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08037-9781451889949.Pdf © 2005 International Monetary Fund March 2005 IMF Country Report No. 05/112 [Month, Day], 2001 [Month, Day], 2001 Zambia: Poverty Reduction Strategy Paper Progress Report Poverty Reduction Strategy Papers (PRSPs) are prepared by member countries in broad consultation with stakeholders and development partners, including the staffs of the World Bank and the IMF. Updated every three years with annual progress reports, they describe the country's macroeconomic, structural, and social policies in support of growth and poverty reduction, as well as associated external financing needs and major sources of financing. This country document for Zambia, dated December 2004, together with the addendum to the second PRSP progress report, dated February 2005, and the supplement on policies and objectives for 2005, dated February 2005, is being made available on the IMF website by agreement with the member country as a service to users of the IMF website. To assist the IMF in evaluating the publication policy, reader comments are invited and may be sent by e-mail to [email protected]. Copies of this report are available to the public from International Monetary Fund • Publication Services 700 19th Street, N.W. • Washington, D.C. 20431 Telephone: (202) 623-7430 • Telefax: (202) 623-7201 E-mail: [email protected] • Internet: http://www.imf.org Price: $15.00 a copy International Monetary Fund Washington, D.C. This page intentionally left blank Republic of Zambia Second PRSP Implementation Progress Report July 2003 – June 2004 MINISTRY OF FINANCE AND NATIONAL PLANNING PLANNING AND ECONOMIC MANAGEMENT DEPARTMENT P.O. BOX 50062 LUSAKA DECEMBER 2004 1 EXECUTIVE SUMMARY ............................................................................................................................................5 CHAPTER 1 INTRODUCTION...........................................................................................................................10 CHAPTER 2 MACROECONOMIC PERFORMANCE AND STRUCTURAL REFORMS ..........................11 TABLE 2.1: DOMESTIC BUDGET PERFORMANCE: JANUARY TO JUNE 2004 (IN K’BILLION)............13 TABLE 2.2: STATUS OF THE KEY PRSP MACROECONOMIC INDICTORS AS OF JUNE 2004...............15 TAB TABLE 2.4 PRSP AND MDG INDICATORS...........................................................................................19 GOAL/INDICATORS .....................................................................................................................................................19 TARGET S....................................................................................................................................................................19 GOAL 6: COMBAT HIV/AIDS, MALARIA AND OTHER DISEASES................................................................19 GOAL 7: ENSURE ENVIRONMENTAL SUSTAINABILITY...............................................................................19 4.1 ECONOMIC SECTORS ...............................................................................................................................23 4.1.1 AGRICULTURE..............................................................................................................................................23 4.1.2 TOURISM ......................................................................................................................................................25 4.1.3 MINING..............................................................................................................................................................26 GOVERNMENT’S OVERALL GOAL IN THE SECTOR IS TO PROMOTE INVESTMENT IN THE MINING INDUSTRY AND ENSURE THE DEVELOPMENT OF A SELF-SUSTAINING MINERAL-BASED INDUSTRY. DERIVED FROM THE OVERALL GOAL ARE TWO OBJECTIVES. THESE ARE AS FOLLOWS: .......................................................................................................................26 • TO ATTRACT INVESTMENTS FOR THE DEVELOPMENT OF LARGE MINES THROUGH INFRASTRUCTURE DEVELOPMENT; AND ...................................................................................................................................................26 • TO REVITALIZE AND ENSURE REALISATION OF THE POTENTIAL OF THE SMALL-SCALE MINING SUB-SECTOR .....26 THE CURRENT PRSP INTERVENTIONS ONLY RELATE TO SMALL-SCALE MINING. IN THIS REGARD, FOUR PROGRAMMES WERE PLANNED TO BE UNDERTAKEN. THESE WERE THE ESTABLISHMENT OF THE GEMSTONE EXCHANGE, THE CREATION OF A MINING COMMUNITY DEVELOPMENT FUND (REVOLVING FUND), THE INTRODUCTION OF THE PLANT HIRE SCHEME, AND THE SYSMIN MINING DIVERSIFICATION PROGRAMME..............................................................26 IN 2003, GOVERNMENT ALLOCATED AND RELEASE K1 BILLION TOWARDS THE ESTABLISHMENT OF A GEMSTONE EXCHANGE. THE DISBURSEMENT WAS MADE AT THE END OF THE SECOND QUARTER, THEREBY FACILITATING ACTIVITIES IN THE LAST HALF OF THE YEAR. IN 2004, THE GOVERNMENT TARGETED TO IMPLEMENT THREE PROGRAMMES. TO THIS END, A TOTAL OF K2 BILLION WAS ALLOCATED AND K 2.06 BILLION WAS DISBURSED BY JUNE 2004(SEE APPENDIX 7)...............................................................................................................................................26 TABLE 4.1 NO. OF LICENCES ISSUED BY JUNE 2004.......................................................................................27 4.1.4 MANUFACTURING...........................................................................................................................................27 TABLE: 4.2 PRPS GOVERNMENT RELEASES FOR 2003..................................................................................28 STATUS OF IMPLEMENTATION...........................................................................................................................28 4.1.5 ENERGY .............................................................................................................................................................29 4.1.6 INFRASTRUCTURE..................................................................................................................................31 TABLE: 4.4 FUNDING FOR POVERTY REDUCTION PROGRAMMES TO PROVINCES IN 2004.............32 TABLE: 4.5 STATUS OF IMPLEMENTATION FOR ROADSIP PHASE...........................................................33 TABLE: 4.7 PROGRAMME IMPLEMENTATION STATUS FOR THE RAILWAY SUB SECTOR ..............35 CHIPATA / MCHINJI RAILWAY ....................................................................................................................................35 THE GOVERNMENT OF THE REPUBLIC OF ZAMBIA SIGNED A MEMORANDUM OF UNDERSTANDING WITH ELDLOW RESOURCES LIMITED, IN THE SECOND HALF OF 2003, TO CARRYOUT FEASIBILITY STUDY ON THE VIABILITY OF THE CHIPATA / MCHINJI RAILWAY PROJECT ON BUILD OPERATE AND TRANSFER.............................................................35 LIVINGSTONE INTERNATIONAL AIRPORT....................................................................................................................36 THE RUNWAY AT THE LIVINGSTONE INTERNATIONAL AIRPORT WAS RESURFACED IN 2002 AT A COST OF US $ 1.9 MILLION. THE WORKS COMPRISED AN ASPHALT OVERLAY TO STRENGTHEN THE LOAD BEARING CAPACITY OF THE RUNWAY.....................................................................................................................................................................36 2 4.2 SOCIAL SECTORS ........................................................................................................................................37 4.2 1. EDUCATION SECTOR ....................................................................................................................................37 4.2.1.1 INFRASTRUCTURE DEVELOPMENT.....................................................................................................37 REHABILITATION OF THE UNIVERSITY OF ZAMBIA AND COPPERBELT UNIVERSITY ...................37 OTHER INFRASTRUCTURE DEVELOPMENT PROGRAMMES.....................................................................37 OTHER INFRASTRUCTURE DEVELOPMENT PROGRAMMES GOVERNMENT UNDERTOOK DURING THE PERIOD UNDER REVIEW INCLUDED THE CONSTRUCTION OF CHINSALI TEACHERS’ TRAINING COLLEGE, TEACHERS’ HOUSES AND THREE RURAL SECONDARY SCHOOLS. THE BUDGET FOR THESE PROGRAMMES WAS K20.5 BILLION. DUE TO FINANCIAL CONSTRAINTS FACED BY GOVERNMENT, ONLY CHINSALI COLLEGE RECEIVED FUNDING OF K500 MILLION (SEE APPENDIX 12B)....................................................................................................................37 5. SUPPORT TO COMMUNITY SCHOOLS ...........................................................................................................38 6. HIV /AIDS AWARENESS.......................................................................................................................................38 7. RURAL HARDSHIP ALLOWANCE ....................................................................................................................38 COMPLETION RATE ................................................................................................................................................39 THE PROPORTION OF PUPILS STARTING GRADE 1 WHO REACHED GRADE 7 IN 2003 WAS 73.5%. MEANWHILE, THE PERCENTAGE OF GIRLS WHO STARTED GRADE ONE, AND REACHED GRADE 7 WAS 66.7 WHICH WAS BELOW THE 2003 TARGET OF 72 PERCENT, WHILE 80.3 PERCENT OF BOYS WHO STARTED GRADE 1 REACHED GRADE 7, WHICH WAS BELOW BY 2% FROM 82 PERCENT TARGET ...................................................................................................................................................39
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