Zambia simultaneously faces extreme poverty and high inequality, with 64.3% of the population living on less than US$2.15 a day in 2022, and a Gini index of 51.5. Poverty is becoming more entrenched, with extreme poverty rising from 71% in 2010 to 77% in 2022, and overlapping deprivations affecting a large portion of children. Vulnerability to poverty is high, driven by structural factors such as underinvestment in services and infrastructure, with significant deprivation in access to electricity, water, sanitation, and education.
Economic growth has a low poverty-reducing impact, with previous growth periods failing to significantly reduce poverty or inequality. Rural poverty remains stubbornly high due to underinvestment, ineffective policies, and climate shocks, while urban poverty surged amid macroeconomic volatility and negative shocks. However, some rural areas, particularly in Lusaka and Copperbelt, have seen modest poverty declines due to better asset accumulation and connectivity.
Agriculture plays a dual role: while many rural non-poor households rely on it for income, small-scale farming traps the poor. Medium-scale farming and wage employment in agriculture offer promising pathways out of poverty. Urban poverty reduction is more pronounced in Lusaka, driven by skill-specific growth and asset accumulation.
Current growth projections are insufficient to reduce poverty significantly, as GDP growth remains too low. Inclusive growth requires structural transformation, better public investment, and policies that leverage assets and markets. Key policy areas include:
- Assets and Services: Addressing gaps in electricity, water, sanitation, education, and nutrition, with a focus on rural-urban disparities.
- Use and Returns: Improving market access, promoting medium-scale farming, and creating off-farm opportunities.
- Spatial Dynamics: Understanding territorial inequities and unlocking urbanization potential.
- Transfers and Shocks: Strengthening the Social Cash Transfer program and enhancing shock-responsive capacity.
Data improvements and mainstreaming are critical to guiding policy. Addressing structural vulnerabilities, enhancing resilience to climate shocks, and fostering inclusive growth are essential for sustainable poverty reduction.
