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©2017 | UNLOCKING ZAMBIA’S POTENTIAL SALIM KAUNDA - HEAD OF RESEARCH AND ANALYSIS (PMRC) PUBLIC LECTURE LOOKING AHEAD – THE PROSPECTS GO SEVENTH NATIONAL DEVELOPMENT PLAN (7NDP) AND NATIONAL ECONOMIC RECOVERY PLAN

LOOKING AHEAD – THE PROSPECTS...to external shocks and dilution of mining sector contributions to foreign exchange earnings. 2. POLICY MONITORING AND RESEARCH CENTRE M inistry of

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Page 1: LOOKING AHEAD – THE PROSPECTS...to external shocks and dilution of mining sector contributions to foreign exchange earnings. 2. POLICY MONITORING AND RESEARCH CENTRE M inistry of

©2017 | UNLOCKING ZAMBIA’S POTENTIAL

SALIM KAUNDA - HEAD OF RESEARCH AND ANALYSIS (PMRC)

PUBLIC LECTURE

LOOKING AHEAD –THE PROSPECTS

GO

SEVENTH NATIONAL DEVELOPMENT PLAN (7NDP) AND NATIONAL ECONOMIC RECOVERY PLAN

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OUTLINEt u

OUTLINE

SEVENTH NATIONAL DEVELOPMENT PLAN (7NDP)

NATIONAL ECONOMIC RECOVERY PLAN

n The 5 Pillars of the Economic Recovery

KEY SECTORAL PROGRAMMES

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INTRODUCING THE SEVENTH NATIONAL DEVELOPMENT PLAN (7NDP)

nThe SeventH Natinal Development Plan (7NDP) was launched on 21st June 2017 by His Excellency The President of the republic of Zambia Mr. Edgar Lungu.

nThe 7NDP is aimed at attaining the long-term objectives as outlined in the Vision 2030 of becoming a “prosperous middle-income country by 2030”.

nThe 7NDP departs from sectoral-based planning to an integrated (multi-sectoral) development approach under the theme “Accelerating development efforts towards the Vision 2030 without leaving anyone behind”.

nUltimately it is envisaged that the integrated development approach in the 7NDP will help change the focus of government line ministries from competing with each other to coordinated harmonization (working together).

A

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GOALS OF THE SEVENTH NATIONAL DEVELOPMENT PLAN (7NDP)

n The goal of the 7NDP is to create a diversified and resilient economy for sustained growth and socio-economic transformation driven, among others, by agriculture.

n The 7NDP as an effective guide towards Zambia’s aspirations of being a developed middle-income nation by the year 2030.

THE KEY OUTCOMES INCLUDE;

GO

AL

n Economic diversification and job creation n Reduction of poverty and vulnerability n Enhanced human development n Reduced developmental inequalities and n The creation of a conducive governance environment for a diversified

economy.

B

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INTEGRATED DEVELOPMENT APPROACH

7ND

P P

RO

GR

AM

ME

STR

ATEG

IC O

BJE

CT

IVE

SD

G L

INK

ED

Inclusive and Diversified Economy

Environmental and Social Sustainability

Competitiveness and Innovation

Strengthening of Mechanisms and Capacities

KPIs 1

KPIs 2

KPIs 3

KPIs 4

KPIs 5

Source: Seventh National Development plan (2017 – 2021)

VISION 2030

Creating a conducive

Governance Environment for a

Diversified Economy

Poverty & Vulnerability

Reduction

Economic Diversification and

Job Creation

Enhancing Human

Development

Reducing Development Inequalities

7NDP MAIN OUTCOMES

C

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SITUATING THE 7NDP IN THE 2030

D

VISION 2030

A Nation with Diversified and

Sustainable Growth

A Nation without Hunger and Poverty

A Nation with Improved Human

Capital

Economic Diversification and Job Creation

Reducing Poverty and Vulnerability

Reducing Developmental

Inequalities

7NDP

Enhancing DevelopmentCreating a Conductive

Governance Environment for a Diversified Economy

A Nation with Improved

Governance

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GLOBAL AND REGIONAL INTEGRATIONFrom the 7NDP the nation’s development interventions will be harmonized with the regional and global development agendas, such as:

Through the 7NDP, the Government will create an environment to transition from the Millennium Development Goals (MDGs) to Sustainable Development Goals (SDGs), given that the SDG domestication requires an integrated multi-sectoral engagement, with interlinking goals. This approach will be a catalyst to the promotion of partnerships in a transformative manner.

THE SUSTAINABLE DEVELOPMENT GOALS (SGD)

THE AFRICAN UNION – AGENDA 2063

THE HUMAN DEVELOPMENT INDEX

THE SOUTHERN AFRICAN DEVELOPMENT COMMUNITY (SADC)

REGIONAL INDICATIVE STRATEGIC DEVELOPMENT PLAN

THE VIENNA PROGRAMME OF ACTIONTHE ISTANBUL PROGRAMME OF ACTION

1

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ECONOMIC GROWTH STRATEGIES

Growth will be supported by policy interventions related to increased investments in growth sectors of agriculture, tourism, manufacturing and energy, supported by mining, public economic infrastructure in transport and communication.

The focus of the Plan on these sectors is expected to have the following benefits:

a. Creation of decent, productive jobs and increased incomes; climate smart and organic agriculture, sustainable forestry, sustainable construction and small-scale mining sectors which will be the areas of focus as they are labour intensive.

b. Increased foreign exchange earnings from agriculture, tourism, and small-scale mining, thereby increasing the economy’s resilience to external shocks and dilution of mining sector contributions to foreign exchange earnings.

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Min

istr

y of

Dev

elop

men

t Pla

nnin

g

t u

FLOW OF INFORMATION FOR DECISION MAKING

PARLIAMENT

MPSAs equiped with robust MIS and Datebase

IMPACT

Reporting on KPIs

CABINET

Reporting on Output/Input Inductors

OUTPUT

OUTCOME

INPUT

7NDP National, Provincial District

Indicators aligned to the

Nation Outcomes

MTR, Evaluation

Report

APR,Outcome Reports

Quarterly Reporting Monthly

Reporting Budget

Prog

ram

me

and

Polic

y Re

com

men

datio

ns3

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LOOKING AHEAD: ECONOMIC RECOVERY PROGRAMME

In order to restore economic stability, the Government has designed an Economic Recovery Programme dubbed “Zambia Plus”. (a homegrown Economic Recovery Programme to be complemented by external support from our Cooperating Partners, including the International Monetary Fund (IMF).

Enhancing domestic resource mobilisation and refocusing of public spending on core public sector mandates

Ensuring greater economic stability, growth and job creation through policy consistency to raise confidence for sustained private sector investment.

Scaling-up Government’s social protection programmes to shield the most vulnerable in our society from negative effects of the programme

Improving our economic and fiscal governance by raising the levels of accountability and transparency in the allocation and use of public finances

Restoring credibility of the budget by minimising unplanned expenditures and halting the accumulation of arrears; and

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5

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FISCAL MEASURES

Efforts are needed to ensure there is sufficient revenue to fund Government spending. One of the measures is on improving tax policy, which falls under the responsibility of the Ministry of Finance

n Arrears clearance: The accumulation of arrears has been a concern since 2015. Arrears attract interest costs, leading to increased government interest pay-ment bills.

n Improve debt management: Publication of a medium-term debt strategy is essential to ensure a move from borrowing on an ad hoc basis to one based on proper debt sustainability analysis, which considers all the risks related to the types of borrowing and the costs of repayment.

n Revenue mobilization: Zambia needs to strengthen efforts to improve domestic revenue mobilization and to meet the targets in the budget.

n Boosting the non-copper economy: The commodity price shock highlights the need for Zambia to reduce its dependency on copper, a challenge it has been grappling with for over 50 years. There were plenty of good ideas presented in the 2017 budget, and the forthcoming National Development Plan should cement the reform direction, especially in agriculture – a leading non-copper sector.

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KEY SECTOR PROGRAMMES – LOOKING AHEADWHERE HAS MONEY BEEN ALLOCATED?

Diversification to cash crops such as; cotton, cashew nuts, soya beans, cassava and rice through the full migration to the E-Voucher System. (To be used for all beneficiaries under the Farmer Input Support Programme (FISP) in the 2017-2018 farming season.) The Cashew Nut Infrastructure Support Programme,

valued at US$55.4 million. The project targets 600,000 beneficiaries in Western Province (300,000 women and 100,000 youths). Government is to create a Fund under the Emergent Farmer Support Programme. The target is to support 1,000 emergent farmers.

US$40 million secured for on lending to smallholder farmers to promote mechanisation of crop production systems.

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INDUSTRALISATION

nGovernment will facilitate the development of the Kafue Iron and Steel Economic Facility Zone and the Kalumbila Multi Facility Economic Zone. The

private sector will invest US$100 million in the Kalumbila Multi Facility Economic Zone.

n Industrialisation cannot take place without financing to SMEs that form the backbone of the

economy. Government has accessed US$50 million for on- lending to SMEs. This will create dynamic SMEs that will contribute to growth and generate jobs.

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ENERGY

nIn the electricity sub-sector, insufficient investment in generation capacity has led to power deficits. Going forward, Government will by the end of 2017 move to cost reflective tariffs to attract private sector investmen. This, however, does not mean that consumers should end up paying for inefficiency.

n   New generation includes the Scaling-Up Solar Project and the development of the Kafue gorge, Batoka gorge and Kalungwishi. In addition, Government is continuing to expand the national grid.

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EDUCATION AND SKILLS DEVELOPMENT

n In 2016, Government recruited 2,289 primary and 3,410 secondary school teachers.

nGovernment completed the construction of 62 new secondary schools out of the targeted 115 while the first phase of upgrading 220 day secondary schools was finalised.

n In 2017, teacher recruitment and retention at all levels will continue in order to reduce the pupil-teacher ratio.

nTo improve the quality and relevance of tertiary education provided by public and private universities, the Higher Education Authority and the Zambia Qualifications Authority were operationalized in 2016

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EDUCATION AND SKILLS DEVELOPMENT

n As an effort towards reducing the financial challenges in our public universities, Government will in 2017 work towards the operationalisation of the Higher Education Loans Scheme. The objective is to provide an efficient, effective and self-sustaining financing mechanism for university education.

n (This loan scheme will replace the current bursary scheme, which has proved to be unsustainable. In 2017, Government will continue with the bursaries scheme as it develops the loan scheme system, especially on disbursement, bonding and recovery.)

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EDUCATION AND SKILLS DEVELOPMENT CONT..

n In order to address the challenges of inadequate skills among our craftsmen and artisans, Government will introduce a Skills Development Fund. This is part of the long term financing solution for technical, entrepreneurial and vocational education. The Fund will be jointly managed with the private sector in order to ensure that the skills that are being developed are relevant to the requirements of industry. This is particularly critical at this moment when our country is embarking on a path towards meaningful industrialisation.

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YOUTH EMPOWERMENT

nIn line with the National Youth Policy and the Action Plan for Youth Empowerment and Employment, Government is to focus on equipping the youth with vocational and entrepreneurial skills.

nThe youths will also be provided with affordable start-up capital. To enable them engage in meaningful economic activities.

nIn addition, Youth Resettlement Schemes will be established through which land and start-up kits will be provided to the youth to enable them engage in agriculture and agri-business for their livelihood.

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Improving domestic resource mobilisation

Diversification to AgricultureFisheries, Livestock, Crops by

Province

Skills DevelopmentYouth Empoweremnt

Revamping industries for job creation

Value addition to our produce

Growth of the manuacturing Industry

Implementation of National Youth Policy

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GENERAL PMRC RECOMMENDATIONS

Government must set up a mechanism for monitoring target indicators outlined in the 2017 budget. The Minister of Finance must make these commitments through the 2017 budget and provide these reports both in the Mid-Year Economic Review for 2017 and in subsequent budget addresses. This will help the country to keep track of the progress being made and make the necessary adjustments to achieve success.

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Plot No. 36C Sable Roads, Kabulonga, Lusaka, Zambia, Private Bag KL 10Tel: +260 211 269 717 | +260 979 015 660

THANK YOUUnlocking Zambia's Potential Response to this presentation can be sent to: [email protected]

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