The World Bank’s Vision for Zambia’s Private Sector: A Critical Review

By Savior Mwambwa

Thanks to the Christmas holidays, I’ve just finished reading the World Bank’s latest Country Private Sector Diagnostic for Zambia in depth, and I have some thoughts to share. 

While the report offers valuable insights into Zambia’s investment landscape, its fundamental approach concerns me. Let me explain why.

What the World Bank Gets Right

First, credit where its  due. The diagnostic provides a comprehensive overview of Zambia’s key growth sectors – mining, solar energy, agribusiness, and tourism. It correctly identifies critical challenges: our worrying debt levels, persistent inflation, and the urgent need for private sector growth. The data they’ve compiled is impressive and useful for understanding our current situation.   

Here’s Where It Falls Short

The report’s main weakness lies in its almost religious belief in market-led development. Anyone who has studied Zambia’s and Africa’s economic challenges for years can tell you – it’s not that simple. Let me illustrate why with some numbers because, as they say, numbers don’t lie:

• Nearly two-thirds of our people live in poverty, with rural poverty at a staggering 78%.
• Our economy still depends on copper for over 70% of export earnings.
• More than 60% of our workforce is stuck in low-productivity agriculture.
• Less than half of our households have electricity access.
• Only 55% of our country has been properly mapped for mineral resources.   

These aren’t just statistics – they represent structural challenges that market forces alone can’t solve. We have seen too many market-led solutions fail to address these fundamental issues.

What We Can Learn from Our Neighbors

While the World Bank pushes for market liberalization, some of our African neighbors have taken a different path – and with impressive results. Ethiopia’s state-led industrial parks have created 45,000 manufacturing jobs. Rwanda’s government-driven technical training programs now reach 60% of their youth workforce. These aren’t accidents – they’re the result of strategic state intervention.

What Zambia Really Needs: A Practical Alternative

So what’s the alternative? Here’s what I believe Zambia needs:

1. Smart State Leadership

Let’s be clear: I’m not advocating for heavy-handed state control. Instead, we need strategic intervention in key areas. Take our mining sector – the current 9-12 month licensing delays aren’t just bureaucratic inefficiency; they’re a symptom of poor state coordination. We need a state that enables and guides private sector growth, not one that simply steps aside.

2. Infrastructure That Makes Sense

We are looking at a 150% increase in electricity demand by 2030. Only 24% of our rural roads are in good condition. Our railway network operates at 30% capacity. These aren’t markets failing – they’re opportunities for strategic public investment.

3. Real Skills Development

Only 22% of our workforce has completed secondary education. We have a 40% gap in mining engineering skills. Our technical and vocational enrollment rates sit at a mere 3%. The private sector can’t fix this alone – we need coordinated public action.

4. Supporting Local Business

When only 8% of our SMEs can access formal credit, and local content in our mining sector is below 10%, we have a problem. These aren’t just market failures; they’re opportunities for smart policy intervention.

A Path Forward That Makes Sense for Zambia

What would this look like in practice? Let’s break it down:

For mining, we need to:

• Digitize our licensing systems (yes, it’s 2024!).
• Invest in proper geological mapping (only 55% mapped is embarrassing).   
• Build actual mineral processing capabilities.

In agriculture, we should:

• Expand irrigation beyond the current 155,000 hectares.
• Create real agro-processing zones.
• Strengthen our extension services.

For energy security:

• Fast-track renewable projects (we have 20,000-50,000 MW of untapped solar potential!).
• Get serious about rural electrification (14% access isn’t acceptable).
• Modernize our transmission infrastructure.

The Bottom Line

  I appreciate the World Bank’s effort to understand our private sector. But their market-fundamentalist prescription simply doesn’t match Zambia’s reality. We rank in the bottom third globally for public policy effectiveness, regulatory quality, and governance. These aren’t problems that will fix themselves through market forces alone.   

We need a balanced approach – one that recognizes the state’s crucial role in development while harnessing private sector dynamism. It’s not about choosing between state and market; it’s about making them work together effectively.

The evidence from our own continent shows this can work. But it requires political will, smart policy design, and a long-term vision that goes beyond simplistic market solutions. That’s the conversation we should be having about Zambia’s development future.

Merry Christmas!

#ZambiaKuchalo!