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Unlocking economic prosperity in the Zambian Copperbelt

Niels Mulder, Gharad Bryan, Neil Lee, Juliana Oliveira Cunha, Benjamin Shawa, Shahrukh Wani and Eric Werker

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: The Copperbelt province has been the growth engine of Zambia since independence. It was the nation’s mining and industrial hub, accounting for all of Zambia’s large-scale copper mining in the early 2000s. It continues to account for nearly a quarter of national GDP, and per capita GDP is the 3rd highest in the country. However, from 2015 to 2022, the Copperbelt’s economy has contracted, averaging a real GDP growth rate of -1.0% – four percentage points below the national average – ranking lowest out of all provinces. Moreover, over the same period, poverty increased by 17% – seven percentage points above the national average. Despite the growth challenges, the Copperbelt harbours significant potential to drive Zambia’s economic transformation. The global energy transition has reinvigorated interest in the province’s copper mines, and there is potential to increase what the Copperbelt – and Zambia, more generally – get out of their operational mining base. The province also boasts the country’s highest urbanisation and education rates, and has infrastructural and geographical advantages, positioning it well to reclaim its status as an industrial hub. However, unlocking this potential will be challenging. While Zambia relies heavily on natural resources, especially copper, this reliance is heightened in the Copperbelt, where mining represented nearly 40% of GDP in 2013, and continues to account for one-third of national copper production. While resource rents can contribute to economic growth, overreliance on natural resources creates a myriad of challenges. These include, among others, revenue volatility, rent-seeking, institutional weaknesses and corruption, and the so-called Dutch Disease – where natural resource revenues can hurt other sectors by causing inflation and/or currency appreciation. Consequently, regions with abundant natural resources tend to have unequal patterns of growth, worse development outcomes than their non-resource-rich neighbours, and poor development in non-resource sectors. Given the substantial challenges and opportunities that the province presents to propel Zambia to middle-income status, the government of Zambia has requested the IGC to summarise key economic trends in the region and outline policy options on how to approach regeneration.

Keywords: copper; Zambia (search for similar items in EconPapers)
JEL-codes: J01 N0 R14 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2024-02-16
New Economics Papers: this item is included in nep-afr, nep-env and nep-lab
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