The Zambia economy had changed dramatically twice since independence in 1964; first, by the UNIP government under Kenneth Kaunda, then by the MMD government under Frederick Chiluba.
Initially, the economy of the country was a liberal one just after independence in 1964. The UNIP government nationalized major industries and declared the country a socialist state under one party rule in the early 70s.
The economy became a state controlled one and most industries did not run up to expectations of the majority. Lack of re-investment in the industries led to low production and inefficiency. The dependence on copper by the Zambian economy had a devastating effect on the economy when there was a fall of prices in the commodity on the world market.
Zambia at independence was among the richest countries in sub-Sahara Africa. With copper, the countries major export, enjoying high rates on the market, the country had the necessary resources for development. But lack of investment in the sector, eventually led to low levels of copper output. The country started experiencing high levels of unemployment and underemployment.
Revenue from other sectors of the economy could not offset the status quo. The country had food shortages which lead to riots in the 1990s. The UNIP government was forced to hold multiparty elections in 1991. The party lost to the MMD (Movement for Multiparty Democracy), and Frederick Chiluba became President.
Under the Chiluba government, the economy of the country underwent massive economic reforms. State industries including the huge state conglomerate, ZCCM were privatized. ZCCM (Zambia Consolidated Copper Mines) was sold as separate entities.
The privatization process brought the much needed foreign investment in the country. But a lot of companies which were a drain on national resources like Zambia Airways (the national carrier) and UBZ or the United Bus Company of Zambia was liquidated, putting a lot more people on the streets. Some lucky companies were just downsized.
The rising copper prices have led to a renewed interest in the Zambian mines. The Chinese have acquired several businesses in the country especially in the mining sector. New and recently opened mines are pushing upward total copper production.
The economy has been growing at a rate of 5 percent since 2009. The Lumwana copper mine in Solwezi has been a big contributing factor in the increase in copper output. Mulyashi open pit mine in Luanshya once fully operational is another Chinese investment that will greatly make a difference in the economic outlook.
The incumbent President, Michael C. Sata has emphasized the need for economic diversification if the country is to sustain the GDP growth. The tourism and agriculture sectors have all shown increased growth of late. These are areas with potential to turn round the country’s economic fortunes.
New hotel chains have opened in the country increasing bed capacity in the hospitality industry. Among such ones are The Royal Zambezi Sun hotels in Livingstone, Protea hotels in Lusaka, Livingstone and Chingola. Zambia has been recording increases in the flow of tourists of late. This has translated into an increase in the number of inbound tourists for two successive years.
With the continued inflow of foreign investors in the Zambian economy, the country is poised for an economic rise in the near future.