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11. The Distribution of Household Income and the Middle Class in Zambia

Author:
Zambia Institute for Policy Analysis & Research (ZIPAR)
Publication Date:
12-2013
Content Type:
Working Paper
Institution:
Zambia Institute for Policy Analysis and Research (ZIPAR)
Abstract:
The middle class is increasingly becoming a topical issue in Zambia. However, the lack of a definitive measure of the middle class in the country makes it difficult to have targeted policies on this group of people, perceived worldwide to be the drivers of economic growth. With high and rising income inequality in Zambia, we propose two operational definitions of the middle class by exploring the middle class from a median perspective and from a ‘relative affluence’ perspective. Defining the middle class on the basis of the ‘actual middle’ versus ‘relative affluence’ provides vastly different pictures. The results show that individuals and households that fall in the ‘relative affluence’ group have achieved a modest standard of living and are actually near the top of the country’s income ladder while households in the actual middle of the income distribution in Zambia have a standard of living well below what can be perceived as a ‘middle-class lifestyle’ elsewhere. This requires targeted policy designs when referring to changes in the economic status of the Zambian middle class. We propose a household income distribution framework which combines both the actual middle households and the relatively affluent middle households to create an enabling environment for inclusive growth policies, rather than just pro-poor policies.
Topic:
Income Inequality, Economic Growth, Middle Class, and Household Income
Political Geography:
Africa and Zambia

12. Creating and wasting fiscal space: Zambian fiscal performance, 2002–2011

Author:
Zambia Institute for Policy Analysis & Research (ZIPAR)
Publication Date:
06-2012
Content Type:
Working Paper
Institution:
Zambia Institute for Policy Analysis and Research (ZIPAR)
Abstract:
Following three decades of economic mismanagement and decline, Zambia has experienced sustained economic growth since the turn of the century. The combination of rapid growth, reduced public expenditure, increased mining taxation and debt relief helped the Government establish fiscal discipline and reduce fiscal deficits and debt to sustainable levels. As a result, fiscal space has grown significantly and Zambia is no longer aid dependent. In addition, lower domestic public borrowing has helped cut inflation and interest rates and has reduced crowding out of private sector borrowing. These developments would normally be expected to lead to significant poverty reduction. However, by 2010 there had been little improvement in poverty. This is partly due to fiscal space being wasted on ill-designed agriculture policies and uneconomic road paving projects of little benefit to the poor.
Topic:
Economy, Economic Growth, Fiscal Policy, and Management
Political Geography:
Africa and Zambia

13. The costs and pricing of tourism in Zambia: The case of Livingstone

Author:
Bernard Banda and Caesar Cheelo
Publication Date:
11-2012
Content Type:
Working Paper
Institution:
Zambia Institute for Policy Analysis and Research (ZIPAR)
Abstract:
Tourism is potentially one of Zambia’s best prospects for economic diversification and growth. The tourism sector has the potential to play an increasingly important role in stimulating economic growth by contributing to job creation, foreign exchange earnings, entrepreneurial development, infrastructural development, improvements to rural areas and communities, and more. There are questions, however, over the effectiveness of public sector policy and strategic interventions in fostering the realisation of the potential of tourism. In this regard, there are two opposing views of the realities of Zambia’s tourism industry. The operators argue that the business environment is exceptionally difficult in terms of both the odious costs of doing business and the variability of regulations in the industry. In sum, they say, it is a struggle to generate decent profits. Their critics, however, say that such claims are unfounded. They believe that the operators have been deliberately creating information asymmetries, causing immense loss of government revenue and benefitting from considerably higher prices for tourism service packages than do their competitors in the region. It is possible that both arguments contain some truth. Until we gain a better understanding of the cost and price structures and their differences with regional competitors, the mistrust between the government and the private sector will persist. This study seeks to make a modest contribution to informing tourism policy and strategies by taking a disaggregated look at the cost and price structures of tourism service operations in one of Zambia’s key tourism destinations and comparing them with the structures in a proximate competitor region. By benchmarking tourism services in Livingstone against those in Victoria Falls town (on the other side of the Zimbabwean border), it captures detailed data on prices, inputs (labour, main service ingredients), food and beverages, overheads and other establishment performance indicators. The services considered include: accommodation (hotels and lodges); food and beverages (restaurants, diners, pubs/bars, cafes, etc); adventure tourism (water rafting, water cruises, micro flights); and wildlife safaris (nature walks, game drives, safaris).
Topic:
Development, Tourism, and Economic Growth
Political Geography:
Africa and Zambia