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One of the poorest countries in the world
Aug 18, 2007 By: Crystal CrimiNot long ago, Zambia’s Ndola was a thriving mining town. Now it’s “mostly a ghost town,” said former resident Mary Kazunga, as empty factories and quiet streets whizzed by her passenger window.
Once one of Africa’s richest countries, Zambia is now one of the poorest in the world several decades after independence.
“The impact of poverty, we have seen it so much, it has really hit the people,” said Mrs. Kazunga, a consultant for and coordinator of Canada Fund. She grew up in the Copperbelt area of Ndola during a time when the country thrived -- now there are people begging in the streets, she said.
“When I started travelling, $2 US was equivalent to one kwacha,” said Mrs. Kazunga, referring to the 1970s. In February, 2006, $1 US equalled to 3,200 kwacha.
Zambia, formally Northern Rhodesia, gained independence from Britain in 1964 and Kenneth Kaunda was its first president. President Kaunda embarked on developing and transforming Zambia into a welfare state from 1965 to 1975, when the country’s copper fetched high prices, said Josephine Muchelemba, an economist as well as a development officer and education coordinator for the Zambia-Canada Program Support Unit, a project of the Canadian International Development Agency.
Subsidies were made available to create industry and jobs, and health care and more schools were provided. But wars occurring around Zambia were taking its toll and the country became a haven for freedom fighters, said Ms. Muchelemba. Zimbabwe closed its border to Zambia and goods had to be flown in and out of the landlocked country. In 1969, Zambia privatized the mining companies. The following year, a major mining disaster impacted productivity and in 1975, copper prices fell. For the first time, Zambia ran a deficit, said Mrs. Muchelemba. With hopes the price would rise, Zambia began borrowing money. An oil crisis in 1979 caused even more devastation. By 1980, the World Bank and International Monitory Fund had provided Zambia with a structure adjustment program, but President Kaunda refused to adhere, she said. In 1987, he introduced a limited debt service to 10 per cent of its external earnings and many donors dumped Zambia, Mrs. Muchelemba added.
When a new president, Frederick Chiluba, came into power in 1991, he followed the restructuring plan completely.
“Those were harsh conditions,” said Mrs. Muchelemba. “Subsidies were removed overnight... really inhumane.”
People lost their jobs and companies left. But Mrs. Muchelemba said measures taken by President Chiluba are finally starting to pay off.
With new mining companies and increasing production, it’s estimated 800,000 tonnes of copper will be extracted by 2008. In 1976, 700,000 metric tonnes were being removed, but by the 1990s, that figure had fallen to 300,000 annually.
“It’s still one of the poorest countries in the world, but it has hope now,” said John Deyell, High Commissioner of Canada in Zambia. Canada is among the countries that has provided 100 per cent debt forgiveness to Zambia.
“The truth of the matter is, our biggest impact is in investment,” said Mr. Deyell.
Canada is looking toward more private sector development to help create more jobs, income and the benefits that follow.
Zambia’s interest payments are starting to go down, said Mrs. Muchelemba. At one point, the debt was as high as $7.5 billion US, but it is estimated to be on the way down to $500 million US.
