Zambia: Selected Issues

International Monetary Fund

No 2025/242, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper examines how various constraints affect firm performance and contribute to Zambia’s low rate of new business formation. Unlocking Zambia’s firm growth potential requires decisive policy action to address long-standing structural constraints. This paper’s findings underscore the critical importance of expanding access to finance, ensuring reliable electricity supply, and establishing a more level playing field for formal enterprises. Targeted reforms—such as deepening credit markets, strengthening financial infrastructure, investing in power infrastructure, and simplifying regulatory processes—would enable existing firms to expand and compete more effectively. Equally, policies that support new firm creation, including improved access to startup capital and tailored support for entrepreneurs, are essential to spur innovation and job creation. Together, these measures would accelerate structural transformation, raise productivity, and foster more inclusive and resilient economic growth. Removing key barriers to firm growth is essential not only to scale up existing businesses, but also to support structural transformation by facilitating the shift of labor into more productive, formal sector employment.

Keywords: firm formation; B. firm landscape; effect estimates firm growth; management institution; climate framework; firm growth; Climate change; Natural disasters; Climate finance; Greenhouse gas emissions; Global; Sub-Saharan Africa (search for similar items in EconPapers)
Pages: 36
Date: 2025-08-14
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