Expatriates, mostly British (about 15,000) or South African, live mainly in Lusaka and in the copperbelt in northern Zambia, where they are employed in mines and related activities. Zambia also has a small but economically important Asian population, most of whom are Indians. The country is 42% urban.
Except for an occasional Portuguese explorer, the area lay untouched by Europeans for centuries. After the mid-19th century, it was penetrated by Western explorers, missionaries, and traders. David Livingstone, in 1855, was the first European to see the magnificent falls on the Zambezi River. He named the falls after Queen Victoria, and the Zambian town near the falls is named after him.
In 1888, Cecil Rhodes, spearheading British commercial and political interests in Central Africa, obtained a mineral rights concession from local chiefs. In the same year, Northern and Southern Rhodesia (now Zambia and Zimbabwe, respectively) were proclaimed a British sphere of influence. Southern Rhodesia was annexed formally and granted self-government in 1923, and the administration of Northern Rhodesia was transferred to the British colonial office in 1924 as a protectorate.
In 1953, both Rhodesias were joined with Nyasaland (now Malawi) to form the Federation of Rhodesia and Nyasaland. Northern Rhodesia was the center of much of the turmoil and crisis that characterized the federation in its last years. At the core of the controversy were insistent African demands for greater participation in government and European fears of losing political control.
A two-stage election held in October and December 1962 resulted in an African majority in the legislative council and an uneasy coalition between the two African nationalist parties. The council passed resolutions calling for Northern Rhodesia's secession from the federation and demanding full internal self-government under a new constitution and a new national assembly based on a broader, more democratic franchise. On December 31, 1963, the federation was dissolved, and Northern Rhodesia became the Republic of Zambia on October 24, 1964.
At independence, despite its considerable mineral wealth, Zambia faced major challenges. Domestically, there were few trained and educated Zambians capable of running the government, and the economy was largely dependent on foreign expertise. Abroad, three of its neighbors--Southern Rhodesia and the Portuguese colonies of Mozambique and Angola--remained under white-dominated rule. Rhodesia's white-ruled government unilaterally declared independence in 1965. In addition, Zambia shared a border with South African-controlled South-West Africa (now Namibia). Zambia's sympathies lay with forces opposing colonial or white-dominated rule, particularly in Southern Rhodesia. During the next decade, it actively supported movements such as the Union for the Total Liberation of Angola (UNITA), the Zimbabwe African People's Union (ZAPU), the African National Congress of South Africa (ANC), and the South-West Africa People's Organization (SWAPO).
Conflicts with Rhodesia resulted in the closing of Zambia's borders with that country and severe problems with international transport and power supply. However, the Kariba hydroelectric station on the Zambezi River provided sufficient capacity to satisfy the country's requirements for electricity. A railroad to the Tanzanian port of Dar Es Salaam, built with Chinese assistance, reduced Zambian dependence on railroad lines south to South Africa and west through an increasingly troubled Angola.
By the late 1970s, Mozambique and Angola had attained independence from Portugal. Zimbabwe achieved independence in accordance with the 1979 Lancaster House agreement, but Zambia's problems were not solved. Civil war in the former Portuguese colonies generated refugees and caused continuing transportation problems. The Benguela Railroad, which extended west through Angola, was essentially closed to traffic from Zambia by the late 1970s. Zambia's strong support for the ANC, which had its external headquarters in Lusaka, created security problems as South Africa raided ANC targets in Zambia.
In the mid-1970s, the price of copper, Zambia's principal export, suffered a severe decline worldwide. Zambia turned to foreign and international lenders for relief; but as copper prices remained depressed, it became increasingly difficult to service its growing debt. By the mid-1990s, despite limited debt relief, Zambia's per capita foreign debt remained among the highest in the world.
The 1973 constitution provided for a strong president and a unicameral National Assembly. National policy was formulated by the Central Committee of the United National Independence Party (UNIP), the sole legal party in Zambia. The cabinet executed the central committee's policy.
In accordance with the intention to formalize UNIP supremacy in the new system, the constitution stipulated that the sole candidate in elections for the office of president was the person selected to be the president of UNIP by the party's general conference. The second-ranking person in the Zambian hierarchy was UNIP's secretary general.
In December 1990, at the end of a tumultuous year that included riots in the capital and a coup attempt, President Kaunda signed legislation ending UNIP's monopoly on power. In response to growing popular demand for multi-party democracy, and after lengthy, difficult negotiations between the Kaunda government and opposition groups, Zambia enacted a new constitution in August 1991. The constitution enlarged the National Assembly from 136 members to a maximum of 158 members, establishing an electoral commission, and allowed for more than one presidential candidate who no longer had to be members of UNIP. The constitution was amended again in 1996 to set new limits on the presidency (including a retroactive two term limit, and a requirement that both parents of a candidate be Zambian-born.) The National Assembly is comprised of 150 directly elected members, up to 8 presidentially appointed members and a speaker. Zambia is divided into nine provinces, each administered by an appointed governor.
The Supreme Court is the highest court and the court of appeal; below it are high court, magistrate's court, and local courts.
Zambia maintains an embassy in the United States at 2419 Massachusetts Avenue, NW, Washington, DC 20008 (tel. 202-265-9717).
Kaunda's political party--the United National Independence Party (UNIP)--was founded in 1959 and was in power under Kaunda's direction from 1964 to 1991. Before 1972, Zambia had three significant political parties--UNIP, the ANC, and the United Progressive Party (UPP). The ANC drew its strength from western and southern provinces, while the UPP found some support among Bemba-speakers in the copperbelt and northern provinces. Although not strongly supported in all areas of the country, only UNIP had a nationwide following.
In February 1972, Zambia became a one-party state, and all other political parties were banned. Kaunda, the sole candidate, was elected President in the 1973 elections. Elections also were held for the National Assembly. Only UNIP members were permitted to run, but these seats were sharply contested. President Kaunda's mandate was renewed in December 1978 and October 1983 in a "yes" or "no" vote on his candidacy. In the 1983 election, more than 60% of those registered participated and gave President Kaunda a 93% "yes" vote.
Growing opposition to UNIP's monopoly on power led to the rise in 1990 of the Movement for Multiparty Democracy (MMD). The MMD assembled an increasingly impressive group of important Zambians, including prominent UNIP defectors and labor leaders. During the year, President Kaunda agreed to a referendum on the one-party state and, in the face of continued opposition, dropped the referendum and signed a constitutional amendment making Zambia a multi-party state. Zambia's first multi-party elections for parliament and the presidency since the 1960s were held on October 31, 1991. MMD candidate Frederick Chiluba resoundingly carried the presidential election over Kenneth Kaunda with 81% of the vote. To add to the MMD landslide, in the parliamentary elections the MMD won 125 of the 150 elected seats and UNIP the remaining 25. However, UNIP swept the Eastern Province, gathering 19 of its seats there.
By the end of Chiluba's first term as president (1996), the MMD's commitment to political reform had faded in the face of re-election demands. A number of prominent supporters founded opposing parties. Relying on the MMD's overwhelming majority in parliament, President Chiluba pushed through a series of constitutional amendments in May 1996 that eliminated former President Kaunda and other prominent opposition leaders from the 1996 presidential elections. In the presidential and parliamentary elections held in November 1996, Chiluba was re-elected, and the MMD won 131 of the 150 seats in the National Assembly. Kaunda's UNIP party boycotted the parliamentary polls to protest the exclusion of its leader from the presidential race, alleging in addition that the outcome of the election had been predetermined due to a faulty voter registration exercise. Despite the UNIP boycott, the elections took place peacefully, and five presidential and more than600 parliamentary candidates from 11 parties participated. Afterward, however, several opposition parties and non-governmental organizations declared the elections neither free nor fair. As President Chiluba began his second term in 1997, the opposition continued to reject the results of the election amid international efforts to encourage the MMD and the opposition to resolve their differences through dialogue.
Agriculture provides the main livelihood for half of Zambia's population. Maize (corn) is the principal cash crop as well as the staple food. Other important crops include soybeans, cotton, sugar, sunflower seeds, wheat, sorghum, millet, cassava, tobacco and various vegetable and fruit crops. Zambia has the potential for significantly increasing its agricultural output; currently, only 20% of its arable land is cultivated. In the past, the agriculture sector suffered from low producer prices, difficulties in availability and distribution of credit and inputs, and the shortage of foreign exchange.
The Zambian economy has historically been based on the copper-mining industry, which has accounted for a significant portion of the gross domestic product (GDP), from one-third to one-half of government revenues and more than 90% of Zambia's foreign-exchange earnings. Due to a decline in world copper prices starting in the mid-1970s, lack of investment to increase productivity and output, naturalization and mismanagement, and limited technical expertise, the copper-mining base of the economy has eroded over time. Average annual output was nearly 700,000 tons in the early 1970s. This dropped to just over 300,000 tons in 1995.
After independence in 1964, and particularly beginning in the 1970s, Zambia relied heavily on socialist-style planning and administrative controls to manage its economy; on the public sector--especially parastatal enterprises--to undertake investment and generate economic growth and employment; and on international borrowing to finance public sector investments and to support levels of consumption that proved to be unsustainable. As a result, in late 1991, the Zambian economy faced many problems: basic goods and services were in short supply; the money supply was growing rapidly because of the manner in which the government's domestic debt was financed; military expenditures were rising while social sector expenditures were declining; tax compliance was low, the budget deficit was large and increasing; many parastatal companies were heavily indebted and suffered crippling losses; private investment had collapsed; business and consumer confidence had eroded; external debt was not being services; a parallel market in foreign exchange was flourishing; asset holders were transferring their capital out of the country and switching to foreign currency for local transactions; the country's physical infrastructure was rapidly deteriorating; and Zambia had neither food reserves nor the financial resources to deal with natural disasters and emergencies.
The present Chiluba government came to power after democratic, multi-party elections in November 1991, committed to an economic recovery program which included restoring Zambia's economic growth prospects by stabilizing the economy, moving toward external viability, promoting the private sector based on free market principles, delinking government from business activities more efficiently carried out by the private sector, a sharp reduction in the size of the public sector through a comprehensive program of privatization and parastatal reform, and reversing the decline in Zambia's social sector's delivery systems and infrastructure. Since these economic reforms began, Zambia has suffered droughts (three years out of the five) and falling copper production combined with the recurrent episodes of macroeconomic instability, these conditions have meant that the improvements in economic incentives have yet to result in economic growth, in fact, real GDP in 1995 was lower than it was in 1991. Nonetheless, positive effects are emerging.
The inflation rate has declined sharply, from triple-digit rates for several years up to 1992, to an average rate of 38% since mid-1993.
The allocation of financial resources has been improved through the maintenance of positive real interest rates and through the sharp reduction in the spread between lending and deposit rates through reductions in reserve requirements.
Non-traditional exports have risen by 100% since 1992.
Maize planting has declined in favor of more drought-resistant staples and commercial crops.
While high interest rates and the instability of the kwacha have inhibited strong growth in new investment, the elimination of exchange controls means that developing foreign exchange-based activities, such as tourism, have accelerated.
Substantial privatization of state-owned enterprises has taken place mainly reflecting direct foreign investment. The government has approved the privatization of the copper industry, which is expected to take place in 1997.
The domestic fiscal deficit was about 7% of GDP in 1991; in 1995, the domestic budget was nearly in balance, and domestic arrears were cleared as well.
The strengthening of the fiscal position was accomplished by a reduction in domestic expenditures from 25% of GDP in 1991 to a 1995 level of less than 18%. The main cuts were in subsidies and agricultural expenditure, but other current and capital expenditures also decreased.
The ratio of revenue to GDP stands at 19%, despite lower mining revenues; establishment of an independent revenue authority and the introduction of a value-added tax (VAT) are strengthening revenue performance.
The Zambian Government has implemented far-reaching market-oriented reforms. To begin with, the government has liberalized markets, and almost all prices are now market-determined. In particular, the government freed all agricultural prices and has steadily reduced its role in maize and fertilizer marketing. In 1991, virtually all marketed maize was handled by the government, whereas now nearly all marketing is carried out by the private sector, to the benefit of both producers and consumers. The same is true in the milling sector. The government has undertaken a privatization and parastatal reform program to reduce its direct role in commercial activities.
With donor assistance, and when the budget allows, rehabilitation of the country's infrastructure has become a renewed priority. Some roads are being repaired, some schools and hospitals are being refurbished and resupplied, water systems are being upgraded, and the telecommunications system is being readied for privatization. There has been far-reaching liberalization of financial markets. In 1992, interest rates were decontrolled and the kwatcha allowed to float. A treasury bill auction was introduced in 1993. Reform of the banking sector began in 1992, and weak commercial banks have been allowed to fail. Market-oriented methods of implementing monetary policy--where the central bank influences the supply of money and the price and availability of credit--were introduced in 1993 and are being developed further. Fiscal policy has been strengthened with the aim of enhancing efficiency and bringing more macroeconomic stability. Zambia is moving toward a more outward, export-oriented trade policy. All domestic and external trade, except petroleum products, has been left to the private sector, resulting in a greatly improved availability of consumer and producer products in the market. However, despite these reforms, the response of output to date has been uneven.
During the early 1990s, reacting to positive political developments in South Africa and Namibia, Zambia relaxed its restrictions on using South African ports. A new transportation route opened up through Namibia to Walvis Bay, which is of growing importance for Zambia's external trade. Zambia also is participating with its neighboring countries, under the aegis of the Southern African Development Community (SADC), in its efforts to strengthen, restructure, refurbish, rehabilitate, and improve the transportation infrastructure of Southern and Eastern Africa so as to reduce the region's economic dependence on the vulnerability of events in South Africa.
President Kaunda was a persistent and very visible advocate of peaceful change in South Africa, supporting liberation movements in Angola, Namibia, Southern Rhodesia (Zimbabwe) and South Africa. Many of these organizations were based in Zambia during the 1970s and 1980s.
President Chiluba has settled for a much lower profile internationally. His government has played a very constructive regional role sponsoring Angola peace talks that led to the Lusaka accord. Zambia has provided troops to UN peacekeeping initiatives in Mozambique, Rwanda, and Angola. Zambia was the first African state to cooperate with the International Tribunal investigation of the 1994 genocide in Rwanda.
The United States has a substantial foreign assistance program in Zambia. The U.S. Agency for International Development (USAID) pursues a strategy aimed at promoting an open and democratic climate with a market-based economic recovery and improved health care.
Although health sector activities dominate two-thirds of the USAID portfolio, activities focused on agriculture, democracy and governance, privatization and participation in economic reform, are important elements of USAID program success. In addition to support for development projects, the United States also has provided considerable emergency food aid during periods of drought through the World Food Program (WFP).
A country agreement inviting the Peace Corps to work in Zambia was signed by the U.S. and Zambia on September 14, 1993. The first group of volunteers was sworn in on
April 7, 1994. By mid-May 1996, 50 volunteers were working in Luapula, Northern, Eastern, and Lusaka provinces in three project areas--community health education, water and sanitation, and law lectures at Unza.
The U.S. embassy in Zambia is at the corner of Independence and United Nations avenues (P.O. Box 31617), Lusaka (tel. 260 1 250955; fax 260-1-252225).
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