What are the Constraints to Inclusive Growth in Zambia?

Despite positive, relatively broad-based
and stable growth record in recent years and immense
untapped potential in agriculture, mining and services,
Zambia's poverty rates have not declined significantly
and remain high. Income growth is limited by coordination
failures such as poor access to domestic and international
markets, inputs, extension services and information. High
indirect costs - most of which attributable to
infrastructure service-related inputs into production
including energy, transport, telecom, water, but also
insurance, marketing and professional service - undermine
Zambia's competitiveness limit job creation and
therefore serve as a major constraint to pro-poor growth.
Continued real appreciation is another serious threat to the
competitiveness of export-oriented and import-competing
sectors and to job creation. For Zambia to stay competitive
and sustain the growth momentum it will be critical to
improve productivity - including the productivity of its
labor force, and to lower indirect production costs related
to basic services. Carefully crafted monetary and fiscal
policies will also be critical in responding to the real
appreciation pressures. Improving the quality and access to
secondary and tertiary education is essential if the poor
are to benefit from future growth of the non-farm economy.
Weak governance and in particular poor government
effectiveness, are factors behind the market coordination
failures and the identified government failures, and are as
such major obstacles to inclusive growth in Zambia.