Zambia’s economic situation has improved in the last decade, driven by economic and public sector reforms initiated in the 1990s and propelled by rising copper prices. Economic growth was around 6 per cent annually between 2005 and 2010. However, poverty levels have remained high, especially in rural areas. More than 60 per cent of Zambians live below the poverty line.
To foster more broad-based and inclusive economic growth, Zambia has sought ways to diversify its economy. It has targeted agriculture as a priority sector for poverty reduction and food security, since two thirds of the population lives in rural areas and relies on agriculture for income.
Agriculture accounts for about 20 per cent of GDP. It has the potential to be a major source of economic growth, given the country’s abundant fertile land and good rainfall. Agricultural productivity is very low by global standards. Faster agricultural growth is also critical to reducing rural poverty.
Crop production is dominated by maize, which is grown by 80 per cent of farming households, though cassava is the main staple in the north. Smallholder farming households number approximately 1.5 million, over 20 per cent of which are headed by women.
A living conditions survey in 2010 classified 78 per cent of Zambians as extremely poor or moderately poor in rural areas compared to 28 per cent in urban areas. The most commonly cited reason for poverty was the inability to afford agricultural inputs (32 per cent of the rural population) and the lack of capital to start up or expand farms.
The high cost of inputs, poor rural infrastructure, lack of oxen for ploughing, and the absence of rural financial services (apart from limited community-based schemes) make it difficult for smallholders to access needed resources.
The agriculture sector employs over half of the workforce, though its contribution to GDP has been gradually declining, to just 12.2 per cent by 2008. Smallholder yields have remained low since the beginning of the millennium, and sectoral growth averaged only around 2 per cent annually for much of this period.
In Zambia, IFAD loans support the commercialization of smallholder agriculture, in particular by enhancing crop and livestock productivity (including by reduction of livestock disease). They also create links between small-scale farmers and suppliers and market intermediaries, and help to increase access to rural financial services by small-scale farmers.
The IFAD country strategic opportunities programme is designed to help poor smallholders in remote areas make the best use of natural resources to improve food production and food security.
Activities target the poorest rural people, including households headed by women and/or affected by HIV/AIDS. Because women are largely responsible for household food production and income generation, they play a key role in IFAD's programmes and projects, which aim to reduce poverty by generating income.
IFAD also promotes policy dialogue on issues related to rural financial services, and to the development of policy, regulatory and institutional arrangements for the control of livestock diseases.
Results-based country strategic opportunities programme (COSOP):
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The economy in Zambia remains mainly dependent on copper. The agriculture sector employs over 50 per cent of the workforce.
More than 60 per cent of Zambians live below the poverty line.
Since 1981, IFAD has supported 14 projects and programmes in the country for a total amount of US$385.7 million, benefiting almost 5 million poor rural households.