Fitt-copy RESTRICTED Report No. AE- 19a This report is for official use only by the Bank Group and specificaUy authorized oranizations or persons. It May not be pubLshed, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibilty for the accuracy or completeness of the report. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION MEMORANDUM ON RECENT ECONOMIC DEVELOPMENTS IN ZAMBIA July 28, 1971 Eastern Africa Department US SI - Ivacha 0.731- Kwachaj. 3 US $1.40 1uacha 1 - 100 ng Ilong TGn 2,a24ibs. 1 Shoi tTon 2,000 lbs. 1 Long m - 1,016 -etric Ton 1 Shor Ti * QM.907 Mtric Tons NEMORANDUM ON RECENT ECONOMIC DEVELORFENTS IN; ZAEBIA Table of Contents Pa&e No Basic Data . . . . . . . . . . . . . . . . . . . . Map ........... ............ ................ Introduction ... .. . ..... .wO . ......1 General Background ... O.* .O.**.*... ... O.*. 1 State Participation ................. ....... 2 The Copper Price . . .*..*. *.*. a. .0 * 3 Recent Economic Developments ..... . 4 Overall Growth *.............. . l. Mining ................. Agriculture ....... . f 5 Mamnfacturing .e.*....@..@* * **..**..*.e*t.*o 6 The Tan-Zam Railroad * 6 Employment, Wages, and Prices ., 6 Public Finance ........ .7 External Payments ............................. 11 External Debt and Creditworthiness 12................ 1 Appendix - Statistical Tables ............ .00..* This paper is based on the findings of a visi.t to Zambia by Mr. Willem Haane in February, 1971. ZAMi"I A 13A''IC lD'['A Area: 2C91,000 square miles, or 7?3,Ut. q square km Population (1969): h 4, oE5h, 00o Rate of growth: 2.5 percent, Densi ty: Ii per sq. mile, or 2 per sq. km Political status Independent since 196L4; member of the British Commonwealth. Gross Na;ional Frdie zct (F, Es t : Y 9j ,1.CI60 mil;:on ('3r1,6A 25 rmilli!ion) Per capita: $L00 Rtate of gmawt,h 1965-1969 at conistait, prices including improvement terms of trade: 13% excluding improvement terms of tracde: 5.6% Percent of CGIP 1965-1068 uross investment 31% Gross savings 36% Covernment recurrent revenue 33% Exports of goods and services 60% Percent of GDP at factor cost 1968 Agri cul tu re 7% Mining h2% Manufactu ring 8% Construction 7% Pblitc utilities 1% Trarle 12% Government administration 5'( Other services 18% Money, Credit and Prices Average Dec. 1970 annual increase 19W7- 70 Total money supply (K million) 7409.7 29% Libmestic credit to private sector (K mill.Jon) 137.0 26% Cost of living index 5,7% Public Sector Operations (K million) (Central Government onl.y) 1968 1969 1970 Recurrent receipts 306 401 737 R'ecurrent expenditure 226 213 27h Surp]-us B0 168 158 Capital expendr(iture 193 1%56 15 Overall position -111 +12 +3 External Pub,Lic Debt ($ milli on) Total debt (including undisburned) at December 31, 1969 275.6 'rotal debt service (1970()) 28.14 Debt service ratio (1970 esLimate) 2.9% Balance of Paynents ($ million) Est. Est. 1968 1969 1970 Merchandise exports 7I0 1,050 970- Merchan(lise imports 518 505 530 Services, net -238 2h0 250 Balance on current account +10 +305 +160 Foreign aid disbursement-,s 50 n.a. n.a. Commodity Concentration of Exports (1969) Copper: 95% Official Forer Exchange Reserves Dec.1968 Dec.1969 Dec.1970 $ million 199.3 368.7 509.2 Montil's imports )l.6 8.8 1].6 IMF Position ($ million) Apr.1971 'fotal gross position 959.0 D)rawings none bank./IDA Operations ($ miLLion; as of Apr.30, 1971) ITPRD loans comnaitted 168.2/a di ssJursed 92.9 IDA credits none /a Net of $3.3 mil]liorn cancellations. T A N Z A N I A O I' ~ - ~EsGvr MvulunguMBALA4////' Z A M B I A 0 ; - M-,y // fl/ L) /; A N )~G O L A 7*-GAC.t '-, R r H1 T E R HN-R-M\qI; U5,*/_'&(2 I N Balorole r Kosemoo ,, C OYPP R OELT | j ""' ;" 3 ....... ...... " '' ''"" ' . ......... \ ... ' .' ' '"' '"' ""' '> t :... ,........../...9 ...... ...... z .. ........ i W~o~C EozQbo S T E P H , - V ; I ,t/,Ks , r/ ' : ow9 j =_ ,.. .. . \ i ,,. \ > t ~~~~ ~ ~ ~~~~~~~~~~~~~~~~~~~Mor,ze WESTourERNR 5 C U 7 H/E - - - \ \< Scsnc.e '' t. 01 ' i C K~~~~~~~~K[ \S _* -i--I N-o > / j _ _ _~ ,, A 5 ' F _ + _ , Ll i rJsro aE JSLO UTHER N 5 0 t_- 5s ., \ \. < RHO DES I A ISBURY B 0 T S 1 / W A N A * ___ \ S_, - U1 5WatCI C s = 1 3 Introduction 1. The Bank's last economic report v/ reviewed the cciuntryls economic development between independence in 1964 and th.. kginning of 1970. The present memorandum, which is bacid on a briet visit in February, discusses the major developments since laLst year's report. General background 2. Zambia is a landlocked country in the center of the southen half of Africa. With an area of 753,000 sq. km. (291,000 sq. m.) and 4.1 million inhabitants, the country is sparsely populated. The economy is dominated by the copper industry, which contributes more than 40 per- cent of GDP, 60 percent of government revenue, and 95 percent of exports. Between 1964 and 1969, real GDP increased by 13 percent a y_ar, of which 5.5 percent was the result of a physical increase in product.`. and 7 percent thie result of an improvement in the tenms of trade. GNiS -oe.v capita is estimated to have reached a level of abouit $ 400 in 1969. However, there is a distinct division -- accompanied by large income disparitios - between the modern economic sector and the traditional rural sector. The economic activity of the modern sector is concen- trated in the Copperbel t Province, where the mining industry is located, and along the "line-of-rail", which is the central area of the country between tle Copperbelt and Livingstone in the south where the Buropean farmers settled and a number of secondary industries have been established. About half of the population lives in the Copperbelt and near the lAne-of-rail, and is involved in the modern economy. The rest of the popxlation is scattered over the country and is mainly engaged in Bmall scale agriculture. 3. Since independence, the government's economic goals -- laid down in the First National Development Plan -- have been to diversify the economry to make it less dependent on the copper industry, and to narrow the gap between urban and rural incomes by increasing the productivilty of traditional agriculture. As a result of sharp increases in manufacturing and construction output, the economy has become somewhat less dependent on mining since independence. On the other hand, the agricultural sector did not grow at all, and the gap between urban and rural incomes has widened. 4. An important reason why the agricultural sector received so little attention was that in recent years Zambia's economic course was largely determined by a number of external and internal forces, which disrupted the pattern of priorities set out in the Plan, and which placed a great strain on the administrative capacity of the country. The most important external political factor was Rhodesia's urnilateral declaration of independenoe (UDI) in November 1965, and Zambia's v/ Economic Position and Prospects of ZambiaJ, AE-8a, June 24, 1970 - 2 - consequent dec .sion to disengage itself from Rhodesia, on which country it had been dejendent for its trade routes and as a source of imports. The govermaent started an investment program to reorient the trade to Dar es Salaam, and to make the country more self-sufficient for vital inputs. By building an oil pipeline to Dar es Salaam, upgrading the road to the north, developing local coal resources, and establishing a number of industries to substitute imports, Zambia's dependence on Rhodesia has lessened considerably. 5. Internally, the govermnent has to cope with strong tribal and regional forces. In attempting to preserve national unity, key personnel in the different ministries are frequently changed, which hampers con- tinuity in economic decision making. The government has decided to draft a Second National Development Plan for the period 1972-1976, but work on it has hardly started. As was the case with the first Plan, one of the main objectives will be to narrow the disparity between urban and rural incomes by improving the productivity of small-scale agriculture. State Participation 6. The First Plan was basically a public expenditure program. The government recognized that it had little direct control over the large, foreign-owned private sector, but it indicated its desire for a greater degree of collaboration between the private sector and the government. Gradually the government became dissatisfied with the performance of the private sector, in particular with respect to Zambianization and the reinvestment of profits, and in the beginning of 1968 it announced that controlling state participation would be the future pattern of industrial- ization in Zambia. In April 1968, a large number of foreign manufactur- ing, commercial, and transport enterprises were invited to accept 51 per- cent state participation. In August 1969, the government announced its intention to take a 51 percent e(quity parLicipation in the two mining companies. 7. The negotiations between the private companies and the govern- ment proceeded smoothly and were concluded to the satisfaction of both parties. The managements of the companies in which the government took a majority participation were retained, and the statutory bodies which handle the government's participation (fINDECO for non-mining companies and MINDECO for mining companies) exercise only a broad control. The non-mining cQmpanies were compensated partly in cash, partly by govern- ment obligations to repay the rest of the agreed take-over price within a limited period of time (in general less than five years). The mining companies were ccmpensated by a 6 percent MINDECO bond issue, uncondition- ally guaranteed by the government, the par value of which (US $ 292 million in total 1/) represents 51 percent of the copper companies' assets &t book value. In addition, the copper companies negotiated favorable 1/ US $ 175 million repayable in 12 years for one company, and US - 117 milllon re,aya1]e in 8 yea-s io-r the othc-. - 3 - management contracts, and restrictions on dividend remittances were lifted. Also, they were allowed to repatriate K 60 million accumulated cash reserves, of which, however K 25 million will be reinvested over the next four years. 8. In Novwriber 1970, President Kaunda announced further state participation, this time in the financial sector of the economy. The measures included: (a) 51 percent state participation in the private banks, and a merger of the existing five commercial banks into two new banks; (b) The establishment of a State Insurance Corporation which would take over the business of the existing insurance companies; (c) Complete take-over of the building societies; (d) The establishment of a new government-owned holding company (FINDECO) which would handle the state-participation in al1 financial institutions. 9. At this moment, FINDECO has not yet been formally established. Nevertheless, the government has completed negotiations with the insurance companies and the building societies. The State Insurance Corporation has taken over all insurance business in Zambia; however, the former private insurance compunies now work as agents for the State Insurance Corporation at a broker's fee. The former companies did not receive any compensation becaLuse they had hardly any assets within the country. The building societies were not fully taken over as originally intended, but the government has bought out the "controlling expatriate shareholders". They were compensated in cash, but the amounts involved were small (in total about $ 700.000). 10. The negotiations with the commercial banks are still going on. It is reported that the banks are prepared to accept 51 percent state participation, but that they are not prepared to be merged into two new banking groups. Other important outstanding issues are the amount of compensation and the foxm of management contracts. The Copper Price 11. Up to the beginning of 1970, world copper prices remained very high, which has placed Zambia in a strong financial posiL.ion. However, the world copper price fell from 70 US cents a lb. to 47 US cents a lb. between May and December 1970. During the first half of 1971, the copper price fluctuated around 50 US cents a lb. The sluggishness of the U.S. economy, and the absence of purchases of copper by Russia and the People's Republic of China have been cited as the m;-d.n factors behind the fall in prices. The recent course of the copper price cJces riot sesm. to necessitate a revision of the price forecast in last year's eco!oxKc report that the price would Drobably settle in th.e long rina at about - 4 - 50 cents a lb, but, because of the great uncertainty surrounding the copper price, the consequences of both higher and lower prices for the government's budget are discussed below. Recent Economic Developlments Overall Growth 12. Between 1964 and 1968, GDP at constaxnt market prices grew by an average of 12 percent a year, of which 5.5 percent was the result of a physical increase in production, and 6 percent the result of an improvement in the termg of trade. National account figures after 1968 are not yet available. However, on the basis of short-term economic indicators, such as production, trade, and copper price statistics, it tray be estimated that in 1969 GDP in real terms increased by about 17 percent, of which 6 to 7 percent physical production and 10 percent a further improvement in terms of trade. The main contributor to this growth was the mining industry, whose output increased by 12 percent, and accounted for 5 percent of the GDP growth. Also, the output of the agricultural sector showed an increase over 1968. In 1970, however, real GDP has most probably declined somewhat as the output of both mining and agriculture were lower than in 1969, and, owing to the fall in copper prices, the terms of trade must have deteriorated. Mining Table 1: MINERAL PRODTJCTION, 1966-1970 (1000 metric tons) Estimate 1966 1967 1968 6 1970 Copper 586 616 665 747 700 Zinc 42 45 53 50 54 Lead 19 20 22 23 27 Cobalt 1.5 1.4 1.2 1.8 1.9 Source: Monthly Digest of Statistics 13. The fall in mineral output in 1970 was due to a cave-in in September 1970 at the 14i4fulira mine, which accounts for about 25 percent of Zambia's copper output. Production had by end 1970 been partially resumed, and the mine is expected to be in full operation again by the end of 1972. The loss of production over 1970, 1971 and 1972 is tentatively estimated at 100,000 metric tons. Meanwhile, the copper companies continue to carry out their expansion plans for other mines, whi.ch may boost copper production to some 850,000 metric tons by 1974, Asgiculture 14), Over the last five years, livestock production has increased, but; crop production has fallen. As a result, total output of the agricultural sector has remained unchanged (table 2). Table 2: VALUE OF AGRICULTURAL OUTPUT a/, 1966-1970 Kwacha million; at constant 1968 prices 1966 1967 1968 1969 1970 Crop sector 18.5 17.4 14..8 15.0 10.5 Lives-tock sector 8.1 8.7 10.0 11.7 12.1 Total 26.6 26.1 24.8 26.8 22.7 a/ Excluding subsistence sector Source: Mission estimates on the basis of data provided by the M'1inistry of' Rural Development 15. Bright spots within the crop sector were increases in production of sugar and cotton, but these were not sufficient to offset the sharp fall in maize production. M4aize production fell from more than 4.1 million bags in 1966 and 1967 to less than 1.4 million bags in 1970. In 1967, Zambia still had an export surplus of almost 1 million bags, but had to import more than 2 million bags in 1970 to cover domestic needs. The main reason for this decline in production is the continuing departure of expatriate farmers, whose number decreased from about 1,200 at independence to probably not more than 600 at present. In 1970, the situation was aggravated by bad weather and the failure of the lNational Agricultural Miarketing Board, which since 1969 has :ri -ri ;ui( right to distribute seed and fertilizer, to make the necessary inputs available in time. 16. In the livestock sector, there was a decline in beef production, which was, however, more than compensated by an increase in production of poultry and eggs. The decline in beef production was again clue to the departure of expatriate farmers. The increased poultry production was the result of active propaganda and extension efforts in particular among "Women's Poultry Clubs". Production of poultry meat uilcreased from less than 1,000 tons in 19614 to over 6,000 tons in 1970. Egg - 6 - production increased from 17 million to 100 million over the same period. Zambia is now self-sufficient for both poultry meat and eggs. 17. Since independence,, the government's agricultural policy has not really succeeded in stimuilating production by Zambian farmers. In order not to exacerbate what the government considered a regional imbalance, expenditaxres in agriculture were thinly spread over the country, rather than concentrated in the better-endowed provinces, and did not have much impact. The government has now announced that during the Second Plan (1972-1976) it wishes to concentrate its efforts in a limited number of areas with sufficient potential (so-called Intensive Development Zones). However, concrete plans have yet to be worked out. The government also wants to establish a number of State farms on land abandoned by expatriate farmers tc* increase production of maize and beef. Manufacturing 18. The manufacturing industry which had grown by 18 percent a year between 1964 and 1968, passed through a slight recession in 1969. This was probably caused by the anti-inflationary measures taken by the government in April 1968 which limited the availability of credit. Towards the end of 1969 these measures were relaxed, and preliminary figures indicate that since did 1970 manufacturing production has picked up again. Large industrial projects in the offing include an oil refinery and a car assembly plant. The future of the planned iron and steel mill is still uncertain. This project (costing K 40 million), the viability of which is not yet. clear, has been under consideration for some time, but it is now meeting strong opposition within the government, and the likelihood is that it will be shelved. The Tan-Zan Railroad 19. In July 1970, the governments of Zambia, Tanzania and the People's Republic of China signed an agreement by which China undertook to build a 1000-mile railroad between Dar es Salaam and the Copperbelt. China provided an interest-free loan to the two states of K 286.6 million (US $ h01 million) for the construction of the track and for rolling stock, repayable over 30 years between 1983 and 2013. The loan, which is shared equally by Zambia and Tanzania, is intended to cover both foreign and local costs. Part of the local costs, however, will be paid from the proceeds from selling Chinese goods, the import of which will also be financed by the railway loan. The railroad is due for completion in 1976. Employment, Wages, and Prices 20. The growth in wage employment, which had been very fast between 1964 and 1968, slowed down considerably in 1969. In 1970, how- ever, total employment started growing again (table 3). - 7 - Table 3: WAGE KIPLOYM T, 1964-1970 (1000 persons) Total African Other hmployees E6nDloyees 1964 268.7 37?.C' 31i.7 1968 (June) 354.7 325.8 28.9 1969 (June) 356.2 327.3 28.9 1970 (June) 372.1 344.7 27.4 Source: N[onthly Digest of Statistics The largest increases in employment in 1970 took place in the construction sector and in government services. Employment in agricul- ture continued its downward movement. 21. Wages increased very sharply between 1964 and 1968: for African employees by an average of 20 percent a year, and for other emiployees by 10 percent. The government, who had become concerned about the sharp increase in labor cost, announced a temporary wage freeze in August 1969. In January 1970, and again in January 1971, the government permitted wage increases of not more than 5 percent. Although the govern- rnent has no effective instrument to control wages, the general impression is that i<'s directives have been followed by the major industries. The conswuer price index, which had increased by 10 percent in 19689 increased by only 4 percent in 1969 and 2.5 percent in 1970. Public Finance 22. In 1967 and 1968, the government increased its recurrent and capital expenditures very rapidly. Despite increased tax revenue fron rising copper prices and a stiffer tax regime, the overall budgetary position deteriorated. Iuch of the increase in expenditure was related to Rhodesia's unilateral declaration of independence in November 1965. After 1968, when the peal of emergency spending was reached, the govern- ment set a firm limit on recurrent expenditures and trimmed its capital oxpenditures. Expecting lower copper prices, the government did not want to set its expenditure at a level that might not be sustainable in the long run. This cautious budgetary policy is reflected in the 1969 and 1970 budgets. However, as copper prices continued to rise, and the financial position of the country improved beyond expectation, it became difficult for the government to turn down the demands of spending ministries. Also, the government decided to step up its defence expend- itures, and a bad maize crop in 1970 led to much higher subsidies for imp)rted maize. As a result, the actual level of recurrent expenditures in 1970 was 12 percent higher than what was provided for in the budget and the 1971 bidget shows a furthler increase of 20 percent (see table Table 4:. CENTRAL GOVERNMENT BUDGETA1RY POSITION, 1968-1971 (Kwacha million) Mission Budget Actual Budget Estimate 1968 1262 1970 1970 2L71 1971 Recurrent revenue 306 401 334 432 346 370 Recurrent expend- iture 226 233 24b 274 329 Surplus on current account 80 168 90 158 17 40 Capital expenditure 193 E 142 15 173 155 Financing surplus or deficit -113 + 12 - 59 + 3 -156 -115 Financed br: Domestic resources 44 31 34 38 41 45 Foreign long-term capital inflow 47 23 29 22 31 30 Draw down (-) or buildup (+) of assets - 22 + 66 + 4 + 63 - 84 - 40 Source: Ministry of Finance and lission estimates 23. According to the 1971 budget, the surplus on current account would decrease from K 158 million in 1970 to K 17 million in 1971. Cap- ital expenditure in 1971 is estimated at K 173 million, and the resulting financing deficit would be covered by domestic and foreign borrowing (in total K 72 million) and a draw-down of accumulated reserves (K 84 million). 24. It is quite likely, however, that the financial results in 1971 will turn out to be more favorable than the budget estimates. As has consistently been the case in the past, the estimate of reculrrent revenue -9 seems to be on the low side. The govermnent assumes an average copper price of 50 US cents a lb. in 1971, but even then recurrent revenue might be K 20 to K 30 million higher than the budget estimate. Also, the estimate for capital expenditure (K 173 million) seems optimistic. This progran consists for a large part of projects that were not completed daring the First Plan period (1966-1970). These proJects appear for their full unspent, authorized amount in the 1971 budget, without regard to their state of execution or preparation. Officials in the I4inistry of Finance e>:pect actual capital expenditure in 1971 to be about K 20 million lower than what is budgeted. The last colunm of table 4 gives the ndssicn's estimate for the 1971 budget. It seems likely that the draw-down of assets can be limited to some K 40 million. 25. The last economic report gives a projection of the govenment's budgetary position in 1974. It estimated that with a copper prilce of 50 US cents a lb. and given an increase of recurrent and capital expend- iture of 5 percent a year after 1970, the overall financing deficit would be about K 25 million in 1974, which could easily be financed by foreign borrowin.g. The actual course of recurrent expenditures in 1970 and the budget estimates for 1971 make a revision of this projection necessary (table 5). 2alLe 1: PRO;C Tlvi, (Ai CENZ,.tDL Lu v1Ei2T B3UDGETARY POSITION 1974 1970 1971 Alternatives Copper price (US cents a lb.) 64 50 40 50 60 (million Kwacha) Recurrent revenuef 12 S 310 I/ 5(0 From mining sector 251 180 70 165 260 Other recurrent revenue 181 190 240 240 240 Recurrent expenditure 274 a 370 Surplus on current account 158 40 - 75 35 130 Capital expenditure 15 15 180 180 180 Financing surplus or deficit + 3 -115 -255 -145 - 50 Domestic borrowing and loan roooveries 38 45 Foreign borrowing 2 0 / See para. 29 Source: i4-irsion es;timatos. - 10 - 26. Uncertainty about copper prices, and the fact that the government has not yet decided on the level of government spending in the Second National Development Plan (l972-1976) mean that any budget projections must be merely illustrative. At a copper price level of 50 US cents a lb., recurrent revenue in 1974 may be about K 405 million, as compared to K 370 million in 1971. Revenue from the mining sector is likely to be lower than in 1971, when it was influenced by the high profits in 1969 and 1970. Revenue other than from the mining sector, however, may continue to increase. Total revenue will be about K 95 million higher with a copper price of 60 US cents a lb; K 95 million lower when the copper price i9 40 US cents a lb. 27. Half of the increase in recurrent expenditure between 1968 and 1971 has been due to increased spending for defence and an increase in subsidies for imported maize, which in turn was the result of bad harvests (table 6). Table 6: RECURRENT EXPENDITURE, 1968-1970 (Kwacha million) 1968 1969 1970 Budget - - 1971 Total recurrent expenditure 226 233 274 329 of which: Defence 15 10 23 53 Maize subsidies - 3 8 11 Other recurrent expenditires 211 220 243 265 Source: Mission estimates 28. Defence expenditures are estimated to be very ligh in 1971 because of a once-for-all purchase of certain equipment. After 1971, defence expenditures should be lower, but probably not as low as in 1968 or 1969. Subsidies on imported maize were very high in 1970, and will continue to be so in 1971 because of a crop failure in 1970. With a normal harvest, the subsidies should decrease again. All other recurrent expenditures increased by an average of 8 percent a year between 1968 and 1971. Assuming the same rate of increase between 1971 and 1974, and assuming levels of defence expenditure and maize subsidies in 1974 of K 30 million and K 5 miUlion respectively, total recurrent expenditure may then amount to some K 370 million in 1974. Preliminary calculations for the Second Plan indicate an average annual level of capital expend- iture of about K 180 million, K 30 million of which would be for the Tan-Zam railway. Given total government expenditures of K 550 milllon in 1974, and recurrent revenue of K 405 mi-lion, the financing deficit - 11 - would be K 1h5 million, which should not be too difficult to cover. With drawings from the Chinese railway loan, to+aJl domestic and foreign borrowing could easily be increased from the estimated K 75 m L.LL.Lin 1971 to about K 100 million in 1974. Also, if necessary. T.ie government could raise non-copper taxation corisiderabl-, as the levei of indirect taxation is still very low. There is no sales tax, and customs duties are on the average not more than 10 percent of tte import bill. 29. Zambia would min into serious financial difficulties if the longer-tern level of the copper price turned out to be no more than 40 US cents a lb. At that price, MINDECO will not be able to pay the full amount of debt service on the MINDECO bonds from the dividends on its participation in the copper industry, which would mean an added burden of some K 15 million a year on the government's budget. The government would almost certainly have to cut down its expenditure in order to achieve a manageable overall budget deficit. External Payments 30. Balance of payments statistics for years after 1968 are not yet available. The table below gives estimates for the balance of pay- ments on current account in 1969 and 1970 on the basis of trade statis- tics and partial information on payments for services from the Bank of Zambia. Tabl,1: BALANCE OF PAYMENTS ON CURRENT ACCOUNT, 1967-1970 (Kwacha million) E?6 196 8 ,1962 27 Merchandise exports 465 533 750 670 Merchandise imports 362 0 380 Trade balance 133 163 390 290 Services, net 1/ -123 1; 7 180 Balance on current account 10 7 220 110 1/ Including factor services Scurce: 1967 and 1968 DF Balance of Payments Yearbook, 1969 and 1970 Mission estimates 31. The decline in exports in 1970 was due to lower copper production after the cave-in at the Mufulira mine, and a fall in the - 12 - copper price from an average of 66 US cents a lb. in 1969 to 64 cents in 1970. Total imports have probably increased as a result of higher imports of food (maize) and machinery and equipment. 32. As a result of the favorable balance of payments position, Zambia's foreign exchange position has inproved considerably over the last few years (table 8). Table 8: EXTERNAL RESERVES OF MONETARY AUTHORITIES, 1967-1971 ($ million) Dec. Dec. Dec. Aug. Dec. 1967 1968 1969 1970 1970 Bank of' Zambia 96.3 134.2 238.7 460.7 397.9 Government 65.1 130.0 134.4 111.3 Total 180.3 199.3 368.7 595.1 509.2 Source: IiF International Financial Statistics 33. Foreign reserves reached a peak in August 1970. Since then they have fallen, but at the end of 1970 they were still equivalent to almost a year's merchandise imports. Part of the decline in reserves after August 1970 is due to an "externalization" of liquid reserves by the copper companies (in total US $ 60 million) which the government allowed as part of the agreement on government participation in the copper industry. External Debt and Creditworthiness 34. The Zambian authorities have not yet submitted their external public debt reports for 1970 to the Bank. At the end of 1969, the external public debt outstanding amounted to $ 276 million, of which $ 200 million was disbursed. Service payments on this debt amounted to $ 28.4 in 1970, or 2.9 percent of export earnings. Provisional infor- mation indicates a sharp increase of extermal public debt during 1970 to about $ 810 million by the end of the year. Service payments on this debt will anount to about $ 68 million in 1971, or 8.2 percent of estimatedi export earnings. 35. Mviost of the increase in debt is the result of the government- guaranteed I4NDECO bond issues ($ 292 million) to compensate the copper companies for the govemment's equity participation, and the Chinese railway loan ($ 200 million). Service paynents on the ltINDECO0 bonds amount to $ 140 million a year through 1977 and $ 20 million a year from - 13 - 1978 through 1981. Since these payments will be made out of .t4vidends, they do not present an extra burden on the bidget, as lor- aX, the copper price does not fall below 48 US cents a lb. Also, the net effect on the balance of payments of the compensation payments is less than the total amounts suggest to the extent that interest payments on MINDEOC bonds replace dividend payments that the copper oompanies would otherwise have remitted abroad. Service payments on the Chinese railway loan will be $ 6.7 million a year from 1983 through 2012. The debt service obliga- tions on the total existing debt, including the MINDECO bonds and the Chinese loan, are estimated as follows (table 7). Table 7: ZAMBIA'S DEBT SERVICE OBLIGATIONS Total debt service Year million $ % of exports a 1973 68 7.2 1978 45 4.1 1983 23 1.8 /a Based on a copper price of 50 US cents a lb. through 1983 and an average annual increase in the volume of copper exports of 3.5 percent. Source: Mission estimates. 36. Since the level of government capital expenditure in the Second National Development Plan is not yet known, it is difficult to estimate whaLt new public debt Zambia is likely to incur. The need for foreign capital inflow does not depend on capital expenditures only, but also on such imponderables as the vageries of the copper market, and the government's ability to keep current expenditure downi and to raise its non-copper tax revenue. At present, it does not seem likely that in the rnear future the government's need for new foreign capital will surpass $ 50 million a year. To illluztrato, If t're government contracts $ )50 million of new debts a year through 1983 at present IBRD terms, then Zambia's debt service ratio would increase to about 8 percent in 1973, 7 percent in 1978, and 6.5 percent in 1983. It would appear that Zambia remains creditworthy for lending on conventional terms. APPENDIX STATISTICAL TABLES Table No. 1.1 Population of Zambia, 1963 and 1969. 1.2 Wage employment by industrial sector, 1965-1970. 2.1 Expenditure on gross national producbt at current market prices, 1964-1968. 2.2 Expenditure on gross national product at constant market prices, 1964-1968. 2.3 Industrial origin of gross domestic product at factor cost, 1964-1968. 2.4 Q Gross fixed capital formation, l964-1968. 3.1 Balance of payments, 1964-1968. 3.2 Exports of principal commodities, 1965-1969. 3.3 Value of imports by S.I.T.C. sections, 1965-1969. 14.1 External public debt outstanding, December 31, 1969. 4.2 Estimated future service payments on external public dabt outstanding, including undi6bursed, 1970-1984. 5.1 Central government recurrent revenue, 1965/66-1970. 5.2 Central government recurrent expenditure by type of service, 19614-1968. 5.3 Central government capital expenditure by type of service, 1964-1968. 6.,1 Liabilities and assets of the Bank of Zambia, 1965-1970. 6.2 Commercial banks' advances by borrower group, 1965-1969. 7.1 Sales of tobacco, 1966-1970 7.2 Purchases of agricultural produce by the National Agricultural liarketing Board, 1965/66i-1970/71. 7.3 Recorded commercial cattle slaughterings, 1965/66-1969/70 8.1 Mineral production, 1966-1970. 8.2 Manufacturing production, 1965-1969. 9.1 Average anrual earnings by industry, 1965-1969. 9.2 Consumer price indices, 1962-1970. ab:>le 1 .1: 1oPULJLATIGN OF AIVlIIIh, '9 963 anril 1.?69) ( Crous w-i (i of Pcx or. CIo ) *June 1.963 August 1.969 Piercen t Province census cernsus change over _1(63 census CenitraIL L;' 70 2 C opperbel L +4hh 13.5 C^Iou ther-n YLIo b99 '-7L si! total provinnes on tlhe line-of-rail 2,022 Iastern IJ o 5c09 6.0 Luapula 3-3 3 3 _ 5. 3 Nortlh-iestern 2-1-1. 227 2 7.6 Northern 5615 - Wes tern .jj363 LIZ j sub total other provinces 1,75 2,u2 Total population 3,)I9c; h,0+!; 16.2 2,ource: Monthly Digest of 1tati.stics, January 171. ITaible 1.:2: WI'GI'G; M .I 3q;IENI IN II'hJ.I, ;IPI1QR, 1965-:LV70) ( inloull:;ir(i:i )oi pd;ci; prli pr.Eod) I 9365, .1966 1 I12L -]/2J') 21L; 10.'rican employees Ag rimaul iLre fove.t y, I -;h op ( 0 I- i5. 9 3)4.1 31.5 31.9 ill,i,rlSr n,uar''.il''ryilug 1W 8 47 .6 )18. 5(.l 51.1 WI lanu.racturing 23 h 1 9 30.5 31.5 3L.1h 33.9 Uor ;1.ruiction 1b9 .,) 6 64.6 6i1-. 57. '8 66.1i Pub])ic- ui,i tie,: 3 6 3 31 )l 2.4/a 2.0 (:oimile rca 19.5 2 1 21..0 25.3 30.3 28 .9 "''anc:orsL (:ormimunical,lonm 10.1 18.1 17.9 20.7 1'9., 20.8 je! ~vi L:s ((-cxcl. dojiles5 ic) b .0 50.0 5. -9 63.7 70.9 72.8 Diorrnr) ti c services 3.0S 35.0 O.0 35.0 35-0 Po Ial 266.'; 307 .4 3-1.Y 321h14T 335.0 3Th) .'7 Wther employees AgricIIILure, forestry fii;hting 0.8 (.5 (.5 O. 5 0.5 0.), !;i)ing, minurry1ing 7 7.2 6.4 6.1 5.2 5.5 flan mf>ic turrng - 3.0 2.9 2.8 2. 9 2. 9 Iol P r.i L-. 2n .6 2.6 2.'7 2.6 2.1 2.8 1Public utilities G0.14 o.)j 014 0 () .L .1 O. omm'OII Ile -Cf a 'I(.2 6.14 6 . 6.3 5.9 . 6 Tra-nisport, comrnicat.ions 2. 2.6 2.5 2.8 2.9 2.1t '-evSc im (' 7.5 6.8 714 7.7 8.3 8.5 To val 31.. 291.t 2'.3 29.2 28 .1 27(1 TIi oyeee 298.1 3.8 3)_ .1 .3'A . X .0 372. of 1,11ichl publ.:i socto' .. - l(73( !. IL?! .9 l .l. 13 .' /a Excludes sanitary services which are now included under "Services" Source: Monthly Digest of Statistics, January 1971 L'al:ie__2.1: EXlfJFrlDlDTUidE ()N GfitO2 S HAT 0iC,2L PR{ODJUCT AT KA'IiKEFT Pi[GI4L, l5-6268 (kwacha million; curvenLt prices) Priv;it,e conmupnrtion ,1'~.7 26fl.h-. 3U9.)L 3,'98. 8 h i38Y Afric,an rur'al ho.seholrd cofLrr.mption JI 35 r 40.2 4h . i ,roT-rO impnltn currerit expe1zlitrb C .tu.e 8 -2. 86.2 1134.8 I f> C ro:;s fjixeri ca.anital formation 6.2 L,J 1]7'.8- 225.- 3 oI whi r'r: iand imprroveme ii, 1.4 c.6 Cl. ' .I 5.6 Mine deve.Loloment 9.8 i .,I 7.7 87 . L 22 . Y2iiidj^' and works 37.8 67.' .7 106.8 i 3'i. 7 !lrant, rnarehi.ineri and equipment 27.2 7. 8 83.5 1ll4 .6 81.1 Chlange iri stock:s -18.8 35.. . 48.9 Y .? flof?!e: t!ic expcn.>r:Iit.ture n(4366.6 539.3 662.C 8 3?.? 1.6 ;; ta t i tic al U L.; e ro eTancy -5. 8 - - -- Net exy7orLt of good., and &;erv:i.ces ILI. 3 110.)7 120.3 52.:? 7 .1 et, investment incomer pal.d ahroad -9. L -45.5 -5r;.0 -5o. 6 -5.2.:I Total, expenditure on GN].' 4 ..) 60 .4 72, .3 84 0. 5 937.6 solurce: ]4oriLhLy i)igerit ol 'tatistics, Ja:uaiy 119'71. Table '.2: EXPEMDIrURE ON NARTIS NATIONAL PHODUOT A'V' MARKElT P1'IL; , I964-1968 (kv:iciia nrii iion; 1L965 prie:3) 'ri. vae, carnswn t;ion 2j2.5' .3 2W9.4 .352.3 363-0 Ai;'rIcan rural. household conswIotidon 34.j 35.9 37.0 38.6 h2 ).4 Goverrnnent, current. exponditure 60.6 83.2 84.1 107.9 118.3 Gross Fixed capi+tal] formaLior, 82..7 120.;4 163.7 178.l4 184.9 of which: lai(d innpravement l.6 0.6 0.8 5.() 4.3 Ihine dloee]TdIv)oprnel lIt .J 4. 7 6.6 5.9 11J0 ( :hiiJlillZ aLnd wo1:i 42.3 67.- 3 78.5 8R.8 99.5 Plant,, machinery and CqUi)oen t 27.86 l7.8 77.8 82 .7 67.1 C,ha.sce inl stcocks -49. / 5 4(5 . I krcs t.ic. expenditure 3H6 .'9 5 9. 3 72;3.7 718.1 754t.2 '.,,at,:i.stiea:L discrepancy -6.8 - - - - . x porto of good.-s anci serIIice; lV.6 :LIO.6 114.1 56.6 64.1 liet. i nvo t.rnent inooome paid abroad -72.4 -)0.5 -55.0 -48.6 -47.6 Total ey4opendliture on GHil' )77 -3 5u4 .14 68d.8 726.1 770.7 Ta h:L e , . EH: jEl )'I'XIBT.[IA] ORRTITN LW G (1, S:3 , hiL:' i tHji;J2 I AT lk'ACTU(9t (:0C!.3'', i,?( ?-19(41) (kwacha miilion: Ot 1rre1. price ? n-i(c u] Lu re C .ores tfry and( fis- in 1 53 03 ., 66.3 6 .7 PIining anid quuo.'rITriFg 9.h) 21 7 .0 C .3 3,1 . , 36. ' la rufac nLg. r4g 92 h1;.0 6.)' 73.2 7h.) r'onst Lruc Lion 20.0 39 .h tIb.0 ' 9 f. j. 7 Lroct. :i cit-:y and water K-) 5.3 7) 12.. ? Traade i).8 7L- .3 78.3 96 .0 .Il . pinanc-ial ini titutions and iTisurarice 0.6 1-0.7 11.5 .i't.8 19.3 ea] esi,at-e 1(9.6 9.2 I1., 19.9 20.8 Tranr;port a-id co-rriunication-s 2c). 6 .3?2. 32.ij )49-. (overnment, admrLinlistraLion 21' .2 30 .)4 35-7 L2.1 115.8 Ed(lucation and health 19.6, 2:3.3 2L,.0 37.6 81.2 Othher 19. 23. 2 95 2 33.2 37 '.1 Ti)TPJ GIA )F ).,93. 6:L.6 762 .7 8.I'8,. 93G 6 ,ou rce: Maor,l;ily ODigest, January 1.971, exce .Lor fig.urer, orn r.ining an(l (IU.arryirIn wlri h thJ Mri.s s ion ha nod:ii.'iod to inc.lude copper export t,ax arid royaLt;ies. 'Table 2.)j: (. rRh()0L FIXlED CAPITAI, FOfm'MAIOUl 19614-1(968 (kwacha million; current; prices) L)6L 1965 1966 6 1968 (l as,Sificatioli l, ectlor: F'rivate sector /a 5)1.)4 75.6 96.2 125.5 127.7 Public ,sec tor 41. 7 6 2_8 1I *1 o-f' whi7ch: Governmerit enterpri ses 14 .1 18.:' ,1.9 26.3 _ i.8 Czsitral goveimcnrit, ]l8 22.6 53. 66.7 69.7 Local ,overnmen,et 3.6 3 - 14.2 6.8 10.6 To tal 76.2 1D0 .3 175.8 225.3 214l1.8 C,Lassified by indhustriaL use: A1,ri cCUlture, forestry, fis-hing 5-( 7.3 9.2 10.3 11.5 M;7ining, quarrying 2'7.l 25.0 27.1 3L4.3 33.9 lVanuifacturing 5~.14 9.5 15.8 18.G 22. 7 i'05', t;-UC'tiOfl 1.0 8.6 9-4 16.1 17. 4 ":1e!.iri (nity, water 30 5.7 6.0 8.14 15.6 I ril,ade 2.8 9.8 6.5 10.5 13.7 ;t'inanci il Jnstitut,ionru;, inSUrance 0.8 1.3 2.5 J.14 3:.1 8c?ai. en ';ate i1-.0 13.2 17 .8 20(.3 23.2 'lanm-p-)ort, comnnin:ica.tJo11 6.0 7.8 1?9.5 20.9 13.h 'thQr h 5.7 4- 8.6 10 .0 !' tl-,a: e-nter e>risen 5.8 93-9 118.1 151.8 1614.5 .etal cent,ral and local govcrnment 17.4 26-4 57-7 7- 80 3 T o-t,IlI 76.2 120. 3 1.l5.8 225.3 2141.8 __> Iticludes public corporations 3or, rc. P]c ,nomdn Re-or-, 19'70 Uabl-c 3.1: J;AL'f\CE g 1S' 01 J't' r )NTh, ; (RiKacha million) 9f'lL 11)L6 I 19683 Mer(;rian(iise exporto f.o.r. j6.9.14 66. 62 It(), .' K3;3. 3 blerchandisn import;s; f.o.b. I53.1 -2 3.2 -,1.. -2. '!'rade oalance 11 91. 1 R.( Lf.h 1327. :L62.' Non-factor services, receipt.:3 '8 6...j 9.7 10.0 10. 8 N on-iacto-r services, paysLmerits -%.6.0 -- -69-.0 -81.7 -C)7.2 IJon-f actor service, bsalan ce -50 . - . -9-3 -71.7 -96.17 2,alance of goods and non-factor se rv:ices 111.1 1111.7 122.3 61.0 66. > Investment incorne, net -i9.2 -3(.6 -62.2 --o.6 _L;.pL Orari sfe r net privnale -8. 8 -.1. -9.'.' -9.3 7 ran sf' nrs, net. g -rerltrneIm t 2.2 -*.1 -2.1 9.14 1. :l. arnce af ter in vestment ine ome and t,ransfers 73 6i 2.6 L5 lo.' -16 9 Private capital, ong-term -20.6 14.3 .9 14.3 40.2 Private capital, short-term -;.0 -J 10.2 10. -11 .2 'I'otal private capital. -2.a -0.3 12.1 129. Puiblic long-term 1.orrowin(, 6.14 2.6 14.' ].h.1 2).7 public, re p:aymenc?n t.; - ^>. 7 -9. 9 - 2.1 -2.3 Other public capital transactions - . -7 .f3 -1.7 9.2 Total public capita:L -10.1 -5., 10.1 Il9.5 Change in reserves (- increase decreases -18.0 -5Y1.2 -45.8 -10.6 -10 -.') FErrors and orrissions, net .2. 2.0 ll.e -2..6 -21.14 'vource: [NU Balance of Payments Yearbook Tahle - X 3.2 i Jl'O UIT 0' IO'I{IiI PAL () IlLLfL, 1 965-1969 -196 l9666 1]68 9,19 (k-wacha miLi oni) Copper 3) t3.2 116.6 .1M3 .o 5- 6.1 72)4.5 zi nc 9.7 8. 8.1 9.0 .1 2. ij Le-ad l. 2.7 2.7 6.1 -Carfanest, ore 0.7 0.6 O.5 ().h _ CobDal t, 3.h' 1. 3 5. 6( 3.4 II- 5 Tol)acco 14.9 l.5 3 .7 2.7 3.2 Maize 1.9 1.8 8.7 2.8 0.1h Timber 0.9 0.7 o.6 o.6 0.7 Miscellaneous 6.8 h- 3-1 3.0 2.6 Total domestic exports j375.1 19(0.3 467.0 5I 0.7 751 4 RE -exfforts 3.7 _ 12.0 'o Lal exportls 38o.3 -I I3. .4 l47.0 51it .14 766. 5 ( thlousarirnis of short ton:-.) Copper 75,3 660 66 03 709 805 ,i le. 50 U 8.8l 0 59 L,eal -(17 27 19 18 29 Maniaanesc orE 3G6 29 27 19 Cobal t 1.6 1.8 2.3 1 .1 1.8 'I'obacco (million lbs.) 21 16 10 8 8 Mai ze 52 4I 218 71 9 ,ou tce: Montil:Ly Diges3t of 'tat:ist-ics, Januaiy :l97). Table 3.3: VALUE OF IMPORTS BY S.I.T.C. SECTIONS, 1965-1969 (kwacha million) 1965 1966 1967 1968 1969 Food 16.5 19.8 21.h 24.1 30.4 Beverages and tobacco 2.8 3.0 2.1 2.2 2.2 Crude materials 3.7 4.6 It.4 4.4 4.5 Mineral fuels 20.6 19.6 31.2 33.2 35.6 Oils and fats 1.3 2.6 2.3 1.9 2.9 Chemicals 29.2 19.2 20.9 2,.6 22.6 Manufactures classified by materials 49.8 55.1 65.5 74.1 6?.8 Machinery and transport equipment 69.6 97.9 126.3 13h.h 123.0 Miscellaneous manufactures 6.o 23.8 28.h 24.o 25.6 Other miscellaneous 0.h 0.4 3.8 4.2 2.2 Total 210.7 246.1 3o6.4 325.2 311.8 No-te: Details may not add up due to rounding. Source: Monthly Digest of Statistics, January 1971 Talble 4.i: E'XTEI,RNAL PULthuIC DBT' UUTST'TAMJ.LG, /a December 31, 1969 (t)edl- repayable in foreign currency; thousands us-) Debt Ou>utsstanding S ourrc DecembIner 31, 1f969 l)isbLrstd Inclu:dlrtl oILy ursI;buroed Total external public debt 1 72 27{5 58 Privately, helfd debt 91,,, 6-513 iu1blicly in n.Iled bonds i0J _12 1__2_10_ -r)nplle rr 5,933 5 933 J apan tj j,0 66 4 bof, Unif,ed h&itLr'ron ",8.67 I, 76? Financial institutions ii? 525 France zc 3,-l.',( 7, 280. Italy 33,t0717 33,6h7) Ulnited Xingdwn 1G,7'U2 12,532-3 Loans' from international organ-uizat-ions - L3id) 59,938 5,666 L oa2ns f rom roOvrer-Lter3 -t; tI lDerurk 1,572 2, 7 Vie rmany 1,171) I, I 75 U. 3..1S. 737 5,556 United Kjingjdosm 35,273 35, 27' United -tates 5,693 8, 22 Ylugoslavia 1, 1- 15, 525 Unclassified 5, 65 J a Debt with an original or extended maturity of over one year /b 'Jet of accumul aled sinking funds of $,I571,000 /c iDoe:s not include an unallocated amount ($5,199,000) of a frame agreement Source: Statistical Wrvicea Division, Economics, Departmnent, JulY 1, 1970 Table .2 TA: EJlM;AT P'UT VJ',4tI(X 1'AYWICH P2 ON UXTI'TJNXA PJB.1C iDl j:T ou J'PJ'TA.ND)JN(G, I NUllUDTh0 ULDLJJ iUkSLW, 19/0-1984 (Debt repavable in foreign currericy; thousands of U:s$) OC Ls tan iig, _ :e r v ce_ p a y m e It u Year detL /a /b Amxtl t;z aL:io1I InLerest Total 1970 2681, 36 37,097 11,312 2 8, 1U0 1-71 211,:1, I, 5 95 12 , 266 26, 561 1L972> 26,1524 25,,291 111,4C) 36,731 1 973 211,076 1 5,4 17o9 10, 2 38 21,717 1974 191, L;9y 20,314 9,460 29,773 1975 171;,283 14,7 5, 104 23,248 *Q75'; 160,0I>lo 1)r,130 62 59 22,395 1977 1I6,Io014 13,2714 E,0)1'vI 21,323 1978 133,129 1,t S6l 7,658 20,269 19, 79 120, 518 f1,O5L 7,2 93 2l1, L16 1 910 103,465 717,074 6,638 23,712 .lhlA:i 8390 1T, 963 5,675 22,638 1 982. 69,4t27 8,3193 4,729 12,922 L983 61,234 7,709 It,209 11,9113 1 81 3 13,2 5 :,4)02 3,730 9, 1 3 3 N otee ncluudes serviOe D0avWOr [ on dL debtt listed i.n Table 14.1 witth the exceptLion oi' tlhe F 4) o ine, T'or which vrinen Lt term-S are not a va labl e: locarn' r'-e-nl g oye?-rAIRients - Jnited KinLMICorI VI,ctc LI Tic " ] 'ASiJ j i i (1 ';i6,y190l,coo} /i At, th,ne begininrin, o:f t.he, y ai-, /,b Ne, of accumulate,-l si-nk-in1, Jurnd boUrt-e: utatistical Sc rrrLce p - 1 )ij.isio , Ecollomics Department,.. July 1, 191(0 *ah l'e@t; z.1: (.TL '1' LA 10 v15ll 't' i'it!' ltE WPJJ itr196/66-176L (kwzacha mlJlion) July-Dec. L 6 /6'. (1966 1967 126 1iGC 122(2- Income tax 80.3 Li%.8 32. 86. 11313 11,9.6 Custoris ancl excise 2.2 13.1 36.8 1,8.3 61.0o 68i.a Fines and licencies 2.(3 1.3 3.2 3.14 3.9 3.8 'inera' revenue 82 .5 69.3 79 .6 1314.0 185.6 17.1.5 Internst 9.8 7.0 Uij.J 11.8 17.2 21.1 ICourL foees andl earnifr,s of ministries 5.0 2.9 I10. 8 3.1- 9.7 10.7 0j.8E.i1.0. reirnhursements 0.9 0.8 ll.3 5.1 5.1 0.6 Miscellaneous 8.6 2.1, 6.8 8.7 41-. 6.7 ]Loans 0,.S.A.'. compensation) 2.3 - 1.7 - O. ToLal recurrenit reve.nile 217.i1 1 42.1, 257 .7 306. itOl .2 k,l2.1 Source: Monthly Digest of Statistics, and data supplied bry Whe Ministry of F'inance. Table '.' CEN 11L0. (10 VLl.Utf1 F Hl ;CUtW(1%NT IlXW'IlEL)'ITUJR (kwaonha mi.illion) 121/)L; 2LS6 1,966 2 1960 Gencrreira service; 2L.7 36. 7 38.5 52.2 69.2 Ck,epa1 . Lntiev L ral Lion 9.9 T.T7 )efernae )L.1 11.9 12.7 1Lb.6 11.9 Justice and police 10.7 13-J 12.6 13.3 1LI.8 'Comnrunity cervices it-IL 5.k) 6.8 L Roab; and walex-mays C) 3.3 77 3.3 2.0 '-,anitation, water sTpp.I*y, etc. .6 0.14 -L.() 0.1 0.2 Vther 0.8 1.3 1.2 (J.9 U.9 Social L;ervices 20.. 36.6 J46 . 19. 2 F>bacation :1.0.7 17.2 21.5 30.0 29.9 H-leal th 8.9 8.* 9.5 1.3 1J1 .1 ooci al security and wellare 1.5 1.7 0.1 0.J8 1.0 ilousi irIg -1.6 2.2 3.6 1.2 1. 3 0Ot,her 0).9 :1.' 1.6 2.1 2.2 'conomic services 8.3 10.9 214.3 L6. Agriculture and non-mineral resources 6.6 8.3 9.4 16.14 19.8 iuel and pow;er 0.1 0.2 12.7 13.0 13.0 ilining, manuf.acturing and cons txnictior 0.3 0.5 0.3 7.7 10. 3 Trani :port arn(i communiracations 1.1 1.5 1.3 7.9 11.b OtIher 0.?) 0.1 0.6 1.3 1.7 Ulnall oc;able 17.14 23.2 2 27.7 !'otal 7 Ji 16.9 32J1 (7 7 2C' 3 Iou rce: Central Stat,is tical W'f i(ce PloLe: The defJnitl JoJns of recurrent arid capital expenditure used by the SO0 differ from those used in the ludget. The main diSference Jis thfe treatment of repaymrents of public debt, which are included in recurrent expenrid Lure in the bud!get, a4i(1 in capital exynenditure by the [C( . Tal!~ e S . -3: (31lIiUAi , rGoV HThLIBIHirtir GAPIEITAL. F ' ,l|l|I-LJ Bc 'PY FE OF :iE.RVICET, 19)61j--i f68 (kwachla mill ion) 1. (J6I; 1965r -,Qf6 L;7 gt) Gcriornle sernv:'es ,'.3 :L-.9 8.1 83.7 7- _ (3orieral a(bnl.ni t,ral,iori 1 *() J. '. o S. 8 1 ~ ~ ~~~1 0.' ~ C ,Justice a.n: polico . 3 L 2 2.1 'Cou!Lrrnxn71i ty _' -f] Cfz c r2 *8 !' *LO.9 13 .3 1 3 28.1 k WThradlv anci waterways P.? 13 1l2.4 ]f3.3 2)6.4 '-;anitation, ws-I er supply, eL,c. .' 0 o.6 0.5 1 . 3 Other 0.4 C.1 (.3 O.1A .7 ',ocial services, 8.8 2u.7 32.f 2 3 Fdulicati on0 )14. , 11T.6 18.1 - 18. -Lo .7 Heal -th 0 .1 0. 9 1.6 3 ..9 Social. security t;,ind wielfare - - 0.2 0.3 v.o loil. n,:ng 3.- 7.9 12. 13.7 1-.L 0 ther ()0.2 0.3 O.l 1.3 0.6 !,conomi.c s e rvice 3.3 __6i G.' 1_7_2 Acri culture and non-mineral r essources 1..9 9.3 15.( 12.h l',.o 1l^ll 1 ancl power 0.5 1.7 6.5 11.6 5? 1 Minin-i_ manuif'actluring anrd c onstruction - 9.0 2.6 11.2 7 .3 !rans-ort an(d cominumnica tions 0-9 3.1 27.5 3L.)i 23. 7 0 the( r - )0.3 1.3 2.2 9.1 Ulnallocabhlu i8) (9 4 .3 16.1i 13 -9 1,e 'To tal 36 89.2 123.2 1L40.41 't i rciL Ofri' icrt (ta Li t-L( 0.f ILCe Table 6.1: LIABILITIES AND AUShTS OF THE T3ANK OF ZAMBIA, 1965-1970 /a (kwacha million) 1965 1966 1.967 1968 1.J69 197C Liabilities Capital 2.0 2.0 2.0 2.0 2.0 2.0 General reserve fund 0.9 1.1 1.5 265 2.8 9.2 Allocation of Special Drawing Rights - - - - - 6.o Notes irn circulation 17.7 25.7 36.2 43.4 44.6 48.3 Coins in circulation 2.4 3.2 3.8 3.3 1 '.2 365 Deposits 28.0 41.6 33.0 37.6 76.6 2q%.l Gov ernment 19.3 32.7 22.3 25.? 37.5 119.1 Bankers 8.5 8.3 9.9 11.5 13.3 18.0 Other 0.2 o.6 0.9 0.9 25.9 68.1 Other liabilities 1.1 2.5 4.2 3.2 7.8 12.2 Total 52.1 76.0 80.8 91.9 137.1 286.4 Assets Gold 2.5 2.5 4.1 4.1. 4.2 4.2 Foreign exchange 45.5 62.2 60.0 76.4 112.3 270.6 Government securities 3.7 10.7 11.0 8.1 18.4 8.6 Other investments 0.2 0.5 565 2.8 - 2.0 Other assets 0.2 0.1 0.2 0.4 2 .2 1.0 Total 52.1 76.0 80.8 91.9 137.1 286.4 Note: Details may not add up due to rounding. a 1965-1969, situation as at September 30. Source: Bank of Zambia Table 6.2: COMMERCTAL BANKS' ADVANCES BY BORROWER GROUPS, 1965-1969 (thousands of kwachas; end period) 1965 1966 1967 1968 1969 Agriculture 1,376 1,13b 1,180 1,469 3,037 Mining and quarrying 4,996 5,284 6,416 3,928 181 Manufacturing 6,532 7,810 11,161 20,195 22,607 Building and construction 2,788 3,172 8,847 11,382 10,567 Distribution 8,150 8,488 1.6,932 14,466 21,506 Transport and communications 1h2 404 8,073 2,754 4,808 Financial institutions 2,336 1,538 5,210 7,516 2,434 Government 66 42 57 1,263 13 Personal accounts 2,658 6,014 14,733 5,295 9,024 Other 1,8()? 2,710 3,164 3,o85 3,708 Non-residents 66 40 190 153 1 Total 30,812 36,600 65,962 71,506 77,886 Source: Monthly Digest of Stati:,tics, January 1971 Table 7.1: SALES OF TOBACCO, 1966-1970 1966 1967 1968 1969 1970 million lbs. Virginia flue-cured 14.6 10.7 13.8 11.1 10.6 Burley 1.7 o.6 0.6 o.5 Turkish 0.5 0.3 0.3 - - value in millions or kwachas Virginia flue-cured 4.4 4.7 h.2 3.9 3.0 Burley 0.2 0.1 0.1. 0.1 - Turkish 0.1 0.1 0.1 - - price in kwacha per lb. Virginia flue-cured 0.31 O.44 0.31 0.35 0.28 Bur-Ley 0.15 0.12 0.17 0.23 Turkish 0.24 0.19 0.20 - - Source: Monthly Digest of Statistics, .January 1971. Table 7.2: PURtCHASES OF AGRICULTURAL PRODUCE BY THE NATIONAL AGRICULTJRAL MARKETING BOARD, 1965/66 - 1970/71 Estimate 1965/66 1966/67 1967/68 1968/69 1969/70 1970/71 Maize (million bags) 2.8 h.? .1 2.8 2.8 1. Groundnuts Shelled ('000 bags) 15.6 8.1 4A4 2.2 17.8 9.5 Unshelled ('000 bags) 0.3 0.1 - - 0.1 0.1 Cotton (million lbs.) 5.0 6.1 h.0 9.3 15.3 11.9 Source: Monthly Digest of Statistics, January 1971. Table 7.3: RECORDi~D COMMERCIAL CATTLE SLAUGHTERINGS, 1965/66-1969/70 (thousand head) Estimate 1965/66 1966/67 1967/68 1968/69 1969/70 Graded: Prime plus youth bonus 5.0 9.3 6.7 8.2 5.9 Prime 7.2 9.5 2.h - _ Standard 12.3 10.6 12.7 12.6 1h.2 Commercial 15.0 11.9 10.8 12.? 1L.7 Utility 11.4 7.5 1.3 - _ Detained 0.6 0.4s 0.2 0.1 0.2 Total graded 51.h 49.3 V1.0 33.2 35.0 Vealers 2.6 2.3 1.2 0.4 0.2 Condemned o.6 0.5 0.2 0.1 1.1 54.6 52.1 35.I 33-.7 36.3 Nite: Details may not add up due to rounding. Source: Mont;hly Digest of Statistics, January 1971. T tir,Le 0 : 1U' !k , I 'W iJ 1 I.iON , l 96(f-I /() i 960 I 9(7 1'(f8 3 C7)69 A SL (' ",/' 12 ncixst,lhs N4ov.-Uct. thouc3ards of s}ort. tons Copper 6f,6 679 8 2) 7864 Blis-ter I'7 0 1)3 lIL6 El ectrolvIle 5J.b, 630 708 662 Z;j n c 1^ O 59 55 ',1' l.e ad 21 2' ,?) 2' 28 Cobalt 1.7 1.6 1.J 2.0 2.3 mi-I liorts ol kwachas C opper b 39 73; 7L D I- is -le r 63 57 71 1] Elec';rolyt._c 377 386)j3 636 6l. Zir c 8 8 9 9 10 Leadci 3 3 3 h 5 Cobalt 3 3 Other 14 4j L 6 'Co Val )t57 )162 533 7 59 791 averav e value; kwachai per short ton BIJ.b ,cr coppeor 64b 62 5 6 0 8C 78 891) Electrolytdic copper (y 6,';6 702 890 9: 7 Zinc C71 168 11 1 62 175 ,.c ad3 15.1. 127 133 1i61 178 CGobal 9, 2 ,00 2,0C)9 ?,52CQC) 2, wO 2, Ou __U_r___e_ Iot) LItLy Dige,,t- of tai ;;;l; Ji, 3an iiA ry 1]t1. r'ab-l 8.2 : rI'AEI1 f , M 1JidG (lDrIGI , 1'96%-1-969 (-nd(3i.ces -1-964 100) 1965 i%6 1967 -L6f Foodstuffs 111 125 1ih8 160 15 Beverages and tobacco 129 1]59 191 19L4 186 Textilcs and clothing 1. 35 131 11 3 28 165 Non-met.aallic mineral, product-s,s lIt5 163 189 218 1)49 Metal and metal products 11Ct 168 16 l 171 1.38 OtIhers 132 17Lt 195 219 290 Total mariufacturin- 130 ... 178 190 188 Source: Monrthly Digzest, of :tatistics, January 1971 rah:Le. 9_.: AHER,AQ ATLNIJAL gA.BNrG BY fS3TRY, 1965-1969 (kwacha) ufX 1"66 1'96'? ~1 68 1969 Afr'icans 'Po tal ) 1480L 666 2 L5A AgricultaUre, forestry, fi:;hing 17.? 150 266 3%, 36C Mining and qxarmr.nr 126 9314 ,2 22 42,?8 ]., h12 iManufactuiring 1486 1478 668 61,4 11t4 ,ons truiction 3,22 ' 32 '00 64l93 L560 ;u:)licd ut,ilities 388 4 5 630 629 721 3omrne.ce 1.6). 1488 710 836 801 Transport, conmni.cations )h56 688 934 9146 1-, 0314 e. rvices (excludinm domes-tJic) 148 $26 69 72?0 7o14 D)omestic service 216 2118 266 276) 280 lori-Af ri cans Potal 3T 14,09C 1,Jj58 4,720 4,869 Agriculture, forestry, fishing 2,3614 3,0110 3,076 3,5 9.3 Ij,1)lX l1-ning aIid cuarrying l,78 6,598 7,608 7,6014 8,174 Manufacturing 3,12,86 3,566 4,472 I4,962 5,1511 Constniction 3, 510( 3, 908 1,650 5,729 5,693 P-tblic utilitie: 14,27h 14,92)8 5,572 6,0111 6,150 OComnmerce 2,)478 2,I89(8 3, [s52 4,075 14, 91 PrarI port, CorrUnun:LCa;:i.On.' 3,078 14,W 1.52 3,76(1 3,87( 14, 018 Services 2 ,90() 2, 7 36 2, 77014 2, 8 8 3,173 Source: Monthly Digeslh of Statistics, January 1971 Table 9.2: C014S0fiWR PIfUCE jfAICE1.;, L96-2-. 970 ( J anuary :1.'?62 = L60) Higher iricorrie Lower income Combirned inldlex i-ndex index A11 items FPood All items F}d l :Litel = 'ood 1962 101.1 100.7 100.7 99.8 101.8 1102.1 1963R 101.8 100.2 102.1 99.9 01I.3 100.6 1-96L 105.7 103.1 106.2 102.2 lob.5 103.7 1965 111.9 109.9 110.7 106.5 113.0 113.2 1966 120.7 120.5 116.3 112.9 124.5 127.8 1967 126.9 126.9 122.2 118.2 130.7 134.4 1968 139.5 138.9 132.7 130.5 144.9 145.7 1969 Ist qiarteI 1L3.8 1T2.8 135.9 132.5 148.7 li .0 2nd quarter 1i,5J4 143.9 138.1 133.3 150.0 150.3 3rd quarter 1U4.8 141.6 1i0.0 132.9 1h7.5 1)16.6 Lth quarter 114.6 114.0 139.9 132.6 117.3 lk3.7 197C 1st quarter 1135.1 141.2 i4o.6 132.6 147.7 1)46.1 2nd quarter 146.1 11.7 11.3 132.9 148.8 lb6.7 3rd auarter 148.3 144.!5 1]s1.8 134-.0 152.0 150.5 '2ource: Monthly Dig,est of Sftatistics, Jarnar.r[ 1971