Agricultural growth and investment options for poverty reduction in Zambia

Zambia has experienced strong economic performance since 1999. However, agriculture has not performed as well as the rest of the economy, and although the incidence of poverty has declined, it still remains high. The Zambian government, within the framework of the Fifth National Development Plan (FNDP), is in the process of implementing the Comprehensive Africa Agriculture Development Programme (CAADP), which provides an integrated framework of development priorities aimed at restoring agricultural growth, rural development and food security. This paper analyzes the agricultural growth and investment options that can support the development of a comprehensive rural development component under Zambia’s FNDP, in alignment with the principles and objectives of the CAADP, which include the achievement of six percent agricultural growth and allocation of at least ten percent of budgetary resources to the sector.

Computable general equilibrium (CGE) model results indicate that it is possible for Zambia to reach the CAADP target of six percent agricultural growth, but this will require additional growth in all crops and sub-sectors. Zambia cannot rely on only maize or higher-value export crops to achieve this growth target; broader-based agricultural growth, including increases in fisheries and livestock, will be important. So, too, is meeting the Maputo declaration of spending at least ten percent of the government’s total budget on agriculture. In order to meet the CAADP target, the Government of Zambia must increase its spending on agriculture in real value terms by about 17-27 percent per year between 2006 and 2015, and spend about 8-18 percent of its total expenditure on the sector by 2015.

Although agriculture has strong linkages to the rest of the economy and its growth will result in substantial overall growth in the economy and the household incomes of rural and urban populations, achieving the CAADP target of six percent agricultural growth will not be sufficient to meet the first Millennium Development Goal (MDG1) of halving poverty by 2015. To achieve this more ambitious target, both agricultural and non-agricultural sectors would need an average annual growth rate of around ten percent per year. These growth requirements are substantial, as are the associated resource requirements. Thus, while the MDG1 target appears to be beyond reach for Zambia, achieving the CAADP target should remain a priority, as its more reasonable growth and expenditure scenarios will still substantially reduce the number of poor people living below the poverty line by 2015, and significantly improve the well-being of both rural and urban households.

Author: 
Benin, Samuel
Thurlow, James
Diao, Xinshen
Kalinda, Henrietta
Kalinda, Thomson
Published date: 
2008
Publisher: 
International Food Policy Research Institute (IFPRI)
Series number: 
791
PDF file: