ZAMBIA

	FY 1998 Actual	FY 1999 Estimate	FY 2000 Request
Development Assistance	$11,011,000	$11,450,000	---
Development Fund for Africa	---	---	$13,450,000
Child Survival and Disease	$8,300,000	$8,982,000	$8,900,000
P.L. 480 Title II	$2,244,000	$2,243,000	---

Introduction.

Zambia is a small, peaceful country that is moving steadily toward a more liberal market economy and the creation of a viable multi-party democracy. The government is also working seriously to contain the potentially devastating impact of the spread of HIV/AIDS. Success in all these efforts will have a positive influence on the entire Southern Africa region, an increasingly important market for U.S. goods and a source of valuable natural resources (copper, oil, gold, and diamonds).

Zambia has taken many steps to open its economy. It has made progress in its privatization efforts, moving recently into the politically more difficult mining, railway and telecommunications sectors. These reforms have created opportunities for U.S. trade and investment, particularly in the mining sector. A U.S. company also recently purchased a privatized milling company. Nevertheless, Zambia remains one of the world's poorest countries and thus also merits U.S. support on humanitarian grounds.

The Development Challenge.

Zambia's key development challenges are to continue efforts to liberalize the economy and encourage growth and investment, improve health and education services, strengthen systems to serve both farmers and rural entrepreneurs, develop rural markets, and improve the government's responsiveness and accountability to its citizens.

Since its 1991 elections, Zambia has embarked upon an ambitious program of economic liberalization. Positive results in the agricultural sector have helped the government through the difficult privatization of its copper mines, a process that is almost complete. Low labor productivity, inadequate infrastructure, and lack of consistent policies are the principal challenges to the reform program. Inflation shot up to 30% in 1998 (from 18% in 1997); public expenditure controls are weak; the banking sector is fragile; and domestic savings are low. These constraints are symptomatic of an economy still in transition from a statist era to a free-market regime, and remains overly dependent on a single export. Public external debt at the end of 1997 was $7.1 billion. The government's economic reform efforts have resulted in modest economic growth, but a sharp drop in the price of copper recently has undermined this.

HIV/AIDS prevalence rates are among the highest in the world and pose a serious threat to the country's economic and social development. Recent reforms toward a decentralized health-care system have improved service delivery, increased contraceptive use, lowered fertility rates, improved immunization coverage, and helped reduce Vitamin A deficiency.

In the current political and economic environment, the pace of reforms has been uneven. The collapse of copper prices and resulting economic hardship makes it politically difficult for the government to continue to move forward with economic reforms.

On the democracy front, the flawed 1996 elections, the attempt on former President Kaunda's life, the attempted 1997 coup, abuses of the rule of law, continued problems of multi-party cooperation, and voter apathy represent serious concerns. Nevertheless, performance in democracy and governance programs over the past year has been good.

Zambia is susceptible to droughts that have created periodic food shortages. USAID has played a strong role in providing emergency assistance to mitigate the impact of these droughts (providing 10,000 metric tons of sorghum during the 1998 season) and is helping to increase the lines of defense for rural families in drought-vulnerable, food-insecure areas.

Other Donors.

Overall development assistance to Zambia fell from more than $740 million annually in 1995 to approximately $340 million in 1996, but increased to $480 million in 1997. These aid inflows accounted for 17% and 22% of total Government revenue in 1996 and 1997, respectively. The World Bank continues to be the lead donor. Japan is the largest bilateral donor, followed by Norway, Denmark and Sweden. The United States is the seventh largest bilateral donor. USAID and other donors meet regularly, and discuss activities in such areas as health, education, agriculture, natural resources management, economic reform and privatization.

FY 2000 Program.

USAID will work to accelerate and broaden the gains from Zambia's economic reforms, and will support policies in all sectors that will improve living standards and health and increase participation in the economic and political systems by all Zambians.

More specifically, USAID will facilitate farmers' and rural women entrepreneurs' access to credit at the community level by expanding microfinancing in rural areas. USAID will help communities in drought-prone areas increase market access for their crops through collaboration with agribusinesses, and will provide farmers with new agroforestry technologies. USAID will provide technical support to the Southern African Development Community (SADC) and to the Government of Zambia in its bilateral trade negotiations to ensure that Zambia's trade policy and legal framework are in compliance with World Trade Organization requirements.

USAID supports decentralized, integrated, low-cost basic health service provision through Zambia's health-care reform program, and will complement ongoing project assistance with sector program assistance (SPA). The SPA will help accelerate the impact of Zambia's health reform program by institutionalizing the monitoring and evaluation of the quality and impact of health services, and will encourage community empowerment by directing resources to the local level.

Shrinking financial resources from Zambia and increases in the school population have led to a serious deterioration of the quality of basic education in Zambia. USAID will support efforts to reverse this trend and to increase access for all Zambian students, especially girls. In addition to working with teachers, schools, and curriculum, USAID will have a child health activity to improve nutrition and the capacity of children to learn.

USAID will support civil society institutions, helping them to function more effectively in deepening and broadening citizens' understanding of and demand for democratic institutions. New activities will include support for the judiciary, which has emerged as a defender of democratic values, and assistance to Parliament to enable the institution to be a more effective forum for citizen participation and public debate.

ZAMBIA

FY 2000 PROGRAM SUMMARY (in Thousands of Dollars)

USAID Mission Director, Walter E. North

USAID Strategic and Special Objectives	Economic Growth & Agriculture	Population & Health	Environment	Democracy	Human Capacity Development	Humanitarian Assistance	TOTALS
S.O. 1. Increased Sust. Rural Incomes - DFA	7,750	---	1,200	---	---	---	8,950
S.O. 2. More Equitable Access to Quality Basic Ed., Learning, Especially for Girls - CS	---	---	---	---	800	---	800
S.O. 3. Incr. Use of Integrated Child. Reprod. Health and HIV/AIDS Interventions - DFA - CS	--- ---	3,200 8,100	--- ---	--- ---	--- ---	--- ---	3,200 8,100
S.O. 4. Expanded Oppor. for Effective Particip. in Dem. Gov. - DFA	---	---	---	1,300	--	--	1,300
Totals: - DFA - CS	7,750 ---	3,200 8,100	1,200 ---	1,300 ---	--- 800	--- ---	13,450 8,900

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ACTIVITY DATA SHEET

PROGRAM: ZAMBIA
TITLE AND NUMBER: Increased Rural Incomes of Selected Groups, 611-SO01
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 2000: $8,950,000 DFA
INITIAL OBLIGATION: FY 1998 ESTIMATED COMPLETION DATE: 2003

Summary: Since 1994, Zambia, with USAID support, has aggressively reformed economic policies affecting rural families, expanding opportunities for increased income and food security. Incomes have increased as rural families are now able to produce higher value crops and sell these crops directly to commercial firms rather than to parastatals. In turn, these commercial firms have captured an increasing share of regional markets. For example, cotton exports increased from $7.8 million in 1996 to $44 million in 1997. Similar annual gains have been achieved in foreign exchange earnings from tobacco, sugar, floriculture/horticulture and textile exports.

Nevertheless, poor roads, frequent droughts, low labor productivity, increasingly degraded natural resources, weak rural financial and agricultural marketing services, and inadequate business skills continue to prevent rural families from taking full advantage of market opportunities. Incomes remain low and many families remain vulnerable to drought-induced food insecurity. In 1998, USAID began helping rural families to organize in groups to cooperatively overcome these obstacles. The direct beneficiaries of these rural-based activities will be small farmers and small enterprises, rural communities, game management areas and wildlife. The Zambian private sector at large will also benefit from a policy environment that supports growth and rewards initiative.

Key Results: Three key intermediate results are necessary to achieve this objective: (1) Increased agriculture and natural resource productivity through improved low-rainfall crop production, rural farm productivity and the adoption of sustainable agricultural and natural resource management practices; (2) Increased productivity of rural non-farm enterprises through their increased access to financing and markets, improved business skills, and supportive business associations; and (3) Improved private sector growth through increased non-traditional exports, improved commercial arbitration, and privatization.

Performance and Prospects: USAID began its new focus on groups of farmers and rural non-farm enterprises in 1998, and will continue to implement these as well as the ongoing food security and privatization activities. New activities will also be launched in community forest management, agroforestry and group marketing. The successful creation of an enabling regulatory environment for microfinance has set the stage for USAID capitalization of a promising local microfinance institution. USAID technical assistance to recently privatized firms has strengthened their competitiveness. Support for more effective Zambian participation in regional and international trade fora and new USAID agribusiness development investments will help link rural families to competitive domestic and international markets.

Small businesses provide crucial opportunities for income and employment, and the organization of associations increases the clout of these small players. USAID support to the Zambia Association of Chambers of Commerce and Industry (ZACCI) has increased the participation of small business associations in the commercial sector throughout the country and has helped create effective advocacy networks. Training provided to 512 small business owners/operators has increased both profits and employment.

The number of rural business groups benefiting from USAID's rural business outreach activities increased from 179 in 1997 to 263 in 1998. Over 5,000 farmers received a total of $410,000 in production credit. Of this number, 3,200 adopted conservation farming techniques that reduce the risk of drought-induced crop failure and increase land and labor productivity. A food security activity has reached 72,000 people in drought-prone areas. In 1994, 52% of project households reported having less than a six-month reserve of food. By 1998, over 89% had enough food for seven to 12 months. A seed multiplication and distribution activity that started in 1996 and is implemented by local groups has reached 18,000 farmers, resulting in a 300% increase in improved, low-rainfall crops.

Possible Adjustments to Plans: Zambia is restructuring its wildlife and forestry management regulations and institutions to include a new emphasis on local-level management and benefit. USAID will support activities to determine the costs and benefits of community wildlife management and demonstrate how to institute effective approaches in protected areas. USAID will begin to monitor the impact of conservation farming and agroforestry and use the findings to identify future investments to enhance land and labor productivity. USAID will assist the Ministry of Commerce, Trade and Industry to expand its capacity to analyze, formulate and negotiate bilateral and multilateral trade agreements and to continue the development of enabling microfinance regulations. Food policy formulation will be supported through research conducted by a U.S. university.

Other Donor Programs: USAID has been the leading bilateral donor in the area of privatization. The World Bank, United Nations Development Program, the U.N. Food and Agriculture Organization, Netherlands, Sweden, Finland, Norway, European Union, Japan, African Development Bank, Denmark, Germany, and the United Kingdom all promote business development, rural income growth and/or natural resource management. USAID collaborates with the World Food Program in addressing food shortfalls.

Principal Contractors, Grantees or Agencies: Current grantees and contractors involved in developing business or microfinance capacity include: the International Executive Service Corps, Clark Atlanta University and the University of Maryland. The local grantee is the Zambia Chamber of Commerce and Industry. U.S. institutions involved in rural income or natural resource activities include: the Cooperative League of the USA, CARE, World Vision, and the Wildlife Society of New York. Key local agencies include the Ministries of Tourism, National Parks and Wildlife; Agriculture, Food and Fisheries; Environment and Natural Resources; Commerce, Trade and Industry; and the Environment and Conservation Association of Zambia. Finally, Associates in Rural Development implements the Famine Early Warning System.

Selected Performance Measures:

	Baseline (1997)	FY 2000	Target (2002)
Increased incomes of selected rural groups	$240,000	$561,600	$1,260,000
Improved land and labor productivity (% increase)	0%	20%	40%
No. of farmer groups adopting impr. technologies	15,000	36,000	40,000
Rural Non-Farm Enterpr. (RNFE) sales, service rev.	$240,000	$516,600	$1,260,000
Improved RNFE access to finance	$210,000	$517,440	$1,584,000
RNFE support institutions (members)	20,000	43,500	53,000
Non-traditional agriculture, natural resource exports (millions)	$213	$324	$430

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ACTIVITY DATA SHEET

PROGRAM: ZAMBIA
TITLE AND NUMBER: More Equitable Access to Quality Basic Education and Learning, Especially for Girls, 611-SO02
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 2000: $800,000 CS
INITIAL OBLIGATION: FY 1998 ESTIMATED COMPLETION DATE: 2003

Summary: The Zambian education system has seriously deteriorated over the last twenty years and is barely sustainable as it is now organized and funded. Resources have been falling, while the number of Zambian children enrolled is rising. Information required for sound policy and management decisions is rarely available when needed. The school infrastructure has deteriorated, and furniture, textbooks and learning materials in most schools are chronically low or non-existent. Zambia’s HIV/AIDS crisis is further undermining the educational system, increasing teacher absences and attrition and numbers of school-age orphans. Girls, who have traditionally been disadvantaged in education, are falling further behind their male counterparts.

USAID aims to help the Zambian Government develop a high quality and equitable basic education system at reasonable cost, with a special emphasis on providing increased access for girls. USAID will support institutional capacity-building at all levels (school and community, district, provincial, and central). The direct beneficiaries of this program will be children who attend primary schools, particularly previously unenrolled girls. The Ministry of Education will gain enhanced policy and planning capacity.

Key Results: Three key intermediate results are necessary to achieve this objective: (1) Improved curricula supporting high-quality girls' education; (2) Increased demand by parents for girls' education and increased community and local government support; and (3) Improved policy and planning capacity by the Ministry of Education at both national and local levels.

Performance and Prospects: This activity began in late 1998, and thus it is early to report major results. Inception activities have made good progress in assessing specific educational needs and designing programs with the Ministry of Education. Three priority initiatives are expected to be:

1. Expanding the Program for the Advancement of Girls Education (PAGE) to reach forty schools in the southern province, thereby increasing girls’ enrollment and retention in the basic education system;
2. Developing and testing a model plan to improve school children’s health, nutrition and knowledge of health issues and, ultimately, to improve their learning performance and attendance; and
3. Developing a modern, efficient, and cost-effective education management information system that will improve the decision-making capacity of education policy makers, planners, and managers. All of these programs will be developed with a focus on enabling communities to take the lead in promoting the health and education of their school-aged children, particularly girls.

Possible Adjustments to Plans: By the end of FY 2000, pilots in each of these programs should have been launched, and an evaluation will be carried out to identify lessons learned and develop strategies for strengthening and expanding the programs. USAID will also conduct studies to determine other requirements in the areas of girls' education, school health and nutrition, and educational management information systems. The findings will form the basis for future implementation plans.

Other Donor Programs: USAID’s educational assistance is under the umbrella of Zambia’s Basic Education Sub-Sector Investment Program (BESSIP), a national program designed to improve access, quality and relevance of education, to optimize the use of resources, and to move management closer to the points of delivery. USAID communicates and collaborates with the Ministry of Education and other donor-partners informally on a daily basis and more formally through monthly donor meetings. The World Bank, working with other donors, has taken the lead in financing and advising the restructuring process. USAID will participate with the Ministry of Education, NGOs, and other donors in annual reviews of the BESSIP implementation plan. USAID also has collaborated with the government and its donor partners in a school-based health and nutrition program (with the Ministries of Health and Education and Japan); a program for the advancement of girls' education (with the Ministry of Education, UNICEF, Norway, the U.K., Irish Aid and the Netherlands); and development of educational management information systems (with the Ministry of Education and UNESCO). Assessments of these activities have informed USAID's current strategy for the education sector. Norway, Finland, Sweden, Irish Aid, UNICEF, the U.K. and others have funded the development and distribution of textbooks, teacher education reform projects, and construction of resource centers.

Principal Contractors, Grantees or Agencies: The principal grantees are the Government of Zambia and UNICEF (for PAGE).

Selected Performance Measures: Baseline and target data are being developed and are expected to be completed by June 1999. Results indicators will include those such as:

More children, especially girls, attending school

More children, especially girls, completing seven years

School-going children's yearly attendance rates increased

Increased community participation in school-related activities

Education decision-makers formulating more cost-effective policies

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ACTIVITY DATA SHEET

PROGRAM: ZAMBIA
TITLE AND NUMBER: Increased Use of Integrated Child and Reproductive Health and HIV/AIDS Interventions, 611-SO03
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 2000: $3,200,000 DFA; $8,100,000 CS
INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: 2002

Summary: Zambia's centralized, bureaucratic health care system has developed serious inefficiencies in the provision of health services, and these problems have been exacerbated by the AIDS pandemic, which has hit Zambia particularly hard. Since 1995, USAID has supported the government's ambitious efforts to restructure the health sector so that it provides equitable access to cost-effective quality health care as close as possible to the family. USAID concentrates on four areas: family planning, child survival, infectious diseases, and HIV/AIDS. The direct beneficiaries of this strategic objective are the urban and rural populations who are able to take increased responsibility for their own health. Intermediate beneficiaries include public sector institutions and facilities, private sector institutions, private voluntary organizations, and organizational units of the Ministry of Health.

Performance and Prospects: Performance over the past year has been excellent. The government's comprehensive health reform program continues to progress. Nevertheless, the adverse macro-economic climate has deeply constrained the sector and threatens the sustainability of the reform program.

The number of new family planning acceptors has increased from 60,154 in 1997 to 80,969 in 1998. The Government of Zambia and private sector partners have collaborated successfully to reduce Vitamin A deficiency through the fortification of sugar. This initiative will prevent blindness in children and will reduce deaths among childbearing women.

USAID will continue to support decentralized, integrated, low-cost basic health services. USAID will provide additional support to Zambia's health reform program by complementing existing activities supported by USAID, other donors, and the Ministry of Health. USAID is also providing assistance to AIDS orphans. It is estimated that over 700,000 children are either infected or affected by the HIV/AIDS epidemic in Zambia. If current trends continue, Zambia will have over one million AIDS orphans by the year 2000.

Possible Adjustments to Plans: While the Government of Zambia remains committed to health reforms, financial difficulties continue to threaten these reforms. Moreover, the benefits thus far have only partially reached the Zambian people. USAID and other donor partners are working closely with the Ministry of Health in trying to resolve the key issues affecting the implementation of health reform.

Other Donor Programs: USAID is involved in a multi-donor effort to support Zambia's health reform. USAID is the primary donor in HIV/AIDS prevention and family planning activities, and remains the third-largest donor, behind the United Nations Children's Fund and Denmark, in child survival activities. The United Kingdom, the Netherlands and Sweden are also engaged in this sector.

Principal Contractors, Grantee or Agencies: USAID will implement integrated child health, reproductive health/family planning and HIV/AIDS activities through four U.S. institutions: the Johns Hopkins University, John Snow Inc., Abt Associates Inc., and Population Services International. These principal contractors/grantees will work with a number of U.S. subcontractors including CARE, Africare and Project Concern International. Local NGOs and private sector organizations, along with Ministry of Health organizational units, also are grantees.

Selected Performance Measures:

Baseline (1996)	FY 2000	Target (2002)
Modern contraceptive prevalence rate	14.4%	19%	22%
Condom use (female/male)	24/35%	38/45%	45/50%
Children 12-23 months immunized	67%	76%	80%
Reported condom use in most recent, high risk sexual intercourse	35%	43%	55%

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ACTIVITY DATA SHEET

PROGRAM: ZAMBIA
TITLE AND NUMBER: Expanded Opportunity for Effective Participation in Democratic Governance, 611-SO04
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 2000: $1,300,000 DFA
INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: 2002

Summary: Despite some notable success at reform in the beginning of the decade, Zambia's political system is still fragile. The transition from a socialist system of one-party rule toward an open, participatory and pluralist democracy has been slow. The purpose of USAID's strategy in this area is to increase citizens' participation in more transparent and accountable government institutions. The ultimate beneficiaries are the citizens of Zambia. The immediate beneficiaries are selected organizations including the Judiciary, the Law Association, Parliament, and the Local Government Councils.

Key Results: Three key intermediate results are necessary to achieve this objective: (1) Enhanced rule of law and respect for human rights; (2) Increased citizen awareness of and participation in the political process and enhanced appreciation of the links between personal freedom, civic responsibilities and the role of government; and (3) Local government structures that are more responsive to the needs of citizens.

Performance and Prospects: Performance in this sector over the past year has been good. In the area of administration of justice, USAID support, along with resources provided by private foundations and the International Trade Center (World Trade Organization), helped establish an alternative dispute resolution program and created the foundation for an Alternative Dispute Resolution Center. An arbitration act has been drafted. Zambia's first class of accredited commercial arbitrators completed one training program and will begin mediation training.

USAID began an effort to strengthen the capacity of civic society organizations for advocacy and civic education. A change in leadership of the National Assembly has improved the prospect for reforms that could lead to a more open and accessible Parliament. Support for public opinion research began to take hold.

USAID will train members of newly elected local councils in techniques of strategic management and planning, and will help local government officials examine their roles in the political process and in delivering public services to their constituents.

Possible Adjustments to Plans: The government has responded to concerns raised about governance by constituting a Good Governance Committee. This committee has been given the mandate to examine the government's performance and make recommendations for areas requiring redress. It is anticipated that government initiatives to implement the recommendations will follow. USAID's democracy and governance program may need to be realigned to accommodate these initiatives.

Over the past year USAID has seized opportunities to partner with such key Zambian institutions as Parliament and the Judiciary. Over the next year, there may be opportunities to support the Government's executive level as well, in policy analysis and coordination.

Other Donor Programs: The United Nations Development Program and the World Bank are the major donors contributing to the public service and judiciary reform programs. The United Kingdom has supported government decentralization and fiscal management, and has provided training for senior civil servants. The Nordic countries have joined with USAID in the areas of civic education, election monitoring, electoral reform, and constitutional reform. Donors meet monthly for coordination purposes.

Principal Contractors, Grantees or Agencies: The U.S. PVO PACT is the principal implementation grantee. The Zambian Ministry of Legal Affairs, local non-governmental organizations, private foundations, and local consultants and contractors also are implementing activities.

Selected Performance Measures: Baseline and target data are being developed and are expected to be completed in April 1999. Baseline figures will be for 1999, with a target date of FY 2002. Illustrative indicators include the following:

Increase in NGO-initiated contacts with selected government institutions

Increased number of cases submitted for alternative dispute resolution

Increase in number of legal professionals reporting better access to legal information

Increase in attempts by local groups to contact elected and appointed officials

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