2013 Zambia Economic Report

8/11/2019 2013 Zambia Economic Report

1/86

Annual

EconomicReport

MINISTRY OF FINANCE 2 3

Republic of Zambia


2/86

Republic of Zambia

2013

ANNUAL ECONOMIC REPORT


3/86

2014 Ministry of Finance

For comments and contributions please contact:

Economic Management Department

Ministry of Finance

P.O. Box 50062Lusaka

Tel: +260 211 257178

Internet: www.mofnp.gov.zm


4/86

iii

FOREWORD

The 2013 annual economic report evaluates the performance of the economy based on the objectives

and programmes of the Government as highlighted in the 2013 budget address.

The countrys macroeconomic conditions remained favourable evidenced by sustained positive economic

growth, single digit inflation, positive current account balance and a relatively stable exchange rate.

Growth at 6.4 percent was mainly driven by positive developments in the mining, construction, transport,

storage and communication sectors. In terms of fiscal performance, revenues were below target while

total expenditures were above target resulting in a much higher overall budget deficit of 6.8 percent of

GDP against the projection of 4.3 percent of GDP. The budget was faced with pressures emanating from

payment of arrears related to fuel and maize subsidies and a higher than budgeted wage award.

In the external sector, the current account surplus narrowed while the capital and financial account deficit

widened. As a consequence, the overall Balance of Payments (BoP) recorded a deficit. In line with these

developments there was a decline in Gross International Reserves (GIR) which translated into lower

months of import cover.

In 2014, the goal of the Government is to pursue policies and strategies for consolidating growth, income

generation, job creation and poverty reduction.

Pamela C. Kabamba

ACTING SECRETARY TO THE TREASURY


5/86


6/86

v

TABLE OF CONTENTS

LIST OF TABLES................................................................................................................................ ix

LIST OF FIGURES.............................................................................................................................. xiEXECUTIVE SUMMARY....................................................................................................................xiii

Part I DEVELOPMENTS IN THE GLOBAL ECONOMY............................................................................... 1

1.0 DEVELOPMENTS IN THE GLOBAL ECONOMY ........................................................... 3

1.1. OVERVIEW ................................................................................................................................. 3

1.2. DEVELOPMENTS IN ADVANCED ECONOMIES......................................................................4

1.3. DEVELOPMENTS IN EMERGING AND DEVELOPING ECONOMIES ..................................... 4

1.4. COMMODITY PRICE DEVELOPMENTS................................................................................... 51.5. IMPACT OF GLOBAL DEVELOPMENTS ON THE ZAMBIAN ECONOMY...............................5

Part II DEVELOPMENTS IN THE DOMESTIC ECONOMY ......................................................................... 7

2.0 REAL SECTOR DEVELOPMENTS.................................................................................9

2.1. OVERVIEW ................................................................................................................................. 9

2.2. AGRICULTURE, FORESTRY AND FISHING ............................................................................9

2.3. MINING .....................................................................................................................................13

2.4. MANUFACTURING...................................................................................................................14

2.5. ENERGY ...................................................................................................................................15

2.6. TOURISM..................................................................................................................................18

2.7. TRANSPORT AND COMMUNICATIONS.................................................................................20

3.0 SOCIAL SECTOR DEVELOPMENTS........................................................................... 27

3.1. EDUCATION .............................................................................................................................27

3.1.1. General Education ........................................................................................................27

3.1.2. Enrolments.................................................................................................................... 27

3.1.3. Gender Parity................................................................................................................ 28

3.1.4. Pupil Teacher Ratio ......................................................................................................28

3.1.5. Tertiary Education.........................................................................................................28

3.2. HEALTH....................................................................................................................................30

3.2.1. Disease Burden ............................................................................................................ 31

3.2.2. Maternal And Child Health............................................................................................ 31

3.2.3. Human Resources ........................................................................................................32


7/86

vi

4.0 BUDGET PERFORMANCE........................................................................................... 35

4.1. REVENUE PERFORMANCE....................................................................................................35

4.1.1 Domestic Revenue ............................................................................................................ 36

4.1.2 Tax Revenues....................................................................................................................36

4.1.3 Non Tax Revenue.............................................................................................................. 36

4.1.4 Grants ................................................................................................................................ 37

4.2. EXPENDITURE PERFORMANCE............................................................................................37

4.2.1 Expenses ........................................................................................................................... 39

4.2.2 Personal Emoluments........................................................................................................39

4.2.3 Use of Goods and Services ............................................................................................... 39

4.2.4 Interest on Domestic Debt ................................................................................................. 40

4.2.4 External Debt Interest and Amortisation ............................................................................ 40

4.2.5 Grants and Other Payments .............................................................................................. 404.2.6 Social Benefits ................................................................................................................... 40

4.2.7 Other Expenses ................................................................................................................. 41

4.2.8 Assets ................................................................................................................................ 41

4.2.9 Liabilities ............................................................................................................................ 41

4.3. BUDGET DEFICIT ....................................................................................................................42

5.0 DOMESTIC DEBT ......................................................................................................... 43

6.0 MONETARY AND FINANCIAL SECTOR DEVELOPMENTS ................................ ....... 456.1. MONETARY DEVELOPMENTS ...............................................................................................45

6.1.1. Broad Money ................................................................................................................45

6.1.2. Domestic Credit ............................................................................................................ 46

6.2. INFLATION DEVELOPMENTS.................................................................................................46

6.2.1. Non Food Inflation ........................................................................................................47

6.2.2. Food Inflation ................................................................................................................47

6.3. INTEREST RATES DEVELOPMENTS.....................................................................................47

6.3.1. Yield Rates on Government Securities.........................................................................47

6.3.2. Yield Rates on Treasury Bills .......................................................................................48

6.3.3. Yield Rates on Government Bonds ..............................................................................48

6.3.4. Nominal Interest Rates .................................................................................................49

6.3.5. Real Interest Rates.......................................................................................................50

6.4. FOREIGN EXCHANGE MARKET DEVELOPMENTS..............................................................50

6.4.1. Exchange Rate ............................................................................................................. 50

6.4.2. Supply and Demand of Foreign Exchange...................................................................51


8/86

vii

6.5. FINANCIAL SECTOR DEVELOPMENTS.................................................................................52

6.5.1. Banking Sector ............................................................................................................. 52

6.5.2. Regulatory Developments ............................................................................................52

6.5 NON-BANK FINANCIAL INSTITUTIONS ................................................................................. 53

6.6 CAPITAL MARKETS DEVELOPMENTS .................................................................................. 53

6.6.1 Stock Market.................................................................................................................53

6.6.2 Bond Market .................................................................................................................54

7.0 EXTERNAL SECTOR DEVELOPMENTS..................................................................... 55

0.1. BALANCE OF PAYMENTS.......................................................................................................55

7.1.1 Current Account............................................................................................................ 56

7.1.2 Capital and Financial Account ......................................................................................58

0.2. EXTERNAL DEBT POSITION ..................................................................................................58

7.2.1 External Debt Service ...................................................................................................597.2.2 Loans contracted in 2013 ............................................................................................. 59

8.0 PROSPECTS FOR 2014 ............................................................................................... 61

Part III ANNEXES 63

ANNEX I ............................................................................................................................................. 65

ANNEX II ................................................................................................................................ ............ 66

ANNEX III ........................................................................................................................................... 67ANNEX IV........................................................................................................................................... 68


9/86


10/86

ix

LIST OF TABLES

Table 1: Overview of the World Economic Outlook, 2011-2013 ------------------------------------------------------ 3

Table 2: Area Planted, Yield and Crop Production, 2012/2013 season--------------------------------------------- 9Table 3: Zambia National Food Balance Sheet for the 2013/2014 Marketing Year-----------------------------10

Table 4: Livestock Estimates, 2012-2013 ---------------------------------------------------------------------------------11

Table 5: Milk Production Estimates in Litres, 2011-2013 --------------------------------------------------------------11

Table 6: Livestock Slaughters, 2012-2013 --------------------------------------------------------------------------------11

Table 7: Production of Fish by Selected Fishery Area (tonnes), 2011-2013--------------------------------------12

Table 8: Aquaculture Production of Fish (tonnes) by Released Species, 2011-2013 --------------------------12

Table 9: Exports and Import of Fish in Mt, 2011-2013 -----------------------------------------------------------------12

Table 10: Index of Industrial Production, 2012-2013 -------------------------------------------------------------------14

Table 11: Electricity Generation, 2012-2013------------------------------------------------------------------------------15Table 12: Electricity Consumption by Sector (Million Kwh), 2012-2013--------------------------------------------15

Table 13: National Consumption of Petroleum Products, 2011-2013 ----------------------------------------------17

Table 14: International Tourists Arrivals by Country of Origin, 2011-2013 ----------------------------------------18

Table 15: Employment, Room and Bed Occupancy Rates, 2011-2013--------------------------------------------18

Table 16: Tourist Arrivals at Major National Parks, 2012-2013 ------------------------------------------------------19

Table 17: Tourists Visits to National Parks by Area of Origin, 2012-2013-----------------------------------------19

Table 18: Hunting Blocks and Unfenced Private Wildlife Estates ---------------------------------------------------19

Table 19: Passenger Performance at the Four Major Airports, 2012-2013 ---------------------------------------20

Table 20: Aircraft Movement, 2012-2013----------------------------------------------------------------------------------20

Table 21: Number of Passengers Transported, 2011- 2013----------------------------------------------------------21

Table 22: Population of Vehicles Registered, 2011- 2013 ------------------------------------------------------------21

Table 23: Passenger and Cargo Performance for TAZARA and ZRL, 2012-2013 ------------------------------22

Table 24: Subscriber Base, 2012-2013 ------------------------------------------------------------------------------------22

Table 25: Mobile International Incoming and Outgoing Minutes, 2012-2013 -------------------------------------24

Table 26: Mobile Domestic Outgoing and Incoming minutes for MNOs, 2012-2013----------------------------24

Table 27: Internet Usage, 2012-2013 --------------------------------------------------------------------------------------25

Table 28: Number of Schools, 2011-2013---------------------------------------------------------------------------------27

Table 29: Enrolments and Gender Parity, 2011-2013 ------------------------------------------------------------------28

Table 30: Pupil - Teacher Ratio, 2011-2013 ------------------------------------------------------------------------------28

Table 31: Number of Registered Institutions by Ownership, 2012-2013-------------------------------------------29

Table 32: Student Enrolment by Programme and Gender, 2012-2013 --------------------------------------------29

Table 33: College of Education Student Enrolments, 2011-2013----------------------------------------------------30

Table 34: Public Universities Enrolments by Gender, 2012-2013 ---------------------------------------------------30

Table 35: Top ten (10) Causes of Morbidity for All Age Groups, 2012-2013 -------------------------------------30


11/86

x

Table 36: Maternal Health and Family Planning Indicators, 2012 -2013-------------------------------------------32

Table 37: Trends in Human Resource Establishment, 2012-2013 --------------------------------------------------33

Table 38: National Clinical Workers per 1,000 Population, 2012- 2013--------------------------------------------33

Table 39: Revenue Performance, 2013------------------------------------------------------------------------------------35

Table 40: Central Government Operations, 2013 -----------------------------------------------------------------------37

Table 41: Domestic Debt Position, 2011-2013, (ZMW Million) ------------------------------------------------------43

Table 42: Loans and Advances by Sector (%), December 2011-December 2013 ------------------------------46

Table 43: Non-Bank Financial Institutions Licensed by the Bank of Zambia as at 31 December 2013----53

Table 44: Balance of Payments 2011-2013, (in US $ Million) --------------------------------------------------------55

Table 45: Major Non-Traditional Exports (C.I.F.), 2011-2013 (US$ Millions) ------------------------------------57

Table 46: External Debt Stock in US Million, 2011-2013 --------------------------------------------------------------58

Table 47: Public External Debt Service, 2011-2013 --------------------------------------------------------------------59

Table 48: Loans Contracted by Government in 2013-------------------------------------------------------------------59

Table 49: Selected Macroeconomic Indicators, 2011-2013-----------------------------------------------------------65Table 50: Percentage changes in G.D.P by kind of Economic Activity (Constant 1994 prices), 2011-2013

---------------------------------------------------------------------------------------------------------------------------------------66

Table 51: GDP by Kind of Economic Activity (Constant 1994 Prices in K'Billion), 2011-2013----------------67

Table 52: GDP By Kind Of Economic Activity At Current Prices (KBillion), 2011-2013 -----------------------68


12/86

xi

LIST OF FIGURES

Figure 1: Copper Production for Large Mines (Mt), 2012-2013 ------------------------------------------------------13

Figure 2: Export and Imports of Electricity, 2012-2013-----------------------------------------------------------------16Figure 3: Comparison of Regional Prices for Petrol and Diesel (US$ per litre) ----------------------------------17

Figure 4: Pre-paid Subscriptions, 2012-2013-----------------------------------------------------------------------------23

Figure 5: Post-paid Subscription, 2012-2013-----------------------------------------------------------------------------23

Figure 6: Full Immunization Coverage, 2010-2013----------------------------------------------------------------------32

Figure 7: Performance on Revenue and Grants, (K000)--------------------------------------------------------------37

Figure 8: Broad Expenditure Categories-----------------------------------------------------------------------------------42

Figure 9: Annual Broad Money Growth, January 2010-December 2013 ------------------------------------------45

Figure 10: Annual Inflation, January 2012-December 2013 ----------------------------------------------------------47

Figure 11: Treasury Bills Yield Rates (percent per annum), 2011-2013 -------------------------------------------48Figure 12: Government Bond Yield Rates (percent per annum), 2011-2013 -------------------------------------49

Figure 13: Lending and Saving, January 2010-December 2013-----------------------------------------------------49

Figure 14: Real Interest Rates, January 2010-December 2013 -----------------------------------------------------50

Figure 15: Kwacha Exchange Rate Levels against Major Foreign Currencies, 2012-2013 -------------------51

Figure 16: Indicators of LuSE Activity, 2013 ------------------------------------------------------------------------------54

Figure 17: Export Earnings, 2011-2013 in US $Million-----------------------------------------------------------------58


13/86


14/86

2013 ANNUAL ECONOMIC REPORT

xiii

EXECUTIVE SUMMARY

The 2013 Annual Economic Report reviews the broad economic and social developments in the Zambian

economy. The first part of the report analyses the developments in the global economy and assessestheir impact on the Zambian economy. The second part discusses the domestic economic performance

and prospects for 2014.

DEVELOPMENTS IN THE GLOBAL ECONOMY

Global economic developments in 2013 remained positive with world output at 3.0 percent, albeit at a

lower rate compared to 3.1 percent in 2012. The slowdown was largely explained by the continued

financial fragility in the Euro Area and deceleration in the advanced economies, particularly the United

States of America (USA). However, growth in Asia and the Sub-Saharan economies remained strong.

DEVELOPMENTS IN THE DOMESTIC ECONOMY

In 2013, real Gross Domestic Product (GDP) growth continued to be positive with preliminary figures

indicating a growth rate of 6.4 percent. This was lower than the 7.3 percent growth recorded in

2012mainly on account of a decline in the agriculture output as well as a slowdown in the manufacturing

and construction sectors.

During the 2012/2013 farming season, output for the major food and cash crops declined despite an

increase in area planted. The decline in yields was due to army worm infestation and poor rainfall

performance in the early part of the season. Despite the agriculture sector recording a decline in the

production of the major food crops, there was an increase in the overall food surplus to 896,677 Mt, in

2013 as a result of carryover stocks from the previous year.

The mining sector performance was favourable on account of increased copper production of 790,007 Mt

compared to 785,642 Mt in 2012. Copper output by large mines increased by 12.3 percent to 783,468 Mt

from 697,918 Mt in 2012. This was on account of the coming on stream of Lubambe Mine which

produced 22,135 Mt and increased output at existing mines.

The performance of the transport and communications sector was satisfactory on account of positive

performance in the road transport, air transport, and the communications sub-sectors. In the air transport

both aircraft and passenger movements increased due to commencement of new flights and increased

frequencies of fights. The communication sub-sector performed well on account of increased mobile

phone and internet usage.


15/86

xiv

In the road sector, passengers transported increased by 25.3 percent to 68,294,420 from 54,521,875

passengers in 2012. Similarly, the motor vehicle population increased by 1.1 percent to 534,523

compared to 528,584 in 2012. In the rail sector, cargo transported increased by 23.2 percent to 1,014,216

from 823,517 in 2012. Passengers transported by rail, however, reduced on account of a reduction in

numbers transported by Tanzania-Zambia Railways.

SOCIAL SECTOR DEVELOPMENTS

The performance of the education sector was satisfactory on account of increased net enrolments in

secondary schools, TEVET institutions and university coupled with an improvement in pupil-teacher ratio

at primary school level. In addition, there was expansion of infrastructure at primary, secondary and

university levels. The number of schools offering primary education increased by 5.3 percent to 8,801 in

2013 from 8,359 in 2012. At secondary school level, the number of schools increased by 3.9 percent to

690 from 664 in 2012.

In the health sector, performance was satisfactory, reflected in the reduced incidence rate in seven of the

top ten diseases. This was on account of improved delivery of health care services and the sufficient

supply of drugs and medical equipment. Deterioration in the child and maternal health indicators were,

however, observed as the first antenatal coverage and the percentage of deliveries by institutional, skilled

personnel and traditional birth attendants reduced.

BUDGET PERFORMANCE

Budget performance during the year was not in line with the projections. Total revenue and grants

amounted to K25.6 billion against a target of K26.3 billion. Total expenditures amounted to K33.8 billion

compared to the target of K31.2 billion. This resulted into an overall deficit of K8.2 billion or 6.8 percent of

GDP.

DOMESTIC DEBT

The domestic debt stock increased by 31.0 percent to K19,744.57 million in 2013 from K15,072.84 million

in 2012. This was mainly attributed to an increase in the stock of Government Securities at 31.5 percent

to K18,882.00 million from K14,357.70 million in 2012, to meet funding requirements for higher than

programmed domestic financing.


16/86


xv

MONETARY AND FINANCIAL SECTOR DEVELOPMENTS

For the fifth consecutive year, end-year inflation was maintained in single digits at 7.1 percent as at end

2013 compared with 7.3 percent recorded in December, 2012, although higher than the end year target of

6.0 percent.

In the foreign exchange market, the Kwacha depreciated against the US dollar, Pound Sterling and Euro,

while posting an appreciation against the Rand. Firm domestic demand due to high Kwacha liquidity,

market participants position-taking ahead of Statutory Instrument No. 55 implementation and

developments in the Euro Area, China and USA contributed to the observed weakness in the Kwacha.

The Kwacha, however, appreciated against the Rand due to exposure of the South African economy to

the fragility in the Euro Area.

The overall financial performance and condition of the banking sector was rated satisfactory. The sectorrecorded improvements in the capital adequacy position, asset quality and liquidity position, while the

earnings performance remained satisfactory. Similarly, the performance of the Non-Bank Financial

Institutions (NBFIs) was satisfactory.

EXTERNAL SECTOR DEVELOPMENTS

In the external sector, the current account surplus narrowed while the capital and financial account deficit

widened. As a consequence, the overall Balance of Payments recorded a deficit in 2013 compared with a

surplus in 2012. In line with these developments, there was a decline in Gross International Reserves

which translated into lower months of import cover.


17/86


18/86

1

Part I

DEVELOPMENTS IN THE GLOBAL ECONOMY


19/86


20/86


3

1 0 DEVELOPMENTS IN THE GLOBAL ECONOMY

1.1. OVERVIEW

World economic output in 2013 continued to be positive albeit slower than in 2012. Real Gross Domestic

Product (GDP) was 3.0 percent, down by 0.1 percentage points from 3.1 percent in 2012. Developing

Asia and Sub-Saharan Africa were the main drivers of growth. Growth in the advanced economies

however, decelerated largely on account of the slowdown in the United States of America (USA) and the

recession in the Euro Area (see Table 1).

Despite the slowdown in global output, the volume of world trade remained at the 2012 growth rate of 2.7

percent. Inflation was low in advanced economies, while the emerging and developing economies

experienced inflationary pressures mainly on account of rising food prices.

Table 1: Overview of the World Economic Outlook, 2011-2013

2011 2012 2013

World Output 3.9 3.1 3.0

Advanced Economies 1.6 1.4 1.3

United States 1.8 2.8 1.9

Euro Area 1.4 (0.7) (0.4)

Germany 3.1 0.9 0.5

France 1.7 0.0 0.2

Italy 0.4 (2.5) (1.8)

Spain 0.4 (1.6) (1.2)

Japan (0.6) 1.4 1.7

United Kingdom 0.9 0.3 1.7

Canada 2.6 1.7 1.7

Other Advanced Economies 3.3 1.9 2.2

Emerging Market and Developing Countries 6.3 4.9 4.7

Central and Eastern Europe 5.3 1.4 2.5

Commonwealth of Independent States 4.9 3.4 2.1

Russia 4.3 3.4 1.5

Excluding Russia 6.2 3.3 3.5

Developing Asia 8.0 6.4 6.5

China 9.3 7.7 7.7

India 7.9 3.2 4.4

ASEAN-5 4.5 6.2 5.0

Latin America and the Caribbean 4.5 3.0 2.6

Brazil 2.7 1.0 2.3

Mexico 3.9 3.7 1.2

Middle East and North Africa 3.5 4.1 2.4

Sub-Saharan Africa 5.3 4.8 5.1

South Africa 3.5 2.5 1.8

Memorandum

World growth based on market exchange rates 2.9 2.5 2.4


21/86

4

2011 2012 2013

World trade volume (goods and services) 5.9 2.7 2.7

Imports (goods and services)

Advanced economies 4.6 1.0 1.4

Emerging market and developing countries 8.4 5.7 5.3

Commodity prices (US dollars)

Oil* 31.6 1.0 (0.9)Non-fuel (average based on world commodity export weights) 17.8 (10.0) (1.5)

Consumer prices

Advanced economies 2.7 2.0 1.4

Emerging market and developing countries 7.1 6.0 6.1

London interbank offered rate (percent)

On U.S Dollar Deposits (6 month) 0.5 0.7 0.4

On Euro Deposit (3 month) 1.4 0.6 0.2

On Japanese Yen Deposits (6 month) 0.3 0.3 0.3

Source: IMF, World Economic Outlook, January 2014(Percent change unless noted otherwise)

*Simple average of prices of U.K. Brent, Dubai Fateh, and West Texas Intermediate crude oil. The average price of oil in U.S. dollars a barrel was $104.11 in 2013; the

assumed price based on futures markets i s $103.84 in 2014 and $98.47 in 2015.

1.2. DEVELOPMENTS IN ADVANCED ECONOMIES

Growth in advanced economies decelerated to 1.3 percent in 2013 from 1.4 percent in 2012. This was

mainly on account of negative growth in the Euro Area. Real GDP growth in the Euro Area was negative

0.4 percent compared to negative 0.7 percent in 2012, largely attributed to production cutbacks in the

periphery economies emanating from tight financial and fiscal conditions. Output for Japan and the United

Kingdom, however, increased to 1.7 percent from 1.4 percent and 0.3 percent in 2012, respectively.

1.3. DEVELOPMENTS IN EMERGING AND DEVELOPING ECONOMIES

Growth in the emerging and developing economies slowed down by 0.2 percentage points to 4.7 percent

from 4.9 percent in 2012. This was partly explained by the fragility in the financial system, weaker

demand from advanced economies and domestic factors.

Growth in developing Asia strengthened to 6.5 percent from 6.4 percent in 2012 largely due to increased

output in India arising from favourable weather conditions and increased exports. Growth in China

remained strong at 7.7 percent while India grew by 4.4 percent from 3.3 percent in 2012. Growth in the

ASEAN-5, however, declined to 5.0 percent from 6.2 percent in 2012.

In Sub-Saharan Africa, real GDP growth remained robust at 5.1 percent in 2013 compared to 4.8 percent

in 2012. This was mainly on account of increased investments in infrastructure and trade and investment

ties with the emerging economies. The economic expansion was strong in oil exporters, although the

general trend was upward across the region. Nevertheless, growth in South Africa slowed down to 1.8

percent in 2013 from 2.5 percent in 2012. This was due to unexpected gradual tightening of the monetary


22/86


5

policy in the USA which led to high outflows of foreign capital which negatively impacted the refinancing

conditions for the private and public sector and the continued economic instability in the euro area.

1.4. COMMODITY PRICE DEVELOPMENTS

In the period under review, international oil prices marginally declined by 0.9 percent to US$104.11 per

barrel as at end 2013 compared to US$105.08 per barrel as at end 2012.The decrease was partly on

account of reduced consumption of the commodity by India, China and the USA. However, non-fuel

commodity prices averaged negative 1.5 percent compared to negative 10.0 percent in 2012.

Notwithstanding the rise in non-fuel commodity prices, the realised average copper price marginally

declined to US$7,073.82 per tonne from US$7,135.84 per tonne in 2012.

1.5. IMPACT OF GLOBAL DEVELOPMENTS ON THE ZAMBIAN ECONOMY

Global economic developments impacted negatively on the performance of the domestic economy. The

economic difficulties in the Euro Area coupled with uncertainties associated with tapering in the USA had

a negative impact on capital and financial flows to the country. This resulted in a balance of payment

deficit which consequently affected the exchange rate.


23/86


24/86

7

Part II

DEVELOPMENTS IN THE DOMESTIC ECONOMY


25/86


26/86


9

2 0 REAL SECTOR DEVELOPMENTS

2.1. OVERVIEW

Preliminary data indicates that the performance of the economy was favourable in 2013 with a real GDP

growth of 6.4 percent. This was however lower than the 7.3 percent growth in 2012. The slowdown in

output was mainly on account of a decline in output in the primary sector as well as a slowdown in the

secondary sector. However, the tertiary sector registered an increase in output (see Annex II, III and IV).

2.2. AGRICULTURE, FORESTRY AND FISHING

Growth in the agriculture, forestry and fishing sector slowed down to negative 7.4 percent in 2013 from

6.8 percent in 2012. This was on account of a decline in the agriculture and fishing sub-sectors by

negative 15.4 percent and negative 2.0 percent, respectively. The forestry sub-sector maintained growth

of 3.7 percent. Notwithstanding the negative growth in the agriculture sub-sector, the country was able to

maintain food security and sufficient stocks to meet industrial requirements.

2.2.1. Crop Production

During the 2012/2013 farming season, output for major food and cash crops declined despite an increase

in area planted (see Table 2). The decline was mainly due to poor rainfall performance and infestation of

army worms during the early part of the season.

Table 2: Area Planted, Yield and Crop Production, 2012/2013 season

Crop Area planted (ha) Yield (MT/ha) Expected Production

2011/2012 2012/2013% Change

2013/20122011/2012 2012/2013

% Change

2013/20122011/2012 2012/2013

% Change

2013/2012

Maize 1 274 983 1 312 402 2.93 2.24 1.93 (13.74) 2 852 687 2 532 800 (11.21)

Sorghum 18 685 23 112 23.69 0.82 0.65 (21.03) 15 379 14 971 (2.65

Rice 31 388 38 520 22.72 1.44 1.16 (19.66) 45 321 44 747 (1.27)

Millet 35 828 33 834 (5.57) 0.79 0.71 (10.57) 28 446 23 942 (15.83)

Sunflower 40 870 66 515 62.75 0.5 0.51 1.83 20 468 33 733 64.81

Groundnuts 184 397 207 249 12.39 0.61 0.52 (15.16) 113 026 106 792 (5.52)

Soya-beans 86 223 124 858 44.81 2.35 2.09 (11.25) 203 038 261 063 28.58

Cotton 314 497 172 160 (45.26) 0.86 0.81 (5.48) 269 502 139 583 (48.21)

Wheat 37 230 41 810 12.3 6.81 6.54 (3.96) 253 522 273 584 7.91

Virginia Tobacco 10 725 11 348 5.81 2.26 1.87 (17.30) 24 250 21 195 (12.6)

Burley Tobacco 3 161 7 091 124.35 2.24 1.23 (44.99) 7 067 8 704 23.16

Sweet Potatoes 42 847 48 454 13.09 3.82 3.89 1.95 163 484 188 355 15.21

Paprika 680 418 (38.57) 1.42 1.45 2.28 965 605 (37.28)

Source: Ministry of Agriculture and Livestock


27/86

10

In terms of crop production, maize and cotton which accounted for 66.8 percent of area planted declined.

Total maize production declined by 11.2 percent to 2,532,800 Mt in the 2012/2013 season from 2,852,687

Mt in the 2011/2012 season. Cotton production also declined by 48.2 percent to 139,583 Mt from 269,502

Mt in the previous season. Notwithstanding the poor performance of maize and cotton, a number of cash

crops such as soya beans, sunflower, wheat and burley tobacco registered increased production.

The yield rates for eleven of the top eighteen crops declined due to the outbreak of army worms at the

time of planting and lower than normal rainfall in the southern half of the country. The average yield rate

for maize declined by 13.7 percent to 1.94 Mt/Ha in the 2012/2013 season from 2.24 Mt/Ha in the

2011/2012 season while cotton declined by 48.2 percent to 0.81 Mt/Ha in the 2012/2013 season from

0.86 Mt/Ha in 2011/2012 season. Other crops that registered a decline in yield rates included wheat, rice

and virginia tobacco. Yield rates for sunflower, paprika and sweet potatoes, however, increased (see

Table 2).

2.2.2. National Food Balance Sheet

The overall food surplus increased to 896,677 Mt in 2012/2013 from 413,064 Mt in 2011/2012 marketing

season, despite the agriculture sub-sector recording a decline in the production of the major food crops.

This was on account of surplus production in the key food crops such as cassava and wheat, and

sufficient carry-over stocks for maize (see Table 3).

Table 3: Zambia National Food Balance Sheet for the 2013/2014 Marketing Year

Maize Paddy Rice Wheat Sorghum/millet

Sweet/ Irishpotatoes

Cassava Flour

Total

(Maize mealie meal

equivalent)

Availability

(i) Opening stocks (1st May 2013) 455,221 2,737 168,255 6,036 0 0 629,556

(ii) Total production (2012/13) 2,532,800 44,747 273,584 38,914 210,392 1,114,583 3,984,553

Total availability 2,988,021 47,484 441,839 44,950 210,392 1,114,583 4,614,109

Requirements:

(i) Staple food requirements

Human Consumption 1,429,739 55,769 281,321 40,540 199,872 721,901 2,533,816

Food Reserve Stocks (net) 500,000 0 0 0 0 0 500,000

(ii) Industrial requirements

Stock feed 223,300 0 0 0 0 0 223,300

Breweries 100,000 0 0 0 0 0 100,000

Grain retained for other uses 34,347 4,478 0 2,464 0 0 41,088

(iii) Losses 126,640 2,237 13,679 1,946 10,520 55,729 199,228

(iv) Structural cross-border trade 120,000 120,000

Total Requirements 2,534,026 62,484 295,000 44,950 210,392 777,630 3,717,432

C. Surplus/deficit (A-B) 453,995 (15,000) 146,839 0 0 336,953 896,677

D. Potential Commercial exports (453,995) 15,000 (146,839) 0 0 0 0

E. Food aid import requirements 0 0 0 0 0 0 0



28/86


11

2.2.3. Livestock

Livestock production posted a positive improvement in 2013 compared to 2012. This was on account of

improved livestock infrastructure development, increased artificial insemination, livestock disease control

and prevention and improved breeding methods at the livestock breeding centres.

Goat production increased by 172.0 percent to 3.0 million in 2013 from 1.1 million in 2012. Similarly,

sheep production rose by 36.0 percent to 816,397 from 600,835 in 2012. This was an indication that

farmers were adopting goat and sheep farming in addition to the traditional cattle rearing. Production of

cattle, poultry and pigs also increased by 9.0 percent, 14 percent, and 13 percent, respectively (see Table

4).

Table 4: Livestock Estimates, 2012-2013

Species 2012 2013 % Change 2013/2012

Cattle 3,603,452 3,932,269 9.0

Goats 1,112,503 3,023,585 172.0

Pigs 1,347,437 1,517,492 13.0

Poultry 98,587,625 112,791,669 14.0

Sheep 600,835 816,397 36.0


Milk production increased by 19.0 percent to 5.8 million litres from 4.9 million litres in 2012 (see Table 5).

This was on account of increased dairy farmers coupled with the opening up of more milk collection

centres and the cattle restocking exercise.

Table 5: Milk Production Estimates in Litres, 2011-2013

Year 2011 2012 2013 % Change 2013/2012

Milk production 3,417,167 4,902,723 5,833,771 19.0


In 2013, livestock slaughter increased substantially except for pigs which registered a decline (see Table

6). The decline in pigs slaughtered was on account of the outbreak of the swine fever disease which

affected Lusaka province resulting in the ban of movements of pigs into and out of Lusaka.

Table 6: Livestock Slaughters, 2012-2013

Species 2012 2013 % Change 2013/2012

Cattle 1,217,490 1,923,517 58.0

Goats 80,744 201,324 149.0

Pigs 189,892 113,343 (40.0)

Poultry 24,840,000 53,649,839 116.0

Sheep 9,954 10,538 6.0



29/86

12

2.2.4. Fisheries

During the review period, fish production at selected fishery areas reduced by 16.9 percent to 29,657

tonnes from 35,688 tonnes in 2012 (see Table 7). This was partly on account of continued depletion of

fish stock attributable to poor fishing methods.

Table 7: Production of Fish by Selected Fishery Area (tonnes), 2011-2013

Fishery 2011 2012 2013 % Change 2013/2012

Tanganyika 15,953 16,341 10,310 (36.9)

Kariba 9,454 16,261 16,341 19.43

Lukanga 1,007 3,086 3,545 14.87

Total 26,414 35,688 29,657 (16.9)

Source; Ministry of Agriculture and Livestock

Aquaculture production, however, increased by 56.1 percent to 20,271 tonnes from 12,988 tonnes in

2012 (see Table 8). This was largely on account of increased activities in cage aquaculture and comingon stream of Yalelo Fisheries based on Lake Kariba and Bangweulu, and Mpende Fisheries based on

Lake Tanganyika in the aquaculture industry.

Table 8: Aquaculture Production of Fish (tonnes) by Released Species, 2011-2013

Year 2011 2012 2013 % Change 2013/2012

Total 10,291 12,988 20,271 56.07


Fish exports increased by 174.0 percent to 137 Mt from 50 Mt in 2012. This was largely on account of

increased demand for Nile perch in East and West Africa. In addition, Kapenta and Clarius species wereexported to Democratic Republic of Congo (DRC), Namibia and South Africa.

Imports increased by 82.4 percent to 28,666 Mt compared to 15,720 Mt in 2012 on account of increased

demand for fish in the country. The main sources of imports were Zimbabwe, Mozambique, Malawi,

Namibia, China, Hong Kong, Korea Republic and Thailand.

Table 9: Exports and Import of Fish in Mt, 2011-2013

Exports of Fish Imports of Fish

Year 2011 2012 2013 % Change 2013/2012 Year 2011 2012 2013 % Change 2013/2012

Exports (MT) 155 50 137 174 Imports (MT) 16,077.53 15,720 28,666 82.4

Source; Ministry of Agriculture and Livestock


30/86


13

2.3. MINING

Output in the mining and quarrying sector increased by 5.9 percent in 2013 compared to negative 2.7

percent in 2012. This was due to an increase in mineral production at the major mines and the coming on

stream of a new mine. In an effort to improve compliance, Government continued to implement Statutory

Instrument No.34 of 2012, which made it mandatory for mining rights holders to submit detailed annual

reports and programmes of operation for the subsequent years.

Total Copper production marginally increased by 0.6 percent to 790,007 Mt from 785,642 Mt in 2012.The

outturn was attributed to 12.3 percent increase in copper output to783,468 Mt from 697,918 Mt in 2012by

large mines (see Figure 1). The coming on stream of Lubambe Mine which produced 22,135 Mt

representing 22.7 percent and a significant increase in output at Kansanshi, Lumwana Mine, Mopani

Copper Mine and China Non-Ferrous Mining Corporation (CNMC) contributed to the positive sector

performance.

Figure 1: Copper Production for Large Mines (Mt), 2012-2013

Source: Ministry of Mines, Energy and Water Development

Gold output increased by 126 percent to 4,984 Kg from 2,199.1 Kg in 2012. Coal production at Maamba

Collieries also increased to 148,768 Mt from 121,024 Mt in 2012.

697,918

783,468

640,000

660,000

680,000

700,000

720,000

740,000

760,000

780,000

800,000

2012 2013

2012 2013


31/86

14

2.4. MANUFACTURING

Growth in the manufacturing sector based on the third quarter Index of Industrial Production, was positive

at 3.2 percent which was lower than the 8.5 percent registered in 2012. Growth was largely driven by the

textile, clothing and leather, paper and paper products, chemicals, rubbers, and plastics, non-metallic

mineral products, basic metal industries, and the food, beverages and tobacco sub-sectors (see Table

10).

The food, beverages and tobacco subsector which constitutes the largest share of the manufacturing

sector grew at a slower rate of 4.5 percent in 2013 compared to 8.5 percent in 2012, partly on account of

a slowdown in the agriculture sector. Growth for the fabricated metal products and wood and wood

products sub-sectors was negative, amidst increased economic activities particularly in the construction

industry.

Table 10: Index of Industrial Production, 2012-2013

Period

Manufacturing

Total Manufacturing

Food,

Beverages &

Tobacco

Textile,

Clothing &

Leather

Wood &

Wood

Products

Paper &

Paper

Products

Chemicals,

Rubbers &

Plastics

Non-

metallic

Mineral

Products

Basic Metal

Industries

Fabricated

Metal

Products

Weight 0.511 0.235 0.060 0.006 0.017 0.059 0.025 0.009 0.100

2011 10.6 9.3 (54.7) 6.1 18.4 7.2 25.0 (0.9) 16.6

2012 Q1 18.6 21.6 (7.7) 5.6 16.9 12.9 31.7 4.6 11.8

2012 Q2 5.8 4.7 (13.7) 2.0 15.5 12.7 5.6 19.0 4.4

2012 Q3 3.3 4.0 5.9 6.2 19.1 7.3 1.9 14.9 (3.3)

2012 Q1 to Q3 8.5 8.8 (6.8) 4.4 17.1 11.4 11.2 12.9 2.8

2012 Q4 0.0 3.1 69.9 3.7 6.5 5.9 0.7 18.3 (19.3)

2012 6.0 7.1 3.5 4.2 14.1 10.1 8.1 13.9 (3.7)

2013 Q1 3.7 3.2 21.8 (5.3) 18.0 8.0 2.6 7.2 (3.3)

2013 Q2 1.1 3.3 18.6 (0.3) 3.6 9.2 2.1 4.7 (16.6)

2013 Q3 4.9 6.6 6.1 0.3 1.2 19.3 5.0 5.2 (6.0)

2013 Q1 to Q3 3.2 4.5 18.4 (1.9) 7.7 11.2 3.3 5.6 (8.5)

Source: Central Statistics Office


32/86


15

2.5. ENERGY

In 2013, the energy sector grew by 5.9 percent compared to a growth of 4.1 percent in 2012. This was

attributed to increased electricity generation and reliability in the supply of petroleum products.

2.5.1 Electricity Sub-Sector

Electricity Generation and Consumption

Electricity generation increased by 6.4 percent to 13,782,035Mwh from 12,954,051Mwh in 2012 (see

Table 11). This was on account of increased electricity generation at major hydro power stations and

coming on stream of 180Mw from the Kariba North Bank Extension Project. Electricity generation at

diesel power stations, however, declined due to the connection of Kaputa to the national grid. Similarly,

generation at mini-hydro power stations was affected by the ongoing rehabilitation and upgrading of some

stations.

Table 11: Electricity Generation, 2012-2013

2012 2013 % Change 2013/2012

Diesel 18,899 16,789 (11.2)

Mini hydro 105,462 97,636 (7.4)

Major hydro 12,426,815 13,263,634 6.7

Lunsemfwa 402,875 403,976 0.3

Total 12,954,051 13,782,035 6.4

Source: Zesco Limited

Electricity consumption increased by 5.1 percent to 10,845,651 Kwh from 10,317,408 Kwh in 2012. The

construction, mining (quarries) and transport sectors registered increases in electricity consumption of

38.2 percent, 83.1 percent and 19.6 percent, respectively. This was explained by high demand for power

to support increased economic activities. Consumption in the manufacturing and trade sectors, however,

declined (see Table 12). In terms of shares, the mining sector continued to consume the largest

proportion at 54.7 percent followed by the services sector at 31.0 percent.

Table 12: Electricity Consumption by Sector (Million Kwh), 2012-2013

2012 2013 % Change 2013/2012 Share of Consumption by Sector %

Agriculture 244,456 270,302 10.6 2.5

Construction 12,697 17,545 38.2 0.2

Energy and water 81,768 71,011 (13.2) 0.7

Finance and property 433,987 499,744 15.2 4.6

Manufacturing 505,991 397,067 (21.5) 3.7

Mining 5,554,379 5,929,125 6.7 54.7

Mining (quarries) 19,104 34,979 83.1 0.3

Others 117,508 120,928 2.9 1.1

Services 3,187,159 3,360,846 5.4 31.0

Trade 136,652 115,762 (15.3) 1.1


33/86

16

2012 2013 % Change 2013/2012 Share of Consumption by Sector %

Transport 23,702 28,342 19.6 0.3

Totals 10,317,403.00 10,845,651 5.1 100.0


Exports and Imports of Electricity

Export of electricity in 2013increased by 10.6 percent to 1,083,434 Mwh from 979,715 Mwh in 2012 on

account of increased generation. Consistent with increased generation, imports declined by 55.4 percent

to 72,952 Mwh from 163,730Mwh in 2012.

Figure 2: Export and Imports of Electricity, 2012-2013


2.5.2 Petroleum

In the year under review, the supply of petroleum products continued to be influenced by crude oil prices

on the international market and the exposure to exchange rate fluctuations. A total of 518,013 Mt of feed

stock was imported compared to 642,683 Mt in 2012. On the demand side, a significant increase in

consumption was recorded in Liquidified Petroleum Gas (LPG) while a decrease was registered in

consumption of Heavy Fuel oil and Kerosene (see Table 13).

979,7

15

1,0

83,4

34

163,730

72,952

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2012 2013

Exports Imports


34/86


17

Table 13: National Consumption of Petroleum Products, 2011-2013

Product (Unit of Measure) 2011 2012 2013 % Change 2013/2012

Diesel (Litres) 679,806,991.20 795,007,150.42 795,385,489.00 0.1

Petrol (Litres) 242,830,715.29 312,298,963.87 367,471,807.82 17.7

Jet-A1 (Litres) 40,741,338.00 61,846,040.00 6,016,080.00 0.3

Kerosene (Litres) 24,872,286.07 18,336,473.57 15,438,344.61 (15.8)

Heavy Fuel Oils (Kilogram) 49,461,237.04 60,222,381.00 50,793,370.00 (15.7

LPG (Kilograms) 2,424,127.43 657,622.40 3,021,486.29 359.5

Source: Energy Regulation Board

Domestic prices of petroleum products increased following the removal of the 5.0 percent import duty on

petroleum feedstock and application of the strategic reserves fund cost-line of K0.15/litre for all petroleum

products. The pump prices of petrol increased by 21.4 percent to K9.91/litre, 21.5 percent for diesel to

K9.20/litre and 32.6 percent for kerosene to K6.83/litre, respectively. At regional level, prices of petrol and

diesel remained higher in Zambia relative to most countries within the sub-region except for Malawi which

had a higher price of petrol (see Figure 3).

Figure 3: Comparison of Regional Prices for Petrol and Diesel (US$ per litre)

Source: Energy Regulation Board

1.85

1.73

1.39 1.42

1.30 1.30

0.93

1.50

1.60

1.07

1.28

1.10

0.72 0.72

-

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.00

Malawi Zambia South Africa Uganda Kenya Tanzania Mozambique

Price of Petrol (US$) Price of Diesel (US$)


35/86

18

2.6. TOURISM

The tourism sector in 2013 grew by 2.2 percent compared to negative growth of 2.6percent registered in

2012. Growth was partly due to an increase in tourist arrivals boosted by the hosting of the 20th Session

of the United Nations World Tourism Organization (UNWTO) General Assembly. The sector also

recorded an increase in employment by 82.1 percent to 44,292 from 24,318 in 2012 partly on account of

enhanced investments in the hospitality industry triggered by the co-hosting of the UNWTO.

2.6.1. Tourist Arrivals

Tourist arrivals in 2013 increased by 6.5 percent to 914,576 from 859,088 in 2012.The majority of tourists

originated from within Africa followed by Europe (see Table 14).

Table 14: International Tourists Arrivals by Country of Origin, 2011-2013

Country of Origin 2011 2012 2013 % Change 2013/2012

Africa 652,276 654,114 720,467 10.14

Europe 113,831 65,826 78,543 19.3

North America 45.537 29,344 37,397 27.4

South America 6,131 2,215 3773 70.3

Asia & Pacific 102,524 107,589 74,396 (30.9)

Total 920,299 859,088 914,576 6.5

Source: Ministry of Tourism and Arts

2.6.2. Bed and Room Occupancy Rates

Consistent with the increase in tourist arrivals, room and bed occupancy rates rose by 73.0 percent and

79.0 percent from 69.0 percent and 72 percent registered in 2012, respectively (see Table 15).

Table 15: Employment, Room and Bed Occupancy Rates, 2011-2013

Description 2011 2012 2013

Number of Rooms 32,243 66,961 73,991

Number of Beds 56,681 93,722 124,982

Room Occupancy Rates 52% 69 % 73%

Bed Occupancy Rates 68% 72% 79%

Employment 24,318 44,292 57,337

Source: Ministry of Tourism and Arts

2.6.3. Tourist visits to National Parks

Tourist visits to major national parks also rose by 30.6 percent to 77,282 from 59,196 in 2012 (see Table

16). South Luangwa National Park continued to account for the largest share of the total visits at 53.0

percent largely due to improved access roads and the availability of the big five wild species of the world.


36/86


19

Table 16: Tourist Arrivals at Major National Parks, 2012-2013

National Park 2012 2013 Share of Total Visits % Change 2013/2012

Kafue 5,414 9,085 11.8 67.81

Lower Zambezi 6,730 9,371 12.1 39.24

Mosi-oa-Tunya 13,433 17,883 23.1 33.13

South Luangwa 33,619 40,943 53.0 21.79

Total 59,196 77,282 100.0 30.55Source: Zambia Wildlife Authority

In terms of origin, the majority of tourists that visited the national parks were from Europe accounting for

35.3 percent while 25.7 percent local tourist (see Table 17).

Table 17: Tourists Visits to National Parks by Area of Origin, 2012-2013

Region 2012 2013 Share of Total

USA 9,411 12,967 16.8

Europe 20,292 27,254 35.3

Asian Pacific 4,029 5,851 7.6

South America 1,905 1,110 1.4

Zambia 15,897 19,862 25.7

Other African Countries 6,168 10,238 13.2

Total 57,707 77,282 100.0

Source: Zambia Wildlife Authority

In the year under review, the safari hunting ban continued in a bid to preserve wildlife and facilitate the

conducting of a wildlife census. In this regard, revenue collection from hunting blocks declined to

K1,883,956 million from K21,774,992.55 million (see Table18).

Table 18: Hunting Blocks and Unfenced Private Wildlife EstatesNo. Safari operate Hunting block Revenue

1 MVU Safaris Mufunta 139,498.00

2 BIMM Safaris Luembe 289,080.00

3 Alfa Recreation Sichifulo 118,430.40

4 Royal Zambezi Chiawa -

5 Muchinga Adventure Tondwa 174,979.20

6 Miyombo Safaris East Musalangu 20,961.60

7 Busanga Trails Mukungula 46,886.40

8 Nyampala Safaris Rufusa 116,424.00

9 Sable Transport Chisomo -

10 Nyamvu Safaris Nyamvu Safaris 143,668.80

11 Mushingashi Game Ranch Mushingashi Game Ranch 365,164.80

12 Nyakolwe Game Ranch Nyakolwe Game Ranch 263,947.20

13 Munyamadzi Munyamadzi 108,292.00

14 Kaindu Natural Resource Trust Kaindu Natural Resource Trust 96,624.00

Total 1,883,956.00

Source: Zambia Wildlife Authority


37/86

20

2.7. TRANSPORT AND COMMUNICATIONS

The Transport, Storage and Communications sector grew by 12.4 percent compared to 12.8 percent in

2012. This outturn was on account of positive performance in the road transport, air transport, and the

communications sub-sectors.

2.7.1. Air Transport

Passenger movements at the four international airports, Kenneth Kaunda International Airport (KKIA),

Simon Mwansa Kapwepwe International Airport(SMKIA), Harry Mwaanga Nkumbula International

Airport(HMNIA) and Mfuwe International Airport (MFW) increased by 13.3 percent to 1,543,144

passengers from 1,362,113 in 2012. Domestic passengers accounted for 300,055 while 1,243,089 were

international, representing an increase of 21.2 percent and 11.5 percent, respectively (see Table 19). The

positive performance was due to introduction of new flights by Ethiopian Airlines and Proflight Zambia.The performance was further enhanced by increased flight frequencies by South African Airways, Kenya

Airways and Proflight Zambia.

Table 19: Passenger Performance at the Four Major Airports, 2012-2013

2012 2013 % Change 2013/2012

Domestic International Total Domestic International Total

KKIA 122,507 802,570 925,077 158,082 906,868 1,064,950 15

SMKIA 68,107 156,376 224,483 74,104 182,778 256,882 14

HMNIA 33,587 152,74 186,361 44,968 150,582 195,550 32

MFW 23,361 2,831 26,192 22,901 2,861 25,762 (2)

Total 247,562 1,114,551 1,362,113 300,055 1,243,089 1,543,144 13Source: National Airports Corporation

Aircraft movements increased by 2.7 percent to 66,238 from 64,476 in 2012 (see Table 20). This was

attributed to increase in demand by passenger leading to a rise in flight frequencies by various operators.

Cargo transported by air, also increased by 64.3 percent to 22,886 Mt from 6,986.4 Mt in 2012 on

account of introduction of KLM Airlines direct route for export of flowers to the Netherlands.

Table 20: Aircraft Movement, 2012-2013

2012 2013 % Change 2013/2012

Domestic International Total Domestic International Total Domestic International TotalKKIA 20,571 15,136 35,707 21,519 16,229 37,748 5.0 7.0 5.7

SMKIA 7,186 4,672 11,858 5,852 5,321 11,173 (19.0) 13.0 (5.8)

HMNIA 7,894 5,487 13,381 8,118 4,940 13,058 2,84 (10.0) (2.4)

MFW 2,538 992 3,530 2,841 1,418 4,259 12.0 43.0 20.7

Total 38,189 26,287 64,476 38,330 27,908 66,238 (2.0) 6.0 2.7

Source: National Airports Corporation


38/86


21

2.7.2. Road Transport

The road transport growth remained strong at 7.1 percent on account of an increase in the number of

passengers transported coupled with the upturn in the population of motor vehicles.

Passengers Transported

Passengers transported in 2013 increased by 25.3 percent to 68,294,420 from 54,521,875 passengers in

2012 (see Table 21). This was mainly as a result of efficiency and reliability in road transport and

consistent with increase in motor vehicle population particularly light passage vehicles.

Table 21: Number of Passengers Transported, 2011- 2013

2011 2012 2013 Share % Change 2013/2012

Taxi 1,467,300 2,200,950 2,934,600 4.3 33.3

Mini Bus 20,181,945 26,909,260 33,636,575 49.3 25.0

Midi Bus 11,141,260 16,711,890 22,282,520 32.6 33.3

Big Bus 7,013,475 8,699,775 9,440,725 13.8 8.5

Total 39,803,980 54,521,875 68,294,420 100 25.3

Source: Road Transport and Safety Agency

Motor Vehicle Population

In 2013, the motor vehicle population increased by 1.1 percent to 534,523 compared to 528,584 in 2012

(see Table 22). This was on account of an increase in all vehicle categories except the motor cycles

which declined by 81.5 percent. The light passenger vehicles continued to have the largest share at 61.7

percent followed by the light load vehicles at 18.0 percent.

Table 22: Population of Vehicles Registered, 2011- 2013

Vehicle Category 2011 2012 2013 Share % Change 2013/2012

Light Pass. Vehicle 236,830 265,835 329,932 61.7 24.1

Light Load Vehicle 72,899 89,675 96,201 18.0 7.3

Heavy Load Vehicle 44,765 64,978 67,922 12.7 4.5

Heavy Passenger Vehicle. 6,897 7,897 8,978 1.7 13.7

Motor Cycle 11,345 86,596 15,986 2.9 (81.5)

Tri-Cycle 245 621 982 0.2 58.1

Agriculture Tractor 1,768 2,897 3920 0.7 35.3

Agriculture. Trailer 245 320 498 0.1 55.6

Trailers 6,954 9,765 10,104 1.9 3.4

Total 381,948 528,584 534,523 100.00 1.1

Source: Road Transport and Safety Agency.


39/86

22

2.7.3. Railway Transport

The performance of the railway subsector was positive registering a growth rate of 24.2 percent largely

due to an increase in cargo transported. Cargo transported by rail increased by 23.2 percent to 1,014,216

Mt from 823,517 Mt in 2012 (see Table 23). The positive performance in cargo transported was attributed

to the on-going rehabilitation of the rail infrastructure and procurement of new wagons. Passengers

transported by rail, however, declined by 4.6 percent to 867,946 from 909,741 in 2012 largely on account

of a decline in passengers transported by Tanzania Zambia Railway (TAZARA).

Table 23: Passenger and Cargo Performance for TAZARA and ZRL, 2012-2013

Company Passengers transported Volume of cargo transported

2012 2013 % Change 2013/2012 2012 2013 % Change 2013/2012

ZRL/RSZ 192,608 247,062 28.3 594,050 749,165 26.1

TAZARA 717,133 620,884 (13.4) 229,467 265,051 15.5

Total 909,741 867,946 (4.6) 823,517 1,014,216 23.2

Source: Tanzania Zambia Railway and Zambia Railways Limited

2.7.4. Communications

The communications subsector registered a positive growth of 14.9 percent compared to 18.0 percent in

2012 mainly due to increased mobile traffic volumes and internet usage. There was, however, a reduction

in the mobile subscriber base.

Mobile Subscription

The mobile subscription base1 decreased by 1.2 percent to 10,395,801 from 10,542,676 in 2012 on

account of a decrease in mobile subscriber base of 3.8 percent and 14.7 percent for Airtel Zambia and

Zamtel, respectively. The MTN Zambia mobile subscriber base, however, increased by 7.5 percent partly

on account of improved quality of the network (see Table 24).

Table 24: Subscriber Base, 2012-2013

Operator 2012 2013 % Change 2013/2012

Airtel Zambia 4,725,705 4,544,218 (3.8)

MTN Zambia 4,074,386 4,380,828 7.5

Zamtel Mobile 1,724,585 1,470,755 (14.7)Total 10,524,676 10,395,801 (1.2)

Source: Zambia Information Communication and Technology Authority

1 This represents Active SIM Cards


40/86


23

Consistent with the reduction in the mobile subscriber base, prepaid subscription marginally decreased to

10,359,159 compared to 10,473,343 in 2012 while post-paid subscribers reduced to 45,642 from 51,333

in 2012 (see Figure 4 and 5).

Figure 4: Pre-paid Subscriptions, 2012-2013


Figure 5: Post-paid Subscription, 2012-2013


4,517,7624,363,709

1,468,688

4,702,130

4,047,228

1,723,985

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

Airtel MTN ZAMTEL

Prepaid 2013 Prepaid 2012

26,456

17,119

2,067

23,575

27,158

600

-

5,000

10,000

15,000

20,000

25,000

30,000

Airtel MTN ZAMTEL

2013 Postpaid 2012 Postpaid


41/86

24

In terms of the market share, Airtel Zambia continued to have the largest market at 44.0 percent followed

by MTN Zambia at 42.0 percent. The penetration rate, stood at 73.2 percent compared to 78.0 percent in

2012, attributed to the reduction in the number of subscribers and a rise in the population2.

Mobile Traffic Volumes

In 2013, incoming international minutes increased by 16.2 percent to 127,881,779 from 110,034,805 in

2012. Airtel Zambia and MTN Zambia registered increases of 20.5 percent and 18.7 percent,

respectively. International outgoing minutes, however, decreased by 19.6 percent to 88,443,381 from

110,034,805 in 2012 (see Table 25).

Table 25: Mobile International Incoming and Outgoing Minutes, 2012-2013

Operator In ternat ional Incoming Minutes % Change 2013/2012 In ternat ional Outgoing Minutes % Change 2013 /2012

2012 2013 2012 2013

Airtel Zambia 75,694,082 91,177,200 20.5 75,694,082 43,298,070 (42.8)

MTN Zambia 26,386,681 31,320,254 18.7 26,386,681 30,300,729 14.8

Zamtel Mobile 7,954,042 5,384,325 (32.3) 7,954,042 14,844,582 86.6

Total 110,034,805 127,881,779 16.2 110,034,805 88,443,381 (19.6)


Domestic outgoing minutes increased by 5.3 percent to 7,145,675,344 from 6,789,033,791 in 2012 driven

by Zamtel marketing strategies which led to an increase of 1,268.1 percent. Airtel Zambia and MTN

Zambia however registered declines of 21.0 percent and 7.8 percent, respectively (see Table 26).

Domestic incoming minutes decreased by 35.3 percent to 676,739,112 from 1,046,738,529 in 2012.

Table 26: Mobile Domestic Outgoing and Incoming minutes for MNOs, 2012-2013

Outgoing Minutes % Change 2013/2012 Incoming Minutes % Change 2013/2012

Operator 2012 2013 2012 2013

Airtel Zambia 3,942,771,412 3,115,639,800 (21.0) 798,381,673 429,743,330 (46.2)

MTN Zambia 2,736,063,912 2,522,384,452 (7.8) 221,106,728 215,909,781 (2.4)

Zamtel Mobile 110,198,467 1,507,651,092 1,268.1 27,250,128 31,086,001 14.1

Total 6,789,033,791 7,145,675,344 5.3 1,046,738,529 676,739,112 (35.3)


Internet Usage and Provision

Internet usage increased by 1.2 percent to 2,534,363 from 2,330,822 on account of an increase in both

fixed wireless and mobile subscription (see Table 27). Fixed wireless subscription increased by 8.78

percent to 17,231 from 15,839 while mobile internet increased by 1.2 percent in 2012.

2 This refers to the total national population


42/86


25

Internet penetration increased to 18.5 per 100 inhabitants in 2013 from 17.3 per 100 inhabitants in 2012.

This was on account of a rise in mobile cellular coverage of 79.4 percent coupled with the upgrade of

mobile networks by the three mobile network operators that enabled the provision of broadband internet

services in peri-urban and rural areas.

Table 27: Internet Usage, 2012-2013

Internet Usage Statistics 2012 2013

Internet Subscription fixed wireless 15,839 17,231

Internet users Per 100 Inhabitants 0.12 0.13

Mobile Internet Users - Smartphones/Dongos 2,314,983 2,517,132

Mobile Internet users Per 100 Inhabitants 17.2 18.4

Internet Usage fixed wireless & Mobile Internet Usage 2,330,822 2,534,363

Internet Usage Per 100 Inhabitants 17.3 18.5



43/86


44/86


27

3 0 SOCIAL SECTOR DEVELOPMENTS

3.1. EDUCATION

In 2013, the performance of the education sector was satisfactory on account of increased net enrolments

in secondary schools and improved pupil-teacher ratio at primary school level. In addition, the number of

primary and secondary schools increased.

3.1.1. General Education

The number of schools offering primary education increased by 5.3 percent, to 8,801 in 2013 from 8,359

in 2012. At secondary school level, the number of schools increased by 3.9 percent (see Table 28). The

increase was on account of school infrastructure development and upgrading of some primary schools to

secondary schools.

Table 28: Number of Schools, 2011-2013

Level of Education 2011 2012 2013 % Change 2013/2012

Primary 8,729 8,359 8,801 5.3

Secondary 631 664 690 3.9

Total 9,360 9,023 9491 5.2

Source: Ministry of Education, Science, Vocational Training and Early Education

3.1.2. Enrolments

The number of pupils enrolled at primary school level decreased by 1.9 percent at 3,075,161from

3,135,442 in 2012. This was attributed to the normalising of the age for primary school enrolments. Girl

enrolments stood at 1,534,380 or 49.9 percent of the total primary enrolments.

Enrolments at secondary school level increased marginally percent to 743,955 from 743,175 in 2012.

This outturn was partly attributed to the increase in the number of school places. The enrolment of

females stood at 348,007 or 46.8 percent of the total learners compared to the male learners at 53.2

percent. The lower female participation was mainly due to early marriages, pregnancies and social

perceptions that discriminate against the girl child.


45/86

28

3.1.3. Gender Parity

At primary school level, the Gender Parity Index (GPI) stood at 0.99 indicating that for every 100 male

pupils enrolled, 99 females were also enrolled. Similarly, GPI at secondary school level was biased

towards males recorded at 0.88 (see Table 29).

Table 29: Enrolments and Gender Parity, 2011-2013

Primary School Secondary School

Gender 2011 2012 2013 2011 2012 2013

Female 1,528,149 1,566,876 1,534,380 318,812 344,523 348,007

Male 1,506,280 1,568,566 1,540,781 377,289 395,168 399,472

Total 3,034,429 3,135,442 3,075,161 696,101 743,175 743,955

GPI 0.99 0.99 0.99 0.85 0.86 0.88


3.1.4. Pupil Teacher Ratio

The Pupil Teacher Ratio (PTR) at primary school level improved to 56.1 pupils per teacher from 58.8 in

2012 on account of the recruitment of teachers. At secondary school level, however, the PTR worsened

to an average of 48.0 pupils per teacher compared to 25.6 in 2012 for Grade 8 to 9. At Grade 10 to 12,

the PTR worsened to 36.9 from 36.0 in 2012 (see Table 30).

Table 30: Pupil - Teacher Ratio, 2011-2013

Education Level 2011 2012 2013

Grade 1-7 52.2 58.5 56.1

Grade 8-9 36.8 25.6 48.0

Grade 10-2 25.3 36.0 36.9


3.1.5. Tertiary Education

Technical Education, Vocational and Entrepreneurship Training

The number of registered institutions providing Technical Education, Vocational and Entrepreneurship

Training (TEVET)increased to 268 from 230 in 2012 (see Table 31). This was largely as a result of the

increase in private owned institutions.

In terms of proportions, public/government owned institution however accounted for the largest share of

registered institutions at 31 percent, followed by private and church institutions which accounted for 29.1

and 19.4 percent, respectively. Community/NGO institutions accounted for 9.3 percent of registered

institutions, while the rest accounted for 11.2 percent.


46/86


29

Table 31: Number of Registered Institutions by Ownership, 2012-2013

Ownership 2011 2012 2013 % Change 2013/2012

Public / Government 80 79 83 5.1

Private 107 54 78 44.4

Church 66 49 52 6.1

Community/ NGO 25 24 25 4.2

Trust 16 11 13 18.2

In-Company 80 13 17 30.8

Total 374 230 268 16.5

Source: Technical, Entrepreneurial and Vocational Education and Training Authority

Enrolment

The number of students in the TEVET institutions rose by 2.7 percent to 34,493 from 33,569 in 2012 with

all the programme categories registering increased enrolments (see Table 32). The increased enrolments

were partly due to the increased pass rate at Grade 12 in 2012. The business studies programme

continued to constitute the largest share of enrolments followed by Crafts programme.

Table 32: Student Enrolment by Programme and Gender, 2012-2013

2012 2013 % Change 2013/2012

Programmes Male Female Total Male Female Total

Business Studies 7,634 7,343 14,977 7,771 7,926 15,697 4.8

Secretarial Studies 4 1,637 1,641 6 1,675 1,681 2.4

Hotel and Tourism 1,284 2,305 3,589 1,308 2,351 3,659 2.0

Media and Applied Arts 1,157 2,283 3,440 1,192 2,329 3,521 2.4

Paramedical 183 207 390 186 210 396 1.5

Aviation 140 12 152 146 12 158 3.9

Craft Programmes 7,291 1,042 8,333 7,437 1,061 8,498 2.0

Advanced Certificate/ Technician Programmes 430 86 516 451 91 542 5.0

Diploma/Technologist Programmes 510 21 531 528 22 550 3.6

Total 18,633 14,936 33,569 19,026 15,467 34,493 2.8

Source: Technical, Entrepreneurial and Vocational Education and Training Authority

Teacher Education

Preliminary data indicates that total student enrolments at colleges of education increased by 2.2 percent

to 8,053 from 7,883 in 2012 (see Table 33). Male students accounted for the largest proportion of total

enrolments at 50.6 percent.


47/86

30

Table 33: College of Education Student Enrolments, 2011-2013

2011 2012 2013* % Change 2013/2012

Male 3,060 3,984 4,076 2.3

Female 2,720 3,899 3,977 2.0

Total 5,780 7,883 8,053 2.2


* Preliminary

University Education

In the year under review, Nkwame Nkhrumah, Copperbelt and Chalimbana Colleges of education were

upgraded into universities. This in part led to an increase in registered universities to 29 from 23 in 2012.

The University of Zambia and Copperbelt University continued to account for the largest share of total

enrolments3 (see Table 34).

Table 34: Public Universities Enrolments by Gender, 2012-20132012 2013 % Change 2013/2012

Male Female Total Male Female Total

University of Zambia 8,184 6,725 14,909 8,438 6,886 15,324 2.8

Copperbelt University 4,508 1,887 6,395 4,598 1,962 6,561 2.6

Mulungushi University 261 229 490 271 243 514 4.9

Total 12,953 8,841 21,794 13,307 9,092 22,399 2.8


3.2. HEALTH

During the year under review, the delivery of health care services improved as reflected in the reduced

incidence rate in seven of the top ten diseases (see Table 35). The availability of essential drugs and

other medical supplies remained satisfactory.

Table 35: Top ten (10) Causes of Morbidity for All Age Groups, 2012-2013

Disease Name

2012 2013 % Change

incidenceCases

(ALL ages)

Incidence

per 1,000 pop

Cases

(ALL ages)

Incidence

per 1,000 pop

Malaria 4,863,012 343.947 5,222,099 358.5 4.23

Respiratory Infection: non-pneumonia 4,632,797 327.664 5,226,362 358.8 9.50

Diarrhoea (non-bloody) 1,288,810 91.154 1283821 88.1 (3.35)

Muscular skeletal and connective tissue (not trauma) 918,384 64.955 918705 63.1 (2.86)

Digestive system: (not infectious) 591,540 41.838 612338 42 0.39

Trauma: Other Injuries, wounds 589,736 41.71 530515 36.4 (12.73)

Respiratory Infection: pneumonia 496,522 35.118 501612 34.4 (2.04)

Skin Diseases (not infectious) 392,104 27.732 349889 24 (13.46)

Eye diseases (infectious) 377,277 26.684 349236 24 (10.06)

Dental Carries 358,820 25.378 333330 22.9 (9.76)

Source: Ministry of Health

3 This is only for the three public universities in Table 34


48/86


31

3.2.1. Disease Burden

Malaria

In 2013, the incidence rate of malaria increased to 358.5 per 1,000 population from 337.5 per 1,000

population in 2012. The total diagnosis of disease increased by 7.3 percent to 5,222,099 from 4,865,995

cases in 2012. However, the number of in-patient deaths reduced by 57.9 percent to 1,358 from 3,233 in

2012. Notwithstanding this, malaria continued to be the leading cause of mortality.

Respiratory Infections

Respiratory infections (pneumonia and non-pneumonia) were the leading cause of illness with 5,727,974

cases seen at Out-Patients Department (OPD) and In-Patient Department (IPD), claiming a total number

of 1,255 In-patient deaths. Of the deaths, 964were caused by pneumonia while 291 by non-pneumonia

infections.

HIV/AIDS

In 2013, close to 500,000 people received lifesaving Anti-retroviral (ARVs) in the public health facilities

compared to 480,925 in 2012. Out of the 500,000 on ARVs, 32,000 were children below the age of 15

years, representing 8.0 percent of those on treatment.

Over 95.0 percent of the patients were still on the first line treatment while mothers needing Prevention ofMother to Child Transmission (PMTCT) reduced by 7.4 percent to 90,458 from 97,664 in 2012. During the

period under review, Government introduced option B+ protocol which makes it mandatory for any HIV

positive pregnant woman to be on Anti-retroviral Therapy (ART). As a result, 90,458 received ART

compared to 28,159 in 2012.

3.2.2. Maternal And Child Health

Preliminary data indicates that antenatal coverage in 2013 decreased by 18.8 percentage points to 79.7

percent from 98.5 percent in 2012, whilst average antenatal visits increased marginally by 0.03percentage points. Deliveries by institutional, skilled personnel and trained traditional birth attendants

declined by 2.9 percentage points, 9.4 percentage points and 2.0 percentage points, respectively (see

Table 36).


49/86

32

Table 36: Maternal Health and Family Planning Indicators, 2012 -2013

Indicator 2012 2013 % Point Change 2013/2012

First Antenatal Coverage 98.5 79.7* (18.8)

Average Antenatal Visits 2.75 2.78 0.03

Institutional deliveries 48.6 45.7* (2.9)

Deliveries by Skilled personnel 48.6 39.2 (9.4)

Trained traditional birth attendants (tTBAs) 5.6 3.6 (2.0)

First Postnatal Attendance 72.5 71 (1.5)


* Preliminary

Preliminary results indicate that there was deterioration in child and maternal health indicators. Fully

immunized coverage of children under the age of one year declined to 80.0 percent from 99.0 percent in

2012 (see Figure 6).

Figure 6: Full Immunization Coverage, 2010-2013


3.2.3. Human Resources

In 2013, a total of 22,051 human resource personnel were in the health sector compared to 21,135 in

2012 representing 4.3 percent increase.916 trained professionals were recruited with radiography posting

the largest increase at 44.0 percent followed by pharmacy at 22.0 percent. Recruitment of doctors and

nurses also increased by 8.6 percent and 5.6 percent, respectively.

94 9399

80

0

20

40

60

80

100

120

2010 2011 2012 2013

2010 2011 2012 2013


50/86


33

In terms of share of total recruitments, nurses accounted for the largest share at 58.6 percent followed by

pharmacists. Despite the recruitment, the human resource situation remained below the recommended

levels with a shortfall of 22,712 against the approved establishment of 44,763 (see Table 37).

Table 37: Trends in Human Resource Establishment, 2012-2013

Staff Category 2011 2012 2013 % Change 2013/2012 Recommended Staff Gap (2013 less Recommended)

Clinical Officers 1,509 1,630 1,603 (1.7) 4813 (3,210)

Dentistry 278 307 321 4.6 865 (544)

Doctors 1,076 1,150 1,249 8.6 2939 (1,690)

Nutrition 170 193 194 0.5 330 (136)

Biomedical Sciences 713 751 631 (16.0) 2023 (1,392)

Pharmacy 777 800 978 22.3 1,108 (130)

Physiotherapy 297 331 378 14.2 421 (43)

Radiography 276 305 439 43.9 483 (44)

Midwives 2,753 2,773 2,783 0.4 6106 (3,323)

Nurses 7,996 9,575 10,112 5.6 17,497 (7,385)

Environmental Health 1,367 1,461 1,504 2.9 2063 (559)

Other Health Workers 1,683 1,859 1,859 0.0 6,115 (4,256)

Total 18,895 21,135 22,051 4.3 44,763 (22,712)


In terms of national clinical workers per 1000 population, there was a reduction to 1.4 per 1000 population

from 1.5 per 1000 population in 2012 (see Table 38). This outturn was below the World Health

Organisation (WHO) recommended frontline health personnel level of 2.5 per 1000 population.

Table 38: National Clinical Workers per 1,000 Population, 2012- 2013

Cadre Head Count 2012 per 1000 Pop Head Count 2013 per 1000 Pop

Clinical Officers 1,630 0.1153 1603 0.1101

Dentistry 307 0.0217 321 0.0220

Doctors 1,150 0.0813 1249 0.0858

Nutrition 193 0.0137 194 0.0133

Biomedical Sciences 751 0.0531 631 0.0433

Pharmacy 800 0.0566 978 0.0671

Physiotherapy 331 0.0234 378 0.0260

Radiography 305 0.0216 439 0.0301

Midwives 2773 0.1961 2783 0.1911

Nurses 9,575 0.6772 10112 0.6942

Environmental Health 1,461 0.1033 1504 0.1033

Other Health Workers 1,859 0.1315 12 0.0008

Total 21,135 1.5 20,204 1.4Source: Ministry of Health


51/86


52/86

35

4 0 BUDGET PERFORMANCE

The 2013 budget outturn was not in line with the projections, evidenced by lower than expected revenues

and higher than programmed expenditures. Total Revenue and Grants amounted to K25.6 billionrepresenting 2.7 percent below target while expenditures at K33.8 billion were above target by 6.6

percent. This resulted

Documents

2013 Zambia Economic Report