2017年-世界发展银行全球_Zambia_Economic_Brief_June_2017___Reaping_Richer_Returns_from_Public_Expenditures_in_Agriculture_38页_1mb

ZAMBIA ECONOMIC BRIEF SUMMARY

Core Content

This report, the ninth Zambia Economic Brief, focuses on improving the returns from public expenditures in agriculture. It highlights the need for more efficient and effective spending to support a non-copper economy, reduce poverty, and enhance rural livelihoods. The report also discusses the broader economic developments in Zambia and Sub-Saharan Africa (SSA), including growth projections, fiscal challenges, and the role of public investment in driving sustainable development.

Main Views and Key Information

Economic Outlook for Zambia

• GDP Growth: Projected to increase to 4.1% in 2017, 4.5% in 2018, and 4.7% in 2019.
• Drivers of Growth: Improved copper prices, better rainfall, and increased electricity production.
• Monetary Policy: Central bank eased monetary policy due to declining inflation and stable kwacha.
• Fiscal Challenges: Despite economic recovery, fiscal indicators remain weak. The 2016 fiscal deficit reached 5.7% of GDP, exceeding the approved target of 3.8%.
• Debt Levels: Public debt increased from 35.2% of GDP in 2014 to 55% by the end of 2016. The kwacha's appreciation eased debt servicing costs, but foreign currency and repayment risks remain high.
• Budgetary Issues: Expenditure was not moderated in 2017, and the 7% GDP fiscal deficit target is expected to be a challenge.

Regional Economic Developments

• SSA Growth: Projected to grow at 2.6% in 2017, 3.2% in 2018, and 3.5% in 2019.
• Global Conditions: Improved global growth and commodity prices supported SSA's recovery.
• Commodity Prices: Prices of oil and metals increased, but remain below pre-2015 levels.
• Downside Risks: Tighter global financial conditions, weaker commodity price increases, and protectionism pose risks. Internally, political uncertainty and security threats are concerns.
• GDP Per Capita: Expected to contract by 0.1% in 2017 due to population growth outpacing economic growth.

Challenges in Public Expenditure in Agriculture

• Current Spending: The agriculture budget is dominated by FISP (Farmers Input Support Program) and FRA (Food Reserve Agency), which are unbalanced and inefficient.
• Subsidy Issues: FISP and FRA suffer from poor implementation, high costs, and lack of targeting. The electronic voucher system is a proposed improvement, but its full rollout appears too ambitious.
• Productivity Gaps: Agriculture productivity is low, and the sector is highly dependent on rain-fed farming, increasing vulnerability.
• Need for Reform: Public spending in agriculture should be redirected towards high-return areas such as R&D, extension services, irrigation, and infrastructure to improve efficiency and effectiveness.

Key Ideas for More Productive Agriculture Investment

1. Streamline and Better Target Subsidies

   • Implement an electronic voucher system for FISP.
   • Improve targeting mechanisms to enhance efficiency and reduce costs.
   • Develop a clear exit strategy to avoid indefinite subsidies.
   • Allow farmers to choose their inputs and crops to promote diversification from maize-centric agriculture.

2. Invest in High-Return Areas

   • Redirect savings from unproductive spending to areas like R&D, irrigation, and livestock development.
   • Ensure predictable and strategic resource flows to the sector.
   • Support complementary investments to enhance agricultural productivity and resilience.

3. Address Climate Change Impacts

   • Promote climate-smart agriculture to improve productivity, resilience, and food security.
   • Leverage climate finance to support adaptation and mitigation efforts.

4. Improve Revenue Mobilization and Fiscal Consolidation

   • Ensure revenue reforms are implemented to meet budget targets.
   • Strengthen debt management through a modern Debt Management Office and regular debt sustainability analyses.
   • Focus on fiscal consolidation to maintain sustainable debt levels and reduce deficits.

Conclusion

The report emphasizes the importance of rethinking public expenditure in agriculture to promote inclusive growth and reduce poverty. It calls for greater efficiency, better targeting, and strategic investment in the sector. The broader economic context highlights the need for fiscal discipline, debt management, and institutional reforms to support long-term development and economic stability in Zambia and the broader SSA region.