopera- The factors affecting implementation capac- tion of a number of partners which may lend itself ity within these various departments vary, but for to a programmatic, sector wide approach for water successful project implementation there is a need resources management in the country. The details to address: (i) capacity of the implementing insti- of any program of support will be determined tutions to meet the requirements of the projects through an intensive identification process that will in terms of a strong presence in the localities of build on the CWRAS to confirm the needs of the the project, empowered to act in response to local Government, potential partnerships and a process needs and conditions; (ii) capacities to assemble of moving forward. and support project implementation teams with

55 Zambia: Managing Water for Sustainable Growth and Poverty Reduction

Figure 5.3: Total allocation for dams

$2,500,000

$2,000,000

$1,500,000

$1,000,000

$500,000

$0 2002 2003 2004 2005 2006

Unspent Expenditure

Source: Financial Reports 2002–2006.

the range of expertise needed (project management, in Zambia over the coming period. Currently, the procurement, engineering supervision etc.); and WRAP provides support under EU financing for (iii) technical and financial capacity to support the establishment of Catchment Councils and Water sustainable operation and maintenance of the infra- User Associations, and the strengthening of human structure upon project completion. Strengthening of resource capacity of the sector. A second phase of the the Government capacity in these areas is necessary program is contingent on the draft water resources to ensure that the resources available to the sector Bill having been passed and would further expand on are effectively utilized and that the country can the results under WRAP Phase 1. The IWRM program benefit from the development support to the sector. under the Department of Planning and Information Conclusion of the reform process and updating supported by Danida is also aimed at developing of the legal framework is another important fac- capacity through piloting decentralized management tor affecting the success of future water resource structures in trial areas, investments in small scale programs in Zambia. The existing legislation water resources infrastructure and building capac- has a number of acknowledged limitations in ity through an IWRM program at the University of its provisions to deal with international waters, Zambia. Continuous support to this process will be groundwater and integrated water resources important to ensure that the new policy and legisla- management. Adoption of a new legal framework tion find their way to implementation. would provide an improved regulatory platform Key to these institutional changes and water for supporting the development and manage- resources management measures will be an effec- ment of water resources in Zambia and introduce tive infrastructure platform to provide the basis for significant institutional changes. The absence of economic growth, food security and poverty allevia- a clearly articulated roadmap for concluding the tion. Providing tangible benefits to local communi- reform process creates uncertainty within exist- ties will be an essential ingredient to facilitating the ing institutions and partners that will need to be process of institutional change and decentralized resolved if the sector is to succeed. management responsibilities and so a program for Partnerships will also be a key factor govern- supporting investments in infrastructure should ing the successful development of water resources be aligned to the process of institutional changes.

56 ANNEX A. FNDP Water and Sanitation Program

The water and sanitation goal under the FNDP is to “promote sustainable water resources development and sanitation with a view to facilitating an equitable provision of adequate quantity and quality for all users at acceptable costs and ensuring security of supply under varying conditions”. 1. Water resources development and infrastructure development: To assess, develop and allocate water resources in the four priority pillars of economic development of agriculture, tourism, environment, mining, manufacturing and energy a. Assess water resources in detail in the four pillars of national development, including studies on protection of public health and environment; b. Construct 30 assessment and monitor boreholes in areas where the Government has directed its economic development; c. Construct 4 small dams per year for economic production; d. Rehabilitate and expand dams; e. Water use, irrigation and land use evaluation surveys in peri-urban areas, dambos and settlement schemes in rural areas; and f. Provide drought emergency funds for development of water resources, such as boreholes for drought prone areas. 2. Institutional capacity building and enhancement: To promote legal and institutional framework capacity enhancement a. Legal and institutional framework capacity enhancement (e.g. setting up of the National Water Authority, IWRM unit at national level, catchment councils and water users association); b. Marine Meteorological stations; c. Human resource development (recruitment and education and training of personnel to align them into IWRM sphere); and d. Stakeholder participation and awareness raising. 3. Water resource management and information systems: To develop management information systems for planning, development, allocation and management of water resources at catchment, national and regional level and to provide safe water and improve coverage in Zambia a. Establish water resource information systems for planning, development and management; b. Develop catchment management plans; c. Assess water resources at catchment level; d. Rehabilitate dams at catchment level and mobilize communities; e. Assess groundwater based infrastructure at catchment level, such as boreholes; f. Produce weather and water ten day bulletins; g. Maintain both surface and ground water resource database and then publish yearbooks; h. Implement water resource guidelines and methodology project, including water allocation guidelines; i. Implement conversation, including comprehensive, conjunctive surface and ground water efficiency, ecological production, etc j. Implementation of monitoring network, wetland survey, and in-stream flow requirement studies at catchment level; k. Implement economic accounting; l. Provide gender and IWRM issues support catchment level; m. Provide conflict management and arbitrate water resources related conflicts and arbitration; and n. Conduct NGO and CBO funding assessment. 4. Water resources assessment program: To assess surface and groundwater resources country-wide in order to determine the quantity and quality of available water a. Surface water resources assessment: b. Rehabilitate and upgrade of 300 hydrometric stations, 6 marine meteorological stations and establishing 10 new stations per year (including data collection); c. Water assessment (including existing reservoirs);

57 Zambia: Managing Water for Sustainable Growth and Poverty Reduction

d. Design and implement National water quality Monitoring Network (including data collection); e. Forecast flood and drought (including training) in conjunction with the Meteorological Department; f. Study water quality for threatened areas such as Lusaka, Copperbelt, Luapula Eastern and Northern provinces; g. Groundwater resources assessment: h. Observe boreholes for groundwater resource development and assessment; i. Develop exploration boreholes; j. Monitor wells and boreholes (ground water level and quality monitoring; and k. Rehabilitate existing groundwater systems, such as monitoring boreholes. 5. International waters: To manage and develop shared water resources a. Establish an international waters unit; b. Build up capacity in the unit, e.g. negotiating skills; c. Facilitate the implementation of programs related to international waters for example, SADC, ZRA, ZamCOM programs; d. Oversee policy, legal and institutional framework governing international waters; and e. Conduct research and consultancy in international waters to address specific issues and other related activities including stakeholder consultation. 6. Research and development: To carry out research and development in selected areas in the country for improved planning, regulation and allocation of Zambia’s water resources a. Implement, monitor and harmonize legal study on Institutional enhancement Project and IWRM integration in the Office of the Vice President – Disaster Management Unit; b. Implement Policy and Planning Project to bring about harmonization of all key sector plans/policies (for example, MACO & MTENR) into one through national consultative forums; c. Conduct water resource mapping, lake and river levels, modeling and development of information systems including use of Remote Sensing and GIS in mapping of selected catchments and hot spots. Activities include feasibility studies and setting up measuring stations, mapping of impediments to water quantity, quality (e.g. erosion, pollution) where necessary; d. Establish environment and agro-forest watershed management pilots in selected areas; and e. Conduct research in development of simple technologies such as rain water harvesting, reclamation, recycling and re-use of waste water discharged; activities include environmental regulation review, water accounting, EIA review and assessment, NGO/CBO cooperative implementation, conflict resolution, pilot studies, small scale irrigation demonstrations and sustainable natural resource management and uses. 7. Mainstreaming cross-cutting issues (HIV/AIDS, gender & environment): To implement measures in the sector which enhance mainstreaming a. Develop capacity in advocacy management, coordination and monitoring of HIV/AIDS and Environment; b. Develop community and district level multi-sectoral structures for the implementation of cross-cutting issues; and c. Reduce the negative impact of policy related to cross cutting issues. 8. Monitoring and evaluation: To monitor and evaluate the proposed programs in order to achieve the desired impacts Carry out: a. Human Resource Development; b. Public Opinion Surveys; and c. Conduct monitoring and evaluation. 9. Urban water supply and sanitation: To provide adequate, safe and cost-effective water supply and sanitation services a. Development and provision of sustainable water and sanitation service to more people in urban and peri urban areas through: b. Commercialization, private sector participation and independent regulation; c. Support to the national UWSS development that focuses on enhancing institutional capacities, policy and legal frameworks, and information management for planning and development at national, provincial and district levels; d. Support to investment programs that aim at increasing access to safe, adequate water supply to 80 percent of the urban and peri urban population by 2010, and proper sanitation systems to 70 percent for the urban and peri urban population by 2010; and e. Involve service providers in the achievement of investment programs.

58 ANNEX A. FNDP Water and Sanitation Program

10. Rural water supply and sanitation: To provide adequate, safe and cost effective water supply and sanitation services with due regard to environmental issues Facilitation of universal access to safe, adequate and reliable water supply and sanitation services in rural areas through: a. institutional support activities to facilitate more effective planning, implementation and monitoring of RWSS, focusing on: i. developing a supportive legal framework; ii. institutional development, including development and implementation of appropriate capacity building at community, district, provincial and national levels; iii. Information Management Systems (IMS); iv. Advocacy and publicity; v. district planning; vi. sanitation and hygiene education; and vii. Operation and maintenance (O&M) systems. b. Capital investment programs consisting of projects for construction of new facilities and rehabilitation of facilities to secure or safeguard existing coverage, focusing on: i. integrated rural water supply and sanitation investment projects in all provinces, with priority given to extension of sanitation facilities, and related hygiene education awareness campaigns in the presently under-served Northern, Western, Luapula and Lusaka provinces; and ii. Programs for rehabilitation of existing facilities.

Key performance indicator Baseline value 2005 Target value 2010 Volume of treated water produced (m3) by commercial utilities tbd tbd Newly installed water points in: (a) peri-urban areas tbd tbd (b) rural areas tbd tbd (c) total tbd tbd Number of new appropriate sanitary facilities provided in: (a) peri-urban areas tbd tbd (b) rural areas tbd tbd Population with adequate sanitary facilities (as % of total population) in: (a) peri-urban areas 10% (2000) 35% (b) rural areas 4% (2000) tbd (c) total tbd tbd Population with access to safe water (as % of total population) in: (a) peri-urban areas tbd (b) rural areas 44% (2000) 60% (c) total 37% (2000) tbd

ANNEX B. Options for Water Resources Development in the Kafue Basin

The objective of the analysis was to evaluate the The effects of irrigation development options physical and economic impacts of several options were assessed in a study for the Ministry of Energy for development of the water resources of the Ka- and Water Development, OPPPI, and ZESCO Lim- fue River Basin downstream of the Copperbelt. The ited: “Phase 2, the Strategic Environmental Impact options are: Assessment” September 2003, by Scott Wilson Piesold (SWP). This study modeled a base case • Increases in irrigated agriculture in the middle and nine scenarios of patterns and levels of irriga- basin, between the Copperbelt and Itezhi Tezhi tion development in the middle sub-basin and the (mostly wheat) and in the Kafue Flats (mostly Kafue Flats. sugar cane). Increases of 10,000 hectares were The effects of raising the full supply level of chosen for analysis in each sub-basin, being the Itezhi Tezhi reservoir were modeled in a study somewhat larger than known desires of farming undertaken for the Zambia Electricity Supply Cor- enterprises for expansion; poration Limited: “Feasibility Study of the Itezhi • Raising the full supply level of the Itezhi Tezhi Tezhi Hydroelectric Project” Harza Engineering reservoir by 3, 5, and 10 meters (above 1029.5 Company International LP and Rankin Engineering masl, the full supply level prior to its recent Consultants, April 1999. This study modeled options raising by 1.0 m). for raising the dam by 3, 5 and 10 meters.

The analysis first determined the impacts of the development options on hydropower generation. Technical Evaluation Energy is currently generated at the Kafue Gorge of Options Upper Dam and Power Station. There are plans for the installation of a 120 MW power station at the The model results for the effects of irrigation were Itezhi Tezhi Dam. The effects on power production first adjusted to account for the following: were determined for each of the two separately. The effects on hydropower production would be: • For sugar cane, water application rates have been shown to be lower today than the figure • the reductions in hydropower generation due to of 1.8 m per year used by SWP. Post year 2002 the consumption by irrigation crops of water that plantings use improved water application would otherwise have been directed through the techniques, with water use efficiency of 85 power station turbines; and percent, compared with the rate of 65 percent • increases in hydropower generation due to in- applied by SWP to furrow irrigated plantings creases in storage volumes resulting from raising before 2002. the full supply level of the Itezhi Tezhi reservoir, • In the Kafue Flats, net water usage is also some- thus enabling greater regulation of flow from the what lower than assumed by SWP, because re- Itezhi Tezhi reservoir downstream to the Kafue turn flows from the irrigation areas back to the Gorge Upper reservoir. River have been shown to occur.

61 Zambia: Managing Water for Sustainable Growth and Poverty Reduction

A new base case as at the end of year 2008, The base case option was assumed as the pres- with irrigation, was prepared using irrigation crop ent level (2008) of irrigation in the Kafue and the figures above and below the Itezhi Tezhi Dam, as- present level of the Itezhi Tzehi Dam. Project ben- sembled in a survey by TF Stephens, March 2008. efits included in the analysis were: The increases or decreases in the hydropower that that would be produced as a result of the de- • net economic benefits from the irrigation ex- velopment options were then calculated. This was pansion of wheat and sugar production (10,000 done for the proposed Itezhi Tezhi Power Station, ha each) above and below ITT respectively and for both the Kafue Gorge Upper Power Sta- (calculated based on the irrigation expansion tion (with an installed capacity of 990 MW as at model) the completion of the present rehabilitation and • economic benefits (losses) in power production upgrading project), and the proposed Kafue Gorge by the potential the ITT and Upper Kafue Gorge Lower Power Station (600 MW). The method used stations assessed due to irrigation expansion was to interpolate between the model results pre- (four scenarios as described above) and the dam pared by SWP, adjusted as above. level upgrade (three options of the dam raising).

A discount rate of 12 percent was assumed in Preliminary Economic the analysis. The analysis used economic costs of the Analysis of the Irrigation ITT dam upgrade (capital and recurrent) evaluated based on the cost estimates in the HARZA report. Expansion options for Itezhi Tezhi Dam The results of the preliminary economic analysis could be summarized in Table 1 below. Conclu- As outlined in the Harza Report the option of raising sion of the analysis: the Itezhi Tezhi Dam by ten meters presents technical difficulties. The Harza cost estimate is high, and it 1. All irrigation expansion options under the could prove to be even more expensive. The options evaluation will require raising of the ITT dam, subject to preliminary economic assessment were thus except the expansion of 10,000 ha of wheat limited to raising the dam by 3 and 5 meters. production above ITT (Scenario 2) The preliminary economic analysis focused on 2. The proposed expansion of wheat production the assessment of the following four scenarios: above the ITT (Scenario 2) along with the hydropower production benefits provides the highest • Scenario 1: No irrigation expansion in the Kafue benefits for the country’s economy for each of Basin the dam raising options analyzed. Scenario • Scenario 2: Irrigation is increased by 10,000 ha 2 of the irrigation expansion in combination of wheat above the Itezhi Tezhi Dam with the raise of the dam by 5 m has the high- • Scenario 3: Irrigation expansion of 10,000 ha of est economic benefits compared with all other sugar below the Itezhi Tezhi Dam options/scenarios evaluated. • Scenario 4: “Full” irrigation expansion sce- 3. The economic efficiency of the wheat irrigation nario (irrigation expansion of scenarios 2 and expansion above the ITT may be explained by 3 together) the fact that 90 percent of the wheat is irrigated by groundwater. It is estimated that at least Each irrigation scenario was assessed for the half of the groundwater withdrawal would following options: not affect Kafue river flow. An important effect of the groundwater irrigation would be felt in • Option 1: no raising of the dam; the wetlands of the central basin (such as Lu- • Option 2: the dam is raised by 3 m; kanga swamp) rather than in Kafue river flow. • Option 3: the dam is raised by 5 m. However, around half of the groundwater use

62 ANNEX B. Options for Water Resources Development in the Kafue Basin

Table B1: Project economic NPV (USD million) Irrigation Expansion Scenarios Option 1: 0 m dam raise Option 2: 3 m dam raise Option 3: 5 m dam raise Scenario1: no expansion 0 198 231 Scenario 2: wheat expansion above ITT 54 353 464 Scenario 3: sugar expansion below ITT negative 100 212 Scenario 4: irrigation expansion above and below ITT negative 4 39

would affect the Kafue flow by reducing natural capital costs of the dam raise options. All conclu- groundwater flows into the river. sions on the viability of the dam raising options 4. The 10,000 ha expansion of sugar production remain the same with the decrease in the economic below the ITT will not be economically viable prices by 10 percent as well as the increases in the without raising the level of the dam (Scenarios construction costs by 10 to 20 percent under the 2 and 3) irrigation Scenarios 2 and 3. At the same time, the 5. The planned “full” irrigation expansion of the CBA results of the dam raising options under the 10,000 ha of wheat in the upstream of ITT and irrigation expansion Scenario 4 appeared to be more 10,000 ha of sugar below ITT should not proceed sensitive to the variations in these parameters. For without the raising the level of the ITT dam. example, the decrease in prices of wheat and sugar Without raising the level of ITT, the irrigation by 10 percent makes the Option 2 the dam raise expansion will lead to inefficient water alloca- (three m raise) economically unviable (the current tion, substantial reductions in power production trend of rising world food prices may make this and economic losses for Zambia. The results of decrease in prices quite unlikely). The increase of the Cost-Benefit Analysis (CBA) of the “full” ir- the construction costs by 10 percent–20 percent rigation expansion (Scenario 4) are summarized makes the Option 2 marginally viable (EIRR is close below in Table 2. to 12 percent), while the Option 3 (5 m raise) will have the EIRR at 13 percent. This may be explained A sensitivity analysis was carried out to as- by the fact the ITT storage, specifically during dry sess the to which extent the CBA results are sen- seasons, becomes insufficient to effectively support sitive to changes in the wheat and sugar world the additional downstream irrigation and the same prices, construction capital costs and the eco- high level of the power production. Therefore, the nomic value of hydropower. The analysis showed decision on the “full” irrigation expansion in the that the CBA results for Irrigation Scenarios Central and Kafue Flats sub-basin needs to take 2 and 3 are not very sensitive to the decreases/ into account its adverse impact on the hydropower increases in the economic value of hydropower production and the reduction in the total project assumed, the prices of sugar and wheat, and in the economic benefits. The raise of the dam increases the efficiency of ITT and KGU Power Stations (Table B3). A substantial increase in the firm power outcome is noted. Table B2 The economic value of water use for irrigated agriculture is much lower than for hydropower NPV (at 12% production. However, irrigated agriculture brings discount rate) B/C ratio EIRR important poverty reduction (increased employ- Option 1 –149.18 ment and income) and food security benefits. Option 2 3.54 1.12 13% Therefore there needs to be a policy level decision Option 3 39.37 1.78 16% by the Government on the expansion of the irrigated

63 Zambia: Managing Water for Sustainable Growth and Poverty Reduction

Table B3: Increase in hydropower production due to ITT dam raise 3 m ITT raise 5 m ITT raise ITT power UKG power ITT power UKG power Irrigation scenario Firm Ave Firm Ave Firm Ave Firm Ave No additional irrigation 18% 9% 8% 2.5% 30% 15% 12% 3% 10,000 ha of wheat above ITT 15% 8% 7% 1.5% 27% 14% 11% 2% 10,000 ha of sugar below ITT 18% 9% 4% 0.5% 30% 15% 7.5% 1%

areas in the Kafue, taking into account, on one hand, Raising of the Itezhi Tezhi Dam by three to five potential losses in the maximum power production meters would increase such of the above effects that due to the competitive water demand from irriga- may be due to the reservoir as presently operated tion and, on the other hand, poverty reduction and (if the current release rule is retained), and increase food security benefits of the irrigation expansion. the options for environmental flow trade-offs. In addition, the maximum water-spread area of the reservoir would increase. The effects of this increase Environmental impact of in most cases can very often be ameliorated by im- raising the Itezhi Tezhi Dam plementing a suitable Environmental Management Plan. Any adverse downstream effects will need to There has been concern about reported declines in be the subject of Environmental Impact Assessment the populations of wildlife in the Kafue Flats, and studies as is always required for such projects. Up- increases in cattle diseases and invasive weeds grading of environmental monitoring would enable over areas not recently flooded. While there is more rapid identification of likely adverse effects little quantified environmental information, these and decisions on the responses required. changes have been attributed to the Itezhi Tezhi reservoir reducing the extent and frequency of flooding. The WWF has been helping to develop a Transboundary implications new environmental release rule to mimic natural for the Zambezi Basin wet season discharges, in place of the current rule of a uniform discharge. Such a rule has not yet been The scenarios visited in this analysis include rais- finalized or implemented. A review of the data set of ing of the Itezhi Tezhi Dam, increased hydropower natural inflows for the dam shows that the reservoir generation, particularly firm power production, and is small in capacity compared to the volume of wet increases in irrigation in the Central Kafue River season flows for high flow years, and would not Basin and the Kafue Flats region. The additional affect maximum annual flows for at least the up- river regulating capacity made possible by the dam per 60 percent of flow years. Some of the observed raising options will lead to increased power genera- trends seem thus to be due to climatic effects or to tion. Most of the time, additional power generation pressure of human exploitation rather than reservoir is neutral in terms of its effects on water availability operation. There may however be some adverse for adjacent and downstream riparian countries environmental effects due to the elimination of low in the Zambezi Basin. However, in dry periods, flow periods, or delays or reductions of reservoir increased flow (resulting in increased firm power spills in some years. There is a need for further production) is a substantial and important effect. environmental monitoring to identify the impact This actually would be beneficial to adjacent and of such effects. downstream riparians, because this is when their

64 ANNEX B. Options for Water Resources Development in the Kafue Basin need for water for all uses is greatest. Increased ir- • The data used concerning irrigation in the Kafue rigation in the Kafue Flats results in reduced river Flats include irrigation efficiencies, crop yields, flows commensurate with the increase in transpira- water application rates, and return flows. These tion. However, increased irrigation in the Central have generally been made available first hand Kafue River Basin results in only a partial flow from irrigators, and are probably reliable with reduction effect downstream, because part of the 10 percent accuracy. consumptive water use reduces local evapotrans- • Crop areas used were provided through a short piration instead of river flows. The increase in dry study commissioned in early 2008. They appear period flows due to the dam raising is greater than to be more reliable than earlier estimates, and the flow reduction caused by increased irrigation. are assessed by the consultant as being within Thus the overall effect of a package consisting of the 10 percent, though somewhat more reliable than scenarios of dam raising and increased irrigation, this in the Kafue Flats. as analysed here, will be positive on adjacent and • The reliability of the output of SWP hydrologi- downstream Zambezi riparian countries. cal modelling is dependent on records of flows, reservoir levels and capacity curves. The flows records in particular are of doubtful reliability. Reliability of the In particular, ZESCO’s observation on the reli- data and results ability of the hydrology done by Penman for this study, is that it under-estimates run-off in the Assumptions used by SWP for modeling the effects Kafue Flats region. This suggests that the model of irrigation on power production. results for the effects on power generation at Kafue Gorge probably err on the safe side. • Irrigation in the central basin is mainly of wheat. • Harza’s estimates of power production in- The source of about 10 percent of the water creases for the raising of the Itezhi Tezhi Dam used is direct from the Kafue River, and the are subject to the same errors as above. Their remainder is sourced from sink holes or bore estimates of the effects on power generated at holes tapping groundwater. The aquifers in this Kafue Gorge Upper for the raising of the Itezhi region have their natural discharge paths either Tezhi Dam were made before the commence- into swamps, such as the Lukanga Swamp, or ment of the present upgrading program for the the Kafue River and its tributaries. Increases in turbines and generators at Kafue Gorge Upper. irrigation thus both reduce discharges to the They are thus probably on the low side. Harza swamps (and thus reduce evapotranspiration in also makes clear that the cost estimates for the them) and reduce dry season flows in the River raising of the Itezhi Tezhi Dam are approximate system. The proportion is unknown, and will due to the lack of investigation of the condition vary widely. SWP has assumed that groundwa- of the embankment. The higher the raising, the ter withdrawal for irrigation of the 10,000 ha of greater the uncertainty, so the costing of the 3 wheat would reduce the natural groundwater meter raising option is the most reliable. inflow into the Kafue by the amount equal to 50 • The methodology used in our analysis is based percent of the groundwater withdrawal for the on interpolations between and extrapolations proposed irrigation expansion. This is as good from the results of the SWP modelling. This a number as any to use, but is not based on any suggests that there will be some additional modelling or analysis. The assessment of the uncertainty where the model results show reduction of power generation resulting from non linearity with increasing development. irrigation above the Itezhi Tezhi Dam is thus Observations suggest that the results are mostly a guess, though it is safe to say that the reduc- reasonably linear but there is some non linear- tion of power generated will be less per ha of ity present. irrigation above ITT than for irrigation below • The economic model used in the analysis assumes the Itezhi Tezhi Dam. full-fulfillment of agricultural water requirements

65 Zambia: Managing Water for Sustainable Growth and Poverty Reduction

and associated with this impacts on hydropower involving hydrological modeling and more accu- production. Imposing restrictions on agricultural rate assessment of the irrigation expansion impacts water use in drought periods would minimize on hydropower would be necessary for making a power losses due to irrigation water use. final decision on investments and irrigation/hydropower developments in the Kafue. The analysis Overall, this suggests that the results of this described above also illustrates an approach to the study can point to directions to take, however this assessment of water resources development options analysis does not provide enough accuracy on based on economic criteria and taking into account which to make final decisions. A further analysis multi-sectoral water allocation needs.

66 ANNEX C. Groundwater as a Source of Water for Copperbelt Towns

There is little up to date collated information on the The Kafulafuta River is an uncontaminated groundwater resources of the Copperbelt. Priority stream near Ndola and Luanshya, and construction has so far been given to compiling the available of a dam on it should be considered as a possible information in other regions. According to the avail- source of water for these two towns. able information, aquifers of adequate yield appear The contamination risks from mine related likely to be available in or near all of the Copperbelt discharges appear to be highest for Chingola, towns. Chenov lists records of some 100 wells and Mufulira and Kitwe, in descending order. Ndola boreholes in and near Chililabombwe, Chingola, and Luanshya have needs for alternative sources Mufulira, Kitwe, Ndola and Luanshya.21 These for other reasons and are understood to be well records indicate the presence of aquifers suitable, oriented towards the concept of developing and in terms of yield, for development for water supply. utilizing alternative sources including groundwater. The main concern is that for more than half The at-risk populations are highest in Kitwe and these, iron and/or turbidity are present. This Ndola. These considerations are possible indicators may be an indicator of water quality inadequate of priority. for drinking water supply. It could also result in The sizing of any new resource development clogging of wells with iron precipitates, and may needs to take into account the likely future growth require measures to minimize clogging. Water of the towns and their distribution networks. It treatment may be required to remove bacteria and may be efficient in terms of transaction costs, and iron precipitates or other suspended solids. Past gain the widest possible acceptance from the com- hydrogeological investigations in Zambia sug- munities, if the opportunity is taken at the same gest that semi-confined or confined aquifers may time to extend the distribution networks to existing underlie the unconfined upper aquifer. In those unserved housing areas. This would be especially cases where the quality of the water in the upper important and efficient for areas adjacent to any aquifer is poor, exploring deeper to seek better qual- new transmission mains. ity water would often be advisable. Confined and semi-confined aquifers are, as well, better protected against contamination, provided that the wells are Next steps for protection properly constructed. and development of For Ndola, partial construction of a well-field water supplies was undertaken at Musundu, but it has not been completed, or fully equipped and connected into The next steps for the protection and development the town water supply reticulation system. Kalu- of water supplies would be a program of hydro- lushi is a small town with supply problems. Some geological exploration to seek groundwater of groundwater exploration has been undertaken suitable quality and yield, and which is unlikely there, without finding supplies of adequate quality. It has a pipe connection to nearby Kitwe which has 21 Chenov, 1978 The Groundwater Resources of Southern Prov- been used intermittently. inces in Zambia.

67 Zambia: Managing Water for Sustainable Growth and Poverty Reduction to be subject to contamination from overlying land • Undertake a pre-feasibility study of the Kafu- use, giving priority to seeking alternative water lafuta River as a possible source of water for sources for the towns whose water supplies are at Ndola and Luanshya. Proceed to a full feasibil- the greatest risk. The sequence of actions is sum- ity study if this option is ranked highest in terms marized below: of cost, reliability and water quality protection. • Design the well fields, power supplies, treatment • Obtain and collate all available hydro-geological and storage facilities, and any linking pipe and information for the Copperbelt. valve work. The design process would include • Consult with stakeholders. Confirm priorities construction and testing of pilot wells. Provision for upgraded water sources. Establish a stake- for staged construction may be necessary. holder body or bodies to oversee exploration • Determine and design any extensions of town and design and to develop land use controls water supply and sewerage reticulation sys- over planned and future well fields and critical tems. recharge areas. • Agree upon and implement land use controls • Determine scenarios for reticulation system over planned well-fields and critical recharge development, and future demand. areas. • Determine areas for priority exploration, based • For each priority town, implement the designed on risks to the existing water supply systems supply systems and associated reticulation and on available hydro-geological information, systems. Implementation of well field systems and prepare an exploration plan. is best done with some funding and flexibility • Undertake the initial exploration program, available to adjust some aspects of the design including geophysical methods, drilling and to deal with problems encountered during con- sampling, drawdown testing, and laboratory struction and pre-handover testing, for example testing of water samples, using both Zambian to enable re-sizing of pumps if necessary to and foreign laboratory facilities. eliminate well clogging.

68 ANNEX D. Technical Notes on Modeling Economy-wide Impacts of Rainfall Variability in Zambia

Two types of models were used to analyze economic and a calibrated crop coefficient which converts impacts of variability and climate change. An in- the reference ET to potential ET of the crop, un- tegrated hydro-crop (HC) model was first used to der given climatic conditions. With rainfall and jointly predict soil water balances and crop yield potential ET, the soil water balance module cal- responses in Zambia’s agro-ecological regions. This culates actual ET and water surplus using actual information was then passed to a dynamic econo- soil water content and available water capacity mywide computable general equilibrium (DCGE) (AWC) in crop root region. If the soil water content model, which estimated impacts on production is above a threshold level of AWC then actual ET at the subsector, zonal and national level and on takes place at the potential rate. But if it is not, household incomes and poverty.22 then actual ET is stressed by soil moisture. Surface runoff and deep percolation occur if the estimated end-of-period soil water content exceeds AWC. Hydro-crop model The soil water balance module runs continuously and produces actual ET, which is then used in Quantitative information on crop yield responses the crop water production function to estimate to water deficiency is crucial for evaluating the crop yield reduction resulting from water deficit. economic impacts of climate variability and As daily climate data was not available, the soil change on agricultural production. A semi-em- water balance simulations were done at monthly pirical model was developed that includes two intervals using long-term monthly data. modules. The first module simulates soil water The second module in the hydro-crop model balance in crop root region to derive actual evapo- was a nonlinear Jensen crop water production mod- transpiration (ET). The second module estimates el, which was used to estimate crop yield responses crop yield responses to water deficits using an to water using monthly data of actual and potential empirical crop water production function that ET values during crop growing season. The Jensen takes into account growing stage-specific crop function is an empirical water production function sensitivity to water stress. Together these two but its advantage over the FAO crop yield response modules form the integrated ‘hydro-crop’ model model is that the Jensen function can take into ac- that is used in this study. count growth stage-specific sensitivity to water of The soil water balance module regards crop crops. By contrast, the FAO model only considers root region as a bucket with water flowing in water deficits for the entire growing season and through rainfall, and irrigation if applicable, and thus cannot capture monthly climate variations water leaking away as ET, runoff and deep per- and crop yield sensitivities to water. We compared colation. The first step in the soil water balance is to estimate crop water requirements, which are normally expressed as a rate of potential ET. The 22 The full description of the analysis in: The Impact of Climate potential ET for a particular crop is estimated us- Variability and Change on Economic Growth and Poverty in Zambia. Diao, X., Thurlow, J., Zhu, T. IFPRI, Washington DC. ing potential ET of a reference crop, usually alfalfa, Zambia CWRAS Background Paper, 2009.

69 Zambia: Managing Water for Sustainable Growth and Poverty Reduction observed yields in the five agro-ecological regions conditions vary across regions, and how climate in Zambia with simulations from both Jensen and affects crops differently according to their agro- FAO models and found that the Jensen function nomic characteristics. outperformed the FAO model for our purposes One can think of the DCGE model as contain- since crop losses in Zambia are particularly sensi- ing five representative farmers for the five regions tive to seasonal water deficits, especially in major and another two for large scale and urban farms. drought years. For each crop, water sensitivity The model is calibrated to the pattern of farm and index values in the Jensen crop water production nonfarm production observed in 2005/06. Non- function were estimated based on stage-specific farm employment and income patterns are from FAO yield response factors using OLS regression. the 2004 Living Conditions Monitoring Survey These were then mapped to each month in crops’ (LCMS4). As we impose changes on the model growing periods using a cumulative sensitivity (e.g., crop yield changes from the HC model), index method. each farmer responds to changing relative prices For all crops and all agro-ecological regions for farm/nonfarm goods/services by reallocating in Zambia, their hydro-crop model simulations labor and capital assets across farm/non-farm were done based on observed meteorological activities in order to maximize profits. So farmers data provided by the Zambia Department of can change cropping and livestock patterns and Meteorology. This part of the study used monthly engage more or less intensively in nonfarm activi- climate data from 1975 to 2007 at thirty meteoro- ties. Farmers can also migrate to urban centers and logical stations. Rainfall and calculated potential nonagricultural jobs (both are modeled explicitly). ET were aggregated to the five agro-ecological re- Providing farmers with these production/employ- gions based on the estimated influencing domain ment options captures some autonomous adapta- of each station. The latter was based on the area tion to climate changes. We do, however, limit the of a region’s Thiessen polygon and the areas of extent to which farmers can adjust cropping pat- other Thiessen polygons within the same agro- terns in response to short-term climate variability. ecological region. We assume that land allocations are determined at the start of the season, and, once planted, farmers cannot reallocate land to different crops during the Economywide model season (i.e., land allocations are exogenous). This assumption is appropriate since farmers typically An economywide model was then developed cannot predict and respond to climate variation to estimate economic impacts of climate vari- once land in planted. They can, however, reallocate ability and change. This DCGE model contains mobile resources, such as labor, and influence the information on different sectors, factors and level of production. households in each of the five agro-ecological Each factor of production (i.e., land, labor regions. For example, the model distinguishes and capital) earns returns from their use in the between 34 different sectors, half of which are production process. Producers in each sector/ crop and livestock subsectors and the other half region can, to some extent, substitute between are industrial and service subsectors. Production factors depending on relative costs. The model in each agricultural subsector was disaggregated distinguishes between self-employed agricultural across regions using district-level data provided workers; unskilled workers working in agriculture by the Ministry of Agriculture, MACO. We also and non-agriculture; and skilled non-agricultural separate small/large scale and rural/urban agri- workers. Information on employment and wages cultural production. So the model captures differ- is from LCMS4, and labor supplies expand over ences in cropping and livestock patterns driven time according to demographic projections. Capital by agro-ecological conditions and by farm land is immobile across sectors, and, after accounting endowments. This disaggregation of production for annual depreciation, is supplemented by past allows the DCGE model to capture how climate investments allocated according sectors’ relative

70 ANNEX D. Technical Notes on Modeling Economy-wide Impacts of Rainfall Variability in Zambia profitability. This is the ‘recursive’ dynamic feature Combining the HC of the DCGE model. Total factor inputs are then and DCGE models combined with intermediate inputs (e.g., fertilizer and fuels) to produce a total level of output. These The DCGE model is run over ten years from 2006 to sector-specific production technologies are taken 2016. We first assume no effects from climate vari- from a 2006 Zambian social accounting matrix ability. This is the ‘normal’ (baseline) sequence and (SAM). Producers in each sector/region decide is an optimistic scenario. We then impose the effects how much output to supply to national domestic of future rainfall variability on the DCGE model. and foreign markets based on relative prices. Since Since there is uncertainty about future climate Zambia is a small country, we assume that world patterns, we draw a number of possible ten year prices are fixed, but are influenced by changes in consecutive climate sequences out of the historical the real exchange rate, which adjusts to maintain dataset (i.e. index sequential method). Since there the current account balance. are 32 possible starting years in the climate dataset, In order to capture how different households there are 32 possible ten year sequences (i.e., assum- are affected by climate variability and change, ing the dataset wraps around itself). We run the the model distinguishes between representative DCGE for all possible sequences, thus capturing households in each region, including small/large the full distribution of historical climate variability. scale rural/urban farmers, and rural/urban non- Based on the HC model results, the predicted crop farm households. Income and expenditure patterns yield losses in each region caused by climate vari- vary across household groups. This is important ability in each year of historical climate data are for distributional change since incomes generated then imposed on the DCGE model. This is done by during farm/nonfarm production accrue to differ- reducing the level of total factor productivity (TFP) ent households depending on their location and for each crop and region. This causes production to factor endowments. Households in the model re- fall relative to the normal sequence whenever zonal ceive factors’ incomes and then pay taxes, save and climate conditions are suboptimal. make transfers to other households. Remaining In certain years in the historical data there were incomes are used to consume goods and services, severe droughts and floods, which caused addition- which can either be purchased locally or imported al shocks to the economy. These severe events were depending on relative prices. Taxes are collected by identified using Drought Index Analysis based on the Government, which also consumes goods and deviations in historical climate data. During these services, while pooled savings are used to finance severe event years we capture two additional eco- investment spending. Total demand interacts with nomic impacts. First, agricultural land and livestock production and trade (i.e., supply) to determine stocks expand each year under the normal sequence, prices in the model. This full specification of sup- but stop expanding during extreme event years and ply/demand for commodities and factors using gradually return to normal expansion rates over a production and utility functions is the ‘general two year period. This captures, for example, how equilibrium’ feature of the DCGE model. Finally, severe droughts reduce the size of livestock stocks in order to retain as much information as possible and have a lagged effect on their subsequent rate of on households’ income and expenditure patterns, accumulation. Secondly, capital depreciation rises the DCGE model is linked to a microsimulation during a severe event year, and smoothly returns module based on LCMS4. Changes in consumption to normal rates over a two year period. This cap- for each representative household in the DCGE tures the effects of, for example, severe flooding on model are used to adjust the level of commod- economywide capital stocks. These two additional ity expenditure of corresponding households in impact channels are imposed on the DCGE only LCMS4. Consumption levels are then recalculated when severe drought and flood years are selected in the survey, and standard poverty measures are from the historical climate dataset and occur over re-estimated. and above the yield shocks described above. The

71 Zambia: Managing Water for Sustainable Growth and Poverty Reduction results from all 32 climate sequences, including climate datasets are produced for each climate extreme events, are then averaged to produce an change scenario. These datasets thus contain both average sequence that contains the likely effects of the effects of climate variability and change. The climate variability. Deviation between the average HC model re-estimates yield losses for each year and normal sequences in the DCGE model is the in the synthetic dataset. The DCGE model is then economic impact of climate variability. rerun using the 32 possible climate sequences from Finally, climate change is assumed to affect each synthetic dataset. Deviation between these mean temperature and precipitation in each agro- sequences and the average variability sequence is ecological region. These changes are added to the economic impact of climate change (i.e. over and historical climate data and new synthetic 32-year above the impact of climate variability).

72 ANNEX E. Rapid Resource Assessment of the Kafue River Basin

Remote sensing data was used to determine the estate managers, commercial farmers and, where extent of irrigation activities within the Kafue River possible, cross referenced with water meter read- Basin and investigate the ability of such data to ings. Hence, water use calculations were done using provide a holistic spatial data platform relevant to time-series data, overlaid farm boundaries and crop integrated water resources management in Zambia. identification. This was obtained through cross referencing of With regards to water resources, a new digital time series data, satellite imagery and Geographic elevation model was constructed using current RA- Information System analysis (GIS). DAR remote sensing data to refine and determine catchment areas, establish stream network mapping and detail spatial data for runoff calculations. Com- Methodology bined with land cover and soil data these allow for an extensive range of hydrological analysis. The spatial analysis used high resolution satellite imagery of the Copperbelt, Central Kafue Basin and the Kafue Flats as a backdrop. These were Irrigation processed with multispectral imagery including geo-referencing and ortho-rectification as well as Based on the remote sensing data, the area under reflectance calibration. Comparisons were made irrigation in the Kafue River Basin is estimated to between 2008 and 2001 imagery to determine the be 49,653 ha. Of this total, 40,660 ha is based on rate of irrigation development within the basin, surface water irrigation and 8,993 ha (22 percent) on assess rates of deforestation and visualize spatial ground water abstraction. The current distribution developments. The images were then classified and of water rights registered in the basin records the presented as a series of thematic maps. total irrigated area, based on surface water, within Infrastructure, such as road- and rail networks, the basin to be 34,966 ha. was constructed by HUD digitizing from the imagery Eighty percent of the irrigation is in the Kafue as were towns and settlements. Irrigated land was Flats sub-catchment and 66 percent of the total irri- then identified (4 ha and larger) using a combination gated area is under sugar cane production. Irrigation of supervised classification, NDVI (normalized dif- withdrawals from within the Kafue River Basin are ference vegetation index) and thermal reflectances. estimated to total 621,274 ML, with the balance be- Each farm was assigned the Zambian registry farm ing consumed by mining, industry and municipal. number. The specific reflectances were then further The time series analysis of spatial data from classified to determine crop type and irrigation sys- the satellite images shows a substantial increase tem (from field form). Main crop types were wheat, in the development of irrigation within the Kafue rice and sugar cane which have different water use River Basin. In the Mazabuka District there has efficiencies and often different irrigation systems. been a roughly 40 percent increase (Figure E1 and Once the crop type was established the standard E2), with most developments under centre pivot water usage figures were applied as indicated by irrigation. With limited water available for further

73 Zambia: Managing Water for Sustainable Growth and Poverty Reduction

Figure E1: Mazabuka District, Nov. 2001 Figure E2: Mazabuka District, Sep. 2008

development of irrigated agriculture in these areas results in forgone revenue opportunities to the sec- the shift from traditional furrow irrigation to more tor through license fees. efficient methods will improve efficiency. The results highlight the need to maintain effective mechanisms for rapid appraisal and verification Deforestation of water rights within the basin. The results suggest that the register of existing water rights does Two example sites of deforestation in the upper not fully capture all of the water being used in the Kafue catchment were investigated based on a basin, resulting in the potential over-estimation of spatial analysis of the remote sensing data. Defor- water available for further development. This also estation rates were assessed based on a comparison

Figure E3: Mpongwe-Kampemba, August 2001 Figure E4: Mpongwe-Kampemba, July 2008

74 ANNEX E. Rapid Resource Assessment of the Kafue River Basin of canopy loss within areas of Miombo woodland and falling limb of the hydrograph and reduced between 2001 and 2008. These are illustrated by baseflow contributions, undermining the natural the example from Mpongwe-Kampemba (Figure attenuation of stream flow within the catchment. E3 and E4). Riparian cultivation and deforestation also result The high rates of deforestation observed within in increased sediment loads. In areas such as the sub-catchments of the Kafue River Basin suggest Copperbelt with high levels of soil contamination, that runoff could be increased by between five and erosion induced by deforestation can accelerate 30 percent per unit area and five percent at scale of the transport of polluted sediments and fine silts tertiary catchment. This results in a steeper rising negatively impacting water quality.

75 A COUNTRY WATER RESOURCES ASSISTANCE STRATEGY FOR ZAMBIA

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