The Unique Face of Poverty in The Unique Face of Poverty in

ZAMBIA ZAMBIA

Valerie KozelValerie Kozel

BBL Poverty Impact Analysis, BBL Poverty Impact Analysis, Monitoring, and EvaluationMonitoring, and Evaluation

October 17, 2006October 17, 2006

Overview of Presentation Overview of Presentation

Context (matters a lot)Context (matters a lot) PVA – Approach and Key FindingsPVA – Approach and Key Findings

– What were we trying to achieve?What were we trying to achieve?– Were we successful? Were we successful?

Policy Recommendations?Policy Recommendations? LessonsLessons

ContextContext

Zambia, once the “jewel in the crown” of Africa, is now Zambia, once the “jewel in the crown” of Africa, is now among the poorest countries. among the poorest countries. – Zambia first country in Africa to achieve independence: Zambia first country in Africa to achieve independence:

resource rich, strong economic position. resource rich, strong economic position. – Soon after, experienced decades of economic decline. Soon after, experienced decades of economic decline.

Despite a slow recovery in late 1990s and positive rates of Despite a slow recovery in late 1990s and positive rates of growth in recent years, economic conditions remain difficult growth in recent years, economic conditions remain difficult and the future uncertain.and the future uncertain.

– Zambia is still struggling to reverse deterioration in basic Zambia is still struggling to reverse deterioration in basic services in the 1990s. The capacity of public sector is weak services in the 1990s. The capacity of public sector is weak and corruption widespread. and corruption widespread.

– Moreover Zambia is entering its third decade of double-digit Moreover Zambia is entering its third decade of double-digit HIV/AIDS prevalence (16% of the adult population – 18% of HIV/AIDS prevalence (16% of the adult population – 18% of women, 13% of men)women, 13% of men)

– These conditions have extracted a toll on the Zambian These conditions have extracted a toll on the Zambian people: a continuing fall in life expectancy, deteriorating people: a continuing fall in life expectancy, deteriorating stock of human capital, rising malnutrition and ill-health, and stock of human capital, rising malnutrition and ill-health, and continuing high levels of poverty.continuing high levels of poverty.

Economic Performance: Levels and Economic Performance: Levels and Annual Growth Rates of GDPAnnual Growth Rates of GDP

-15

-10

-5

0

5

10

15

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19

60

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62

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66

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ua

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GD

P p

er

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pit

a (

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ou

sa

nd

s o

f 1

99

4 K

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Annual Growth Rate of GDP per Capita (left scale) GDP per Capita (right scale)

Expectations of Zambians are high… formed by good Expectations of Zambians are high… formed by good years just after independence, high levels of education, years just after independence, high levels of education, modernization. But the basis for growth remains narrow modernization. But the basis for growth remains narrow and highly dependent on copper prices (good in recent and highly dependent on copper prices (good in recent years) and vagaries of the weather. The vast majority of years) and vagaries of the weather. The vast majority of rural poor continue to depend on subsistence agriculture, rural poor continue to depend on subsistence agriculture, conditions little changed. conditions little changed.

Zambia continues to be heavily aid dependent (WB Zambia continues to be heavily aid dependent (WB borrower since early 1970s – instructive to look at history borrower since early 1970s – instructive to look at history of lending, ESW). of lending, ESW). – Clarity on donor roles, donor coordination and harmonization Clarity on donor roles, donor coordination and harmonization

essential. essential. – Coordination on shared agendas e.g. poverty reduction is Coordination on shared agendas e.g. poverty reduction is

particularly challenging. particularly challenging. – What is the Bank’s role in the country? What is the Bank’s role in the country?

Objectives of PVAObjectives of PVA

Update understanding of poverty and vulnerability (last PA in Update understanding of poverty and vulnerability (last PA in 1994 – excellent report, limited impact)1994 – excellent report, limited impact)– Inform GRZInform GRZ– Inform other stakeholders in ZambiaInform other stakeholders in Zambia– Inform the Bank, so we can assess our own CAS measuresInform the Bank, so we can assess our own CAS measures

In light of this, assess design and implementation of the PRSP In light of this, assess design and implementation of the PRSP (I-PRSP in 2000, PRSP in 2002)(I-PRSP in 2000, PRSP in 2002)

Highlight issues to be addressed in next PRSP (Fifth National Highlight issues to be addressed in next PRSP (Fifth National Development Plan – FNDP, 2006), provide analytic basis for Development Plan – FNDP, 2006), provide analytic basis for informed debate in Zambia, push for greater accountability of informed debate in Zambia, push for greater accountability of GRZ to the Zambian people.GRZ to the Zambian people.

ApproachApproach

PVA was designed and carried out in highly PVA was designed and carried out in highly participatory fashion involving:participatory fashion involving:

Early and continuing consultations with NGOs, academics and Early and continuing consultations with NGOs, academics and research organizations, international partners, Parliamentarians, research organizations, international partners, Parliamentarians, labor organizations, including GRZ labor organizations, including GRZ

Collaborative work with local academics and research institutes on Collaborative work with local academics and research institutes on key background paperskey background papers

Early discussion of key findings, distribution of background papers, Early discussion of key findings, distribution of background papers, drafts available on SARPN website.drafts available on SARPN website.

However: GRZ was not strongly vested in the work. However: GRZ was not strongly vested in the work. Lack of clarity on specific GRZ counterpart Lack of clarity on specific GRZ counterpart agency, over-emphasis of CSO, ZAMSIF linksagency, over-emphasis of CSO, ZAMSIF links

The PVA used an innovative quant-qual The PVA used an innovative quant-qual approach to better understand the unique approach to better understand the unique nature of poverty in Zambia and future nature of poverty in Zambia and future challenges:challenges:

analysis of consumption-based poverty measures and non-analysis of consumption-based poverty measures and non-income dimensions of poverty (e.g. schooling and school income dimensions of poverty (e.g. schooling and school enrollments, malnutrition, access to basic services, enrollments, malnutrition, access to basic services, employment composition, survival rates);employment composition, survival rates);– 2002/03 LCMS, cost of basic needs approach, building on 2002/03 LCMS, cost of basic needs approach, building on

earlier poverty linesearlier poverty lines– 92, 96, 2001 DHS, 1990/2000 Pop Census92, 96, 2001 DHS, 1990/2000 Pop Census

augmented by in-depth qualitative field studies in urban augmented by in-depth qualitative field studies in urban and rural areas.and rural areas.

Plagued by problems with inconsistent data over time Plagued by problems with inconsistent data over time (typical in AFR), “progress by fiat”, political considerations(typical in AFR), “progress by fiat”, political considerations

Given high levels of insecurity, PVA focused explicitly on links Given high levels of insecurity, PVA focused explicitly on links between risk, vulnerability and poverty: risk viewed as between risk, vulnerability and poverty: risk viewed as important cause of povertyimportant cause of poverty

including economy-wide (recent droughts, commodity price including economy-wide (recent droughts, commodity price shocks) as well as idiosyncratic shocks (disease, mortality and shocks) as well as idiosyncratic shocks (disease, mortality and orphanhood)orphanhood)

and in particular on the links between HIV/AIDS and povertyand in particular on the links between HIV/AIDS and poverty

Broader focus – poverty, risk, vulnerability – was widely Broader focus – poverty, risk, vulnerability – was widely appreciated:appreciated:

Zambian’s perceived their world to be uncertain, carry many risks, Zambian’s perceived their world to be uncertain, carry many risks, and bemoaned capacity to deal with these.and bemoaned capacity to deal with these.

““Poverty” (and headcounts) equated with reforms and neoliberal Poverty” (and headcounts) equated with reforms and neoliberal policies of 1990s. Vulnerability” seen as capturing quality of policies of 1990s. Vulnerability” seen as capturing quality of Zambian people’s lives.Zambian people’s lives.

Highlights: FindingsHighlights: Findings Poverty levels remain high in Zambia, despite recent signs of Poverty levels remain high in Zambia, despite recent signs of

economic recovery. 95% of respondents in the LCMS survey said economic recovery. 95% of respondents in the LCMS survey said they were poor/very poor, few felt conditions had improved. they were poor/very poor, few felt conditions had improved.

0.62

0.400.45

0.28

0.2

.4.6

He

ad

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overt

y R

ate

Rural Urban

Headcount Poverty Rates, Urban vs. Rural

Poverty Core Poverty

0.5

40

.32

0.5

20

.35

0.5

60

.34

0.6

70

.47

0.4

70

.29

0.7

50

.54 0.6

10

.37 0

.47

0.2

5

0.5

20

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0.2

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vert

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ate

Headcount Poverty Rates by Province

Poverty Core Poverty

Official estimates based on (possibly) comparable surveys: Official estimates based on (possibly) comparable surveys: poverty levels very high e.g. compared to other African countries poverty levels very high e.g. compared to other African countries (too high?), show no discernable trend over the 1990s(too high?), show no discernable trend over the 1990s

GRZ Official Poverty Estimates – 1991 thru 2004 % Poor

1991 % Poor

1993 % Poor

1996 % Poor

1998 % Poor

2004 Province Central 70 81 74 77 76 Copperbelt 61 49 56 65 56 Eastern 85 91 82 79 70 Luapula 84 88 78 82 79 Lusaka 31 39 38 53 48 Northern 84 86 84 81 74 Northwestern 75 88 80 77 76 Southern 79 87 76 75 69 Western 84 91 84 89 83 All Zambia 70 74 69 73 68

Non-income indicators also high. Viz. infant and child mortality is Non-income indicators also high. Viz. infant and child mortality is high, absolutely and in comparison to other SSA countrieshigh, absolutely and in comparison to other SSA countries

0 50 100 150 200 250

South Africa 1998

Namibia 2000

Gabon 2000

Eritrea 2002

Madagascar 2003/2004

Zimbabwe 1999

Mauritania 2000/01

Ghana 2003

Kenya 2003

Nigeria 1999

Togo 1998

Tanzania 1999

Cameroon 1998

Uganda 2000/01

Benin 2001

Ethiopia 2000

Zambia 2001/02

Cote d'Ivoire 1998/99

Burkina Faso 2003

Malawi 2000

Rwanda 2000

Mali 2001

Niger 1998

Deaths per 1000 Births

Infant (Under Age 1) MortalityChildhood (Age 1-4) Mortality

Malnutrition shows similar patterns Malnutrition shows similar patterns

0 10 20 30 40 50 60

Gabon 2000

Namibia 2000

Cote d'Ivoire 1998/99

Guinea  1999

Zimbabwe 1999

Ghana 2003

Benin 2001

Kenya 2003

Mauritania 2000/01

Eritrea 2002

Mali 2001

Burkina Faso 2003

Uganda 2000/01

Rwanda 2000

Tanzania 1999

Zambia 2001/02

Madagascar 2003/2004

Malawi 2000

Ethiopia 2000

Percent of Children Under Age 5 Who Are Wasted or Stunted

% Wasted (Low Weight for Height)

% Stunted (Low Height for Age)

Trends in Nutritional Status of Children Under 5

40%

5%

25%

42%

4%

24%

47%

5%

28%

% Stunted % Wasted % Underweight

1992 1996 2001/02

Overall, data suggest virtually no improvement in rural living Overall, data suggest virtually no improvement in rural living conditions in 1990s. conditions in 1990s.

Differences are stark between rural and urban areas in ZambiaDifferences are stark between rural and urban areas in Zambia – three-quarters of the poor live in rural areas and the majority rely on three-quarters of the poor live in rural areas and the majority rely on

subsistence rain-fed agriculture; few have adequate access to transport, subsistence rain-fed agriculture; few have adequate access to transport, communications, and power (<5%), and health and education services are only communications, and power (<5%), and health and education services are only gradually improving after a decade of neglect. gradually improving after a decade of neglect.

Share of rural labor force in agriculture increased over the 1990s Share of rural labor force in agriculture increased over the 1990s – from 88% in 1990 to 94% in 2000. Despite some increase in – from 88% in 1990 to 94% in 2000. Despite some increase in cash cropping (cotton, tobacco), structural problems continue to cash cropping (cotton, tobacco), structural problems continue to plague the sector. plague the sector.

High uncertainty – in prices, weather, death and disease, also High uncertainty – in prices, weather, death and disease, also government policies. government policies.

In qualitative assessments, rural respondents cited high cost/low In qualitative assessments, rural respondents cited high cost/low availability of ag inputs, low prices, limited markets, lack of availability of ag inputs, low prices, limited markets, lack of credit, lack of job opportunities as reasons for their poverty. credit, lack of job opportunities as reasons for their poverty. Many rural respondents wished for a return to the past – at time Many rural respondents wished for a return to the past – at time of relative stability and prosperity.of relative stability and prosperity.

Rural poverty is a particular concernRural poverty is a particular concern

Urban areas show more dynamism… albeit Urban areas show more dynamism… albeit with problemswith problems

As a result of reforms and stabalization measures in the 1990s, As a result of reforms and stabalization measures in the 1990s, the urban workforce shifted out of mining and manufacturing and the urban workforce shifted out of mining and manufacturing and into trade and services, also agriculture (concern). into trade and services, also agriculture (concern). – Accompanied by an expanding urban informal sector, viewed with Accompanied by an expanding urban informal sector, viewed with

unease by GRZ but with hope by many of the urban poor.unease by GRZ but with hope by many of the urban poor.– Some laid off mine workers still waiting for “the good times” to return, Some laid off mine workers still waiting for “the good times” to return,

to be hired on again in the mines to be hired on again in the mines Although the Zambian economy seems to have stablized, urban Although the Zambian economy seems to have stablized, urban

unemployment remains high – LCMS3 reports 14% unemployment unemployment remains high – LCMS3 reports 14% unemployment on average, 18% for the poorest quintile.on average, 18% for the poorest quintile.

Services are better in urban areas: however, sharp welfare Services are better in urban areas: however, sharp welfare gradient in access and many of the poor still lack access to clean gradient in access and many of the poor still lack access to clean water, adequate housing, good health and education services, water, adequate housing, good health and education services, reliable power. reliable power.

Like their rural counterparts, many urban Zambians still wish for a Like their rural counterparts, many urban Zambians still wish for a return to past economic policies and past affluence. return to past economic policies and past affluence.

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Average Years Education of Household Heads, Rural vs. Urban, by Quintile

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Urban

Urban Employment Patterns – Men and Women

Men and Women Men Only

Women Only

1990 2000 1990 2000 1990 2000 Farming 10.1 17.2 10.1 14.4 10.1 23.3 Mining 11.0 5.4 13.5 7.5 2.3 0.9 Manufacturing 14.7 9.3 16.0 10.8 10.2 6.1 Electricity, Gas, Water 1.8 1.6 2.1 2.2 0.5 0.5 Construction 4.8 4.3 6.0 6.0 0.6 0.6 Trade 11.4 24.1 8.7 20.2 20.9 32.2 Transport & Communication 8.8 7.9 10.4 10.7 2.9 1.9 Finance 6.0 4.1 5.3 4.1 8.4 3.9 Health & Welfare 31.5 26.2 27.9 24.1 44.1 30.5 100 100 100 100 100 100

The impact of the long period of adjustment, deteriorating basic The impact of the long period of adjustment, deteriorating basic services, and HIV/AIDS are visible in education and literacy services, and HIV/AIDS are visible in education and literacy patterns: Zambia remains one of the most educated countries in patterns: Zambia remains one of the most educated countries in Africa, despite deterioration in the 1990s. But high levels of Africa, despite deterioration in the 1990s. But high levels of education have not ensured higher prosperity. education have not ensured higher prosperity.

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1910 192 0 1930 1940 1 950 1960 1970 1980Year of birth

Men W om en

Average Years of Schooling by Year of Birth and Sex

Literacy Rates by Age and GenderLiteracy Rates by Age and Gender

   MenMen WomenWomen

Age GroupAge Group 19901990 20002000 19901990 20002000

15-2415-24 8080 7575 7272 6565

25-3425-34 8585 8080 6868 6464

35-4435-44 8484 8383 5050 6161

45-5445-54 7272 8080 2525 4646

55-6455-64 6060 6868 1414 2626

65+65+ 4141 5353 77 1414

All agesAll ages 7777 7777 5757 5858

Concern about risk and uncertainty is widespread, and there is Concern about risk and uncertainty is widespread, and there is little confidence about the Government’s ability (or willingness) to little confidence about the Government’s ability (or willingness) to address it. address it.

Respondents cited multiple and large shocks in the 1990s, that Respondents cited multiple and large shocks in the 1990s, that had pushed them into povertyhad pushed them into poverty

– Weather (droughts, flooding, environmental hazards)Weather (droughts, flooding, environmental hazards)– Illness (malaria, other infectious diseases, HIV)Illness (malaria, other infectious diseases, HIV)– DeathsDeaths– Job loss, long periods of unemploymentJob loss, long periods of unemployment– Livestock theft, livestock deathsLivestock theft, livestock deaths– Price shocks, including consumer pricesPrice shocks, including consumer prices– GRZ’s own policies: reforms in 1990s, spending cuts, policy GRZ’s own policies: reforms in 1990s, spending cuts, policy

reversalsreversals

Virtually no access to formal safety nets, instead depend on Virtually no access to formal safety nets, instead depend on informal systems of support. Strong tradition of community and informal systems of support. Strong tradition of community and family support for most groups in Zambia. However cases cited of family support for most groups in Zambia. However cases cited of these systems breaking down viz. HIV/AIDS, orphans, poverty of these systems breaking down viz. HIV/AIDS, orphans, poverty of elderly, hard economic times. elderly, hard economic times.

HIV/AIDS and PovertyHIV/AIDS and Poverty

HIV/AIDS affects all aspects of society and people in all walks of HIV/AIDS affects all aspects of society and people in all walks of life: Zambia is entering third decade of double-digit prevalence. life: Zambia is entering third decade of double-digit prevalence.

Poverty fosters exposure to HIV/AIDS and HIV/AIDS itself leads to Poverty fosters exposure to HIV/AIDS and HIV/AIDS itself leads to higher poverty levels.higher poverty levels.– Loss of labor, human assetsLoss of labor, human assets– Risky behaviorRisky behavior– Health services overwhelmed, other services (education) also sufferHealth services overwhelmed, other services (education) also suffer– Stigma, breakdown of social capitalStigma, breakdown of social capital

Women, children and the elderly are particularly hard hit: survival Women, children and the elderly are particularly hard hit: survival rates for women plummeted in the 1990s; the number of orphans rates for women plummeted in the 1990s; the number of orphans nearly doubled (to 15% of all children by 2001/02), and over half nearly doubled (to 15% of all children by 2001/02), and over half Zambia’s orphans are being raised by elderly grandparents who Zambia’s orphans are being raised by elderly grandparents who themselves have lost many of their adult children to AIDS and themselves have lost many of their adult children to AIDS and other causes. other causes.

Unfortunate short-term focus in HIV/AIDS support, activitiesUnfortunate short-term focus in HIV/AIDS support, activities

According to the 2001-02 ZDHS, just under 16% of According to the 2001-02 ZDHS, just under 16% of the adult population are HIV+. HIV/AIDS spread the adult population are HIV+. HIV/AIDS spread throughout Zambia, not just in high-risk populations.throughout Zambia, not just in high-risk populations.

HIV Prevalence Rates by Age and Sex, Zambia

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Despite widespread awareness, risky behavior continues: Despite widespread awareness, risky behavior continues: and women are most affected…and women are most affected…

Zambia: Selected HIV/AIDS indicators – 2001/02

HIV Prevalence Rate (%) Knowledge of AIDS (%)

Use of Condoms (Spouse or

cohabiting partner) (%)

Use of Condoms (Non-cohabiting

partner) (%)

Background Characteristic

Female Male

Total Female Male Female Male Female Male

Age 15-19 6.6 1.9 4.6 98.4 94.7 9.5 17.8 28.0 32.5 20-24 16.3 4.4 11.4 99.4 99.4 8.5 16.0 36.0 51.9 25-29 25.1 15.0 20.4 99.6 100.0 6.7 15.0 39.7 46.7 30-39 99.8 99.8 5.1 9.9 31.8 49.3 30-34 29.4 20.5 25.1 35-39 22.6 22.4 22.5 40-49 99.3 100.0 2.2 5.3 15.4 40.1 40-44 17.3 20.5 18.9 45-49 13.6 20.2 16.5

Residence Urban 26.3 19.2 23.1 99.9 99.7 8.2 12.2 45.4 52.1 Rural 12.4 8.9 10.8 98.9 98.0 5.1 8.0 20.4 37.2

Total 17.8 12.9 15.6 99.3 98.6 6.2 9.5 31.2 44.1 Source: Zambia Demographic and Health Survey, 2001-2002, Central Statistical Office, Central Board of Health Lusaka, Zambia and Measure DHS+, ORC Macro, U.S.A

Female Survival Rates by Age, 1980s and 1990s

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

10-14

15-19

20-24

25-29

30-34

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Age Group

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1990s

Life Expectancy in High HIV/AIDS Prevalence CountriesLife Expectancy in High HIV/AIDS Prevalence Countries

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1950-1955

1955-1960

1960-1965

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South Africa

Zimbabwe

Zambia

Uganda

Orphans as a Percent of All Children in ZambiaOrphans as a Percent of All Children in Zambia

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DHS 1992 DHS 1996 DHS 2001

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Zambia’s PRSPZambia’s PRSP

Not prioritized, not well-implemented, not Not prioritized, not well-implemented, not focused on the needs of the poor. focused on the needs of the poor.

No effective monitoring of outputs or No effective monitoring of outputs or outcomes, weak reporting of general outcomes, weak reporting of general implementation. Despite repeated efforts implementation. Despite repeated efforts on part of bilateral donors as well as Bank, on part of bilateral donors as well as Bank, no effective monitoring system was put in no effective monitoring system was put in place. place.

A negotiated document: should this come A negotiated document: should this come as a surprise? as a surprise?

Policy Recommendations?Policy Recommendations? Left to discussions within Zambia: PVA framed the issues, options. Left to discussions within Zambia: PVA framed the issues, options.

Was this the right approach?Was this the right approach? Key policy concerns:Key policy concerns:

– Rural poverty: structural impediments in the ag sector, reluctance of Rural poverty: structural impediments in the ag sector, reluctance of private sector to engage (viz. vaccines, fertilizer), high levels of risk, private sector to engage (viz. vaccines, fertilizer), high levels of risk, costly inputs, poor transport.costly inputs, poor transport.

– Weak and ineffective govt, high levels of corruption. Seen as Weak and ineffective govt, high levels of corruption. Seen as pandering to the better off and more powerful. pandering to the better off and more powerful.

– HIV/AIDS is a pervasive problem that will not be solved by better HIV/AIDS is a pervasive problem that will not be solved by better access to ARVs. Donor support has thus far been ineffective. What is access to ARVs. Donor support has thus far been ineffective. What is next? What is the Bank’s comparative advantage.next? What is the Bank’s comparative advantage.

– Zambia’s first PRSP was poorly designed (if focus is poverty reduction), Zambia’s first PRSP was poorly designed (if focus is poverty reduction), not prioritized, unevenly implemented. Will the next PRSP/5not prioritized, unevenly implemented. Will the next PRSP/5th NDP th NDP be be any better?any better?

Zambia has achieved stabilization and recovered from long period Zambia has achieved stabilization and recovered from long period

of deterioration. But some doubt that future growth path will be of deterioration. But some doubt that future growth path will be broad-based, inclusive of poor. E.g. decision to focus on “winners” broad-based, inclusive of poor. E.g. decision to focus on “winners” in rural areas: in rural areas: is this the right decision?is this the right decision?

LessonsLessons The Zambia PVA was not a large success, despite many The Zambia PVA was not a large success, despite many

“small successes”. Plagued by problems common across “small successes”. Plagued by problems common across all AAA, also common to PAs.all AAA, also common to PAs.– Timing determined by exogenous factors, viz. FY deadlines, Timing determined by exogenous factors, viz. FY deadlines,

need for core diagnostics. Factors force Bank to power need for core diagnostics. Factors force Bank to power through issues rather than resolve them (ref. poverty lines, through issues rather than resolve them (ref. poverty lines, lack of appropriate counterpart). lack of appropriate counterpart).

– No clear WB follow-up actions, esp. lending, linked to the No clear WB follow-up actions, esp. lending, linked to the report. report.

– Uneven ownership of the CT, even more uneven ownership of Uneven ownership of the CT, even more uneven ownership of GRZ (poverty not high on their list of priorities). Which GRZ (poverty not high on their list of priorities). Which Ministry is responsible for poverty? In contrast, strong support Ministry is responsible for poverty? In contrast, strong support from international community, NGOs, other stakeholders in from international community, NGOs, other stakeholders in Zambia Zambia

– Evolving role of WB in ZambiaEvolving role of WB in Zambia– Dissemination still pending (!)Dissemination still pending (!)

How could it have been done better? (factors we control, How could it have been done better? (factors we control, factors we don’t)factors we don’t)