Note: This document may not always reflect the actual appropriations determined by Congress. Final budget allocations for USAID's programs are not determined until after passage of an appropriations bill and preparation of the Operating Year Budget (OYB).
ZAMBIA
FY 1998 Development Fund for Africa . . . . . . . . . . . . . . . . . $17,600,000 Introduction.
Zambia is pivotal to southern Africa's prospects for peace, economic integration and growth. For a generation, Zambia played a lead role, at great cost, in fanning the winds of change that led to majority rule in the region. Angola, Mozambique, and Zimbabwe all suffered debilitating civil wars; Zambia has often been -- and continues to be -- a facilitator and peace-maker in the region. Today Zambia is a beacon of growth and stability. The Government of the Republic of Zambia (GRZ) has pledged to stay the course on privatization and economic liberalization. In time, this will result in increased investments -- especially in the mining, agricultural and industrial sectors, renewed growth and increased incomes. The U.S. interest is primarily to enhance prospects for peace, trade and stability in the region and ensure Zambia's viability as a partner in the ten-member Southern Africa Development Community (SADC). Success in this effort will result in fewer claims on U.S. military and humanitarian relief capabilities. It is, therefore, in the U.S. interest that the GRZ succeed in its efforts to accelerate economic growth, consolidate democratic processes, open investment opportunities, reduce its population growth rate, improve the quality and coverage of primary health care and curb the scourge of HIV/AIDS.U.S business is playing an increasingly active role in Zambia's economy. Zambia offers profitable opportunities and a welcoming environment for investors. It was the first country in southern Africa to abolish all exchange control regulations. Further, to assist the process of divestiture of state-owned enterprises (SOEs), the 1993 Investment Act allows investors to transfer dividends, interest, management fees, royalties and the net proceeds of sale or liquidation assets out of the country.
USAID/Zambia's $18 million Privatization Support Project is a success story. It provides lead-donor technical advisory services to the Zambia Privatization Agency (ZPA). ZPA has privatized 137 of 150 SOEs. Many goods and services formerly provided by the GRZ are now being provided more efficiently by the private sector. Getting the GRZ out of money-losing state enterprises such as the national holding company, the national airline and the national bus company has saved the government tens of millions of dollars a year in unnecessary subsidies and budget support. The economy has opened up to many new entrepreneurs, including U.S. investors. Non-traditional exports have boomed. Zambian consumers have access to better and cheaper products. The World Bank has singled out ZPA as the best run privatization effort in Africa.
There have been a number of microeconomic success stories resulting from hands-on technical assistance by the International Executive Service Corps (IESC), under USAID's Private Sector Support Project. An example is a consultancy with the Zambian-owned Oven Fresh Bakery resulted in the development of new lines of bakery products, improved production flows and schedules and a better trained and motivated work force. The bakery which employed eight persons in 1992, employed 60 in 1996, while the company's sales revenues jumped from $57,000 to $1.2 million over the same time period. Results like these fuel increased demand for hands-on technical assistance from private sector firms.
The Development Challenge.
Zambia, one of the world's poorest countries, is poorer now than it was at independence in 1964. Years of socialism led to reduced incentives and productivity and resulted in one of the world's highest rates of indebtedness ($750 per capita) and in deterioration of the country's political institutions, social capital and physical infrastructure. Per capita annual income is now about $350, approximately half the level at independence. About half of Zambia's 9.2 million people are concentrated in a few urban zones strung along major transportation corridors. Unemployment and under-employment are serious. Social indicators have deteriorated since independence, particularly measurements such as life expectancy at birth and maternal and infant mortality. Zambia's population has more than doubled in the last 25 years. The present, high population growth rate of 3.2 percent makes it difficult for per capita incomes to increase. There are debilitating effects on maternal and child health. If current trends continue, Zambia could see under-five child mortality go from the already high level of about 202 deaths per 1,000 live births to 250 deaths by the year 2005. Zambia is one of sub-Saharan Africa's most highly urbanized countries.These conditions are the result of serious mistakes in the past, exacerbated by several recent major droughts and near-droughts; the droughts had devastating effects on the maize-dominated agricultural sector. Past -- and recent -- failure to reinvestment in the major industrial economic sectors, particularly the mining industry, have also contributed to Zambia's problems.
Zambia clearly faces a development challenge. Fortunately, Zambia has one of the best, sustained commitments to economic reform of any country in Africa. In 1991, Zambia turned away from a socialist system to a market-oriented democracy; a general liberalizing trend continues, and new policies are starting to show positive changes. For example, improved monetary policy has contributed to local-currency stabilization. Better fiscal policy is making inroads in eliminating the gap between revenues and expenditures in the state accounts. Agricultural liberalization has encouraged farmers to diversify their crops, making them better able to cope with recurrent droughts.
Progress in democracy and governance (D/G) - more transparency and accountability - are critical adjuncts to sustainable and equitable economic development. USAID and other donors are active in this area. The Government's commitment to political reform has, at times, been inconsistent. However, vibrantly-expressed, Zambian popular pressure is helping to keep the Government focussed on its original economic and democratic objectives. Zambia has also demonstrated a commitment to health reform.
With sustained donor assistance, Zambia has the ability to become a development-success story. The government is committed to maintaining economic reform. An enthusiastic private sector is emerging. Zambia also has the physical resources required for development. Zambia has the land resources to become a major agricultural exporter of cereals to the region and of high value crops like paprika to international markets. Moreover, there is considerable scope for additional mineral exploitation.
USAID has played an important role in the economic reorientation of Zambia over the past five years, especially in the privatization of state-owned enterprises and the promotion of the government's programs of reform, particularly in health and family planning. By these means, and with a creative and flexible program of P.L. 480, Title II famine relief, the United States has successfully contributed to the establishment of a social safety net and to the generation of domestic pressures to sustain social and economic reform.
Given the debt problem, Zambia requires extraordinarily high levels of donor support. Only after a sustained period of restructuring, reorganization and reinvestment can Zambia expect to rely solely on its domestic production and trade, and thereby reduce dependence on external assistance. In the medium to long term there are grounds for optimism over economic prospects.
At present no P.L. 480 assistance is envisioned, as there were good rains in 1995/6. The U.S. Government has forgiven all bilateral debt that can be forgiven under existing legislation, but further debt relief of the remaining P.L. 480 and the Export Import Bank debts ($170 million) should be considered.
Other Donors.
The United States is Zambia's seventh largest donor. Development assistance typically amounts to roughly three quarters of the national budget. By far the greatest contributions are made by the World Bank/IDA (through structural adjustment loans) and the European Union. Among the bilateral donors Japan is the largest, followed by Great Britain, Germany, Norway and Sweden; Denmark and the Netherlands share sixth place. Because of concerns over governance issues associated with a recent constitutional amendment, all bilateral donors suspended balance of payments support to Zambia ($140 million) in 1996. The U.S. Government does not provide such support.
FY 1998 Program.
USAID 's strategy seeks to open Zambia's democratic climate so that people can develop, prosper and invest in the economic opportunities available in the country, while reversing socioeconomic deterioration caused by the effects of past statist policies. The U.S. interest is defined by Zambia's continued performance as a stable and progressive influence near a troubled region. Increased economic activity, both in urban areas and within rural communities, provides an essential backdrop to the proper functioning of this evolving and decentralizing political system. Improved policies associated with agriculture, trade and industry, alongside those which are already in place, can mitigate the worst effects of seasonal stresses on the basic food supply. More effective family planning and HIV/AIDS-prevention programs, and improved maternal and child health, can reduce pressures on social structures and help enhance popular support for further reforms.
Family health and population activities account for two thirds of the portfolio in terms of expenditures, but private sector development and growth, economic reform, and democracy and governance activities are important and will be key indicators of USAID program success.
Agency Goal: Encouraging Broad-based Economic Growth
Mission Business Development Component: In line with the GRZ's desire to promote business development and encourage competition and investment for recovery and growth, USAID/Zambia seeks to facilitate broad-based participation by private enterprise in key economic sectors of the country. Two of USAID's objectives in Zambia are to get Government out of businesses better carried out by the private sector and to encourage rural groups to contribute in greater measure to the national economy. The objective of USAID's Privatization Support Project was the privatization of between 50 and 75 state-owned enterprises. As of September 1996, Zambia had privatized 137 former parastatal units (including the Chilanga Cement and Zambia Sugar Companies, sole producers respectively of cement and sugar), and closed other budget-draining parastatals, including ZIMCO (the parastatal holding company), the United Bus Company of Zambia, and Zambia Airways, each of which required $5 million a year in government budget support for operations alone. Zambia has begun the divestiture process for Zambia Consolidated Copper Mines and the country's telecommunications industry, two of the principal generators of export revenues. The GRZ has shown a firm commitment to privatization. USAID's assistance to this important process has been very successful. Targets were exceeded (183%) one year before the end of the project.The Zambia Telecommunications Company (ZAMTEL), currently undergoing privatization under USAID's Regional Telecommunications Restructuring Project being implemented by Price Waterhouse, will become a private company by early 1998. The USAID-supported Zambia Communications Authority is now issuing licenses to private companies offering value-added services to the telecommunications industry, thus opening up this hitherto ZAMTEL-dominated field.
The two USAID-funded business training and hands-on technical assistance projects, Private Enterprise Support (IESC) and Human Resources Development Assistance (HRDA), supplement privatization efforts by providing skills and management training to new entrepreneurs. A Zambian organization, the ZambiaAssociation of Chambers of Commerce and Industry (ZACCI), is now taking the lead in continuing these activities. Training and technical assistance will continue to be offered to small- and medium-sized enterprises (SME's) as well as to large firms. Assistance to ZACCI should make this program self-sustaining by the year 2000. Approximately 12 percent of the owners/operators of registered SMEs in Zambia have received business training under HRDA and/or have benefitted from practical, technical assistance provided by IESC. Over half of these firms reported that they have used this assistance to access new lines of credit, develop new efficiencies and expand their activities. Zambian businesses are directly benefitting from this practical, results-oriented assistance in terms of improved production and increased incomes. As a result, demand for these services exceeds supply by a factor of ten.
Mission Agriculture Component: With USAID-assisted liberalization and an end to state subsidies, farmers are showing their ability to evaluate, adopt and adapt new technologies, diversify their cropping systems, shift to crops more suited to the environment and improve food security and incomes. Supported by USAID's $23 million Agriculture Sector Liberalization project, the GRZ's sectoral liberalization and privatization activities have led to a vastly improved enabling environment and significant medium-term agribusiness investment over the past two years. Outgrower schemes (where seeds and inputs are provided to the farmer) are employing thousands of small-scale farmers and are flourishing since the privatization of state-owned farms, bringing life-sustaining jobs to rural areas. Cotton outgrowing and processing investments now provide 80,000 farmers with timely fertilizer and insecticide delivery, extension services and guaranteed cotton markets. One cotton processor plans to increase outgrower production from 60,000 tons (1995) to 100,000 tons (by 1999). This processor also bought a traditional beer brewery and now encourages outgrowers to add sorghum to their cropping systems. With the removal of maize and fertilizer subsidies, farmers in dry areas are shifting from maize production to sorghum and other crops more suited to the environment.
External and domestic investors now manage refurbished feed milling facilities -- formerly a state monopoly -- increasing demand for small scale farmer cereals and oilseed output, while providing improved feed stocks to livestock and poultry producers. Village-based broiler producers, 80% of which are women, now receive extension advice from feed millers competing to increase sales with well-designed customer services. South Africa's largest horticultural company purchased ZAMHORT, the recently privatized processing parastatal. It is now setting up tomato and fruit outgrowers schemes. Another Zambian agribusiness pre-finances smallholder sunflower-oil production with an eye on exporting to Malawi. Paprika and marigolds were recently introduced to small farmers by a company investing in state of the art processing equipment. European, South African and Malawian demand for Zambian horticulture and floriculture products has led agribusinesses to experiment with small farmer French bean and birdseye chili production.
Zambia's abundant land, political stability and relatively good rainfall in some areas are drawing agribusiness investors who want to penetrate Zairian, Angolan, Malawian, Tanzanian and international markets with primary and processed commodities. However, the provision of agribusiness services to small farmers is expensive, as rural population densities are low and economic infrastructure is poor. Fortunately, the development of rural group businesses and village management committees has illustrated how some farmer groups can profitably work with agribusiness and in natural resources management. Mutually beneficial rural association - agribusiness linkages limit transactions costs and speed technology dissemination.
New USAID obligations for this Agency goal will be used to privatize additional major state-owned industrial and training enterprises from the grip of inefficient, bankrupt public management; to facilitate further opening of supporting institutional structures; and to move the majority of rural producers -- who are smallholders -- into the diversified market economy, away from state-guided and heavily subsidized maize monocropping.
Failure to provide sufficient economic-growth funding will significantly reduce Zambia's ability to privatize key remaining parastatals. As a result, Zambians will not reap the benefits of decreasedgovernment budgets, increased private sector investment and employment, and increased economic growth. At reduced funding levels, USAID will also be unable to continue activities in natural-resources management.
Strategic Objective 1: Reduce the State's Role in the Provision of Goods and Services.
Strategic Objective 2: Increase the Productive Participation of Rural Enterprises and Communities in the National Economy. Agency Goal: Stabilizing World Population Growth and Protecting Human Health
Of the total funding requested for Population and Health, $4,000,000 is planned for population activities and $7,800,000 is planned for health activities.Zambia's daunting economic problems and budgetary constraints exacerbate the strains on the health status of Zambians. In 1991, the GRZ initiated a dynamic health-reform program which radically devolved resources and management responsibility for the health sector to local or district levels. Districts are now able to plan and implement health programs. The health-reform process is widely acclaimed by the World Bank, WHO, UNICEF and other bilateral donors for its progress-to-date and intentions to further ensure that all Zambians have equitable access to both public- and private-sector health-service delivery. The GRZ is committed to continue strengthening district, community and individual capacity to improve health conditions. Over the past 2 years, the GRZ has steadily increased the amount of resources allocated for child health, reproductive health, and HIV-AIDS prevention and mitigation.
USAID promotes a decentralized, integrated, low-cost package of basic health services -- focused on child survival, polio eradication, family planning, reproductive health and HIV/AIDS prevention and mitigation activities -- to achieve sustainable improvements in the health status of Zambians. USAID is recognized by the GRZ and the other donors as a critical partner in health reform because of USAID's unique ability to provide state-of-the-art technical support that will ensure the high quality delivery of basic health services. USAID is supporting GRZ efforts to enable urban and rural communities to identify and solve their own health problems. With USAID assistance, the GRZ is developing policies and programs to expand private-sector (NGO and for-profit) provision of health services and private-sector production of health commodities.
USAID focuses on the most serious causes of childhood death. Malaria is the leading killer of children under five years of age. With USAID assistance, the GRZ is making available more effective drugs and ensuring that health workers know how to treat patients more effectively. This intervention will probably have the greatest impact on child mortality. USAID provided critical technical and financial support for the GRZ polio-eradication immunization campaign, which reached over 90% of children under five. USAID is supporting GRZ efforts to assess the feasibility of fortifying food with Vitamin A, to increase the availability and appropriate use of oral rehydration salts and reduce preventable deaths from diarrhea and micronutrient deficiencies.
Zambia was one of the first countries in Africa to recognize and respond to the threat of AIDS. Despite these efforts the country has a HIV seropositive rate of 25%, making it one of the highest in the world. USAID continues to be the major donor supporting the GRZ's comprehensive initiative to prevent and mitigate the severe impact of the HIV/AIDS pandemic in Zambia. According to the first-ever joint Japanese-U.S. evaluation team under the auspices of the Common Agenda for Cooperation in Global Perspective, USAID's HIV/AIDS prevention and mitigation activities, targeted on high-risk groups in Zambia's major urban areas, have been successful in raising awareness of HIV/AIDS. This is a critical step in the process of creating positive attitudinal change.
USAID is already taking the next steps beyond awareness raising. A USAID-sponsored model program to train traditional healers to deliver HIV-prevention services is being replicated throughout Zambia. Because of USAID support, health workers are better able to treat sexually transmitted diseases, which are an important co-factor in HIV infection. USAID has supported the effective development and implementation of employer-based counseling and education efforts to protect the vulnerable work force. USAID supports a national effort to make the "Maximum" condom affordable and available for those persons who want to reduce their risk of AIDS. Because of the severe nature of the pandemic, USAID provided initial support for highly successful, volunteer, home-based care teams, which assist families by educating them about patient care and intra-household HIV transmission prevention. This program is now being replicated around the country.
Zambia's current population of 9.2 million is expected to double in 23 years. Maternal mortality has risen to 200-800/100,000 live births, one of the worst rates in the world. The population growth rate of 3.2% is one of the highest in Africa-- and ultimately unsustainable. Unfortunately, while almost 50% of all married women in Zambia have indicated a desire for family planning, only 9% currently use a modern contraceptive method. Many do not have sufficient information about family planning options to make informed choices, or their choices are limited by lack of access to quality family planning counseling and services.
USAID's response to and success with addressing the problem has been multi-faceted. Due to the development of national family-planning standards and guidelines, program management has improved nation-wide; the adoption of a national family-planning logo has led to increased public awareness and acceptability of contraception; expanded and improved delivery sites have resulted in increased access to services. (For the first time, comprehensive family planning services are available in all 23 Ministry of Health Clinics in Lusaka, the capital city.) Training for family-planning providers has increased skills and human capacity; contraceptive supply and distribution through subsidized commercial marketing have put a variety of contraceptive options within easy and affordable reach. Project-related surveys indicate that effective and innovative information, education and communication (IEC) programs are convincing increasing numbers of Zambians to limit voluntarily the size of their families.
Strategic Objective 3: Increase Use of Integrated Child and Reproductive Health and HIV/AIDS Interventions. Agency Goal: Building Democracy
When Zambia held multi-party elections in October 1991, it became the first English-speaking state in post-colonial Africa to accomplish a democratic transition. USAID made consolidation of Zambia's democratic transition a priority by assisting in the constitutional-review process, supporting Zambian NGOs in a variety of civic-education activities, supporting the Zambian government in revision of the civic-education curriculum in the schools, strengthening independent media, and improving the policy- and decision-making process in the Zambian cabinet.The Movement for Multi-Party Democracy (MMD), which assumed power in 1991, ended its five-year term in 1996. Looming elections placed strains on the democratic system, as the MMD oriented itself towards retaining power. This in turn strained relations between Zambia and the United States. In May 1996, Zambia adopted constitutional amendments which barred former President Kaunda from contesting the presidency. The United States objected to amendments which "limited the right of the Zambian people to choose their leaders freely" and reduced the USAID program in Zambia. Presidential and parliamentary elections were held November 18, 1996, under the amended constitution and a flawed voter-registration process. Kaunda's United National Independence Party (UNIP), the major opposition force, and six other parties boycotted the election. The election was held peacefully and voter turnout was 58% of those registered; the boycott proved ineffective. A record number of 56 women contested seats in the 150 member parliament.
Going into the elections, USAID supported 49 NGOs in civic education, encouraging citizens to register and to vote. One NGO was the National Women's Lobby Group, which campaigned to increase the participation of women as parliamentary candidates. The number of women contesting parliamentary seats increased from 10 in 1991 to 56 in 1996. USAID was the major supporter of the Clean Campaign Committee, a coalition of 18 NGOs dedicated to leveling the electoral playing field and preventing election-related violence. During the campaign period, the CCC published the Monitor, a weekly newspaper designed to counter government media dominance. The Monitor became the largest circulating paper in Zambia. USAID also sponsored an election insert in a privately owned paper and a series of programs on Zambia's one, privately owned, non-church-related radio station, which gave civic education NGOs and opportunity to air their views. The election turnout, in spite of the boycott, and the absence of violence indicate the success of USAID-supported efforts.
Another USAID accomplishment during the year is the adoption by the Zambian Cabinet of a new Cabinet Handbook that includes improved procedures. Significantly, the Cabinet decided for the first time that this should be a public document, marking an important step in the direction of transparency. Agreement was reached on a new civics-education curriculum for secondary schools, the first major revision of the civics curriculum since independence. Preparation of teaching materials and in-service training of teachers will permit introduction in the 1997 school year of a civics curriculum suited to Zambia's newly liberalized political and economic system. USAID also supported Zambian NGOs in their efforts to advance the rights of women and children in such areas as inheritance.
The MMD-Government's willingness to compromise the principles on which it gained power in 1991, in the interests of re-election in 1996, suggests the fragility of the democratic transition in Zambia. At the same time, the vigor of political debate, the fact that elections were held, the level of electoral participation under adverse circumstances, and the continuing role of vibrant independent media indicate that there is still life in the democratic transition. Zambia has reached a critical crossroads in its democratic transition. New funding in 1998 is needed to continue support for civil-society institutions and to initiate new support for the judiciary, which has emerged as a champion of democratic values. A failure to provide funding for these activities would have a negative impact on Zambia's ability to become a strong, viable democracy.
Strategic Objective 4: Increase the Participation, Transparency and Accountability of Zambian Institutions in Civil Society
ZAMBIA
FY 1998 PROGRAM SUMMARY
Encouraging
Broad-based Economic Growth
Stabilizing World Population Growth & Protecting Human Health
Protecting the Environment
Building
Democracy
Providing Humanitarian Assistance
TOTALS
USAID Strategic Objectives 1. Reduce the State's role in the Provision of Goods and Services - Dev. Fund for Africa
2,500,000
---
---
---
---
2,500,000
2. Increase the Productive Participation of Rural Enterprises and Communities in the National Economy - Dev. Fund for Africa
1,939,000
---
400,000
---
---
2,339,000
3. Increased Use of Integrated Child and Reproductive Health and HIV/AIDS Interventions - Dev. Fund for Africa
---
11,800,000
---
---
---
11,800,000
3. Increase the Participation, Transparency and Accountability of Zambian Institutions in Civil Society - Dev. Fund for Africa
261,000
---
---
700,000
---
961,000
Totals - Dev. Fund for Africa
4,700,000
11,800,000
400,000
700,000
---
17,600,000
USAID Mission Director: Walter North
ACTIVITY DATA SHEET
PROGRAM: ZAMBIA
TITLE AND NUMBER: Reduce the State's Role in the Provision of Goods and Services, 611-S001
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $2,500,000 DFA
INITIAL OBLIGATION: FY 1996; ESTIMATED COMPLETION DATE: FY 2000
Purpose: To reduce the state's role in the provision of goods and services more efficiently produced by the private sector.
Background: The 1992 Zambian Privatization Act called for the transfer of control and management of 90% of the industrial sector (except for public utilities) to private ownership. USAID is the main donor in supporting the Government of the Republic of Zambia's (GRZ) program by facilitating the privatization of state-owned enterprises and improving the efficiency and business acumen of small- and medium-sized enterprises. USAID's assistance has created market opportunities for local and international investors and business, opened doors for private investment and freed-up public resources and talent.
USAID Role and Achievements to Date: The projected target of privatizing 50 to 75 companies by 1997 had already been reached by early 1996. As of September 30, 1996, 137 of 150 state-owned enterprises (SOEs) initially listed by the GRZ, had been privatized. The USAID-supported Zambia Communications Authority is in the process of issuing licenses to companies offering value-added services to the telecommunications industry, thus opening up the ZAMTEL-dominated telecommunications field. Zambia currently has two licensed cellular operators: ZAMTEL and TELECEL. ZAMTEL is operational and TELECEL (a company with U.S. interests) is expected to start operations in 1997. USAID also provides technical assistance and training to strengthen small- and medium-sized enterprises (SMEs), through in-country, hands-on training and technical assistance, workshops and U.S. scholarships.
Description: USAID has supported technical assistance to the Zambia Privatization Agency (ZPA) by a team of privatization consultants (merchant bankers, property consultants, business analysts) who assist the ZPA in the marketing and sale of SOEs. The project, which ends in November 1997, now focusses on the ten largest organizations, which are to be privatized over the next two years. By the end of the project, the privatization process will be complete for half the companies. The remaining companies will have reached the negotiations stage. The ten companies include utilities such as the Telecommunications Authority, a section of the Power Utility, and, most important for Zambia, the Zambia Consolidated Copper Mines (ZCCM). USAID's program to assist SMEs is having a direct impact on the privatization program by assisting the smaller privatized companies to survive, through the provision of specialized technical assistance and training in business and marketing skills, as well as through computer literacy and quality control.
Host Country and Other Donors: USAID is the leading bilateral donor supporting privatization. The World Bank is conditioning balance-of-payment support on progress achieved in privatization. Norway, Denmark, Germany, and the United Kingdom are the other major bilateral partners in this sector. The GRZ remains committed to privatization, and contributes the bulk of resources to undertake the program, in part through a fund composed of proceeds from deposits and sales of SOEs. Donor support speeds the process through the provision of technical expertise and advice which is otherwise not available or commercially affordable.
Beneficiaries: The Zambian business community, both large and small, who can receive adequate rewards for their initiative through privatization, a better enabling environment, training and technical assistance. In turn, all citizens will benefit from a stronger and more open private sector through employment opportunities and improved quality and diversity of products and services.
Principal Contractors, Grantees or Agencies: USAID implements the Privatization Support Project through the Center for Financial Engineering in Development (a consortium of companies including Deloitte Touche Tohmatsu, Eccles & Associates, Devman & Co., and Young and Rubican), IESC, Clark Atlanta University and ZACCI.
Major Results Indicators: Baseline Target Private sector share of gross 45% (1992) 60% (1998) domestic product Private sector share of formal employment 20% (1992) 60% (1998) Gross Government Revenues from sale of $80 million (1995) $1,500 million (1998) state-owned enterprises Number of privately registered businesses 5,000 (1993) 7,000 (1998)
ACTIVITY DATA SHEET
PROGRAM: ZAMBIA
TITLE AND NUMBER: Increase the Participation of Rural Enterprises and Communities in the National Economy, 611-S002
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 98: $2,339,000 DFA
INITIAL OBLIGATION: FY 94; ESTIMATED COMPLETION DATE: FY 2001
Purpose: To increase the productive participation of rural communities and enterprises in the national economy.
Background: The Zambian government recognizes that rural family views, wishes, accumulated wisdom and traditional practices are essential for cost-effective rural development. Revised agricultural policies, supported by USAID's Agriculture Sector Liberalization project, now allow farmers to decide which crops are most profitable and environmentally suitable. Natural resource policies place resource management more and more in the hands of rural communities.
Recently implemented, effective policies encourage private management of agribusiness, tourist, and natural-resource investments. Businesses are now able to establish mutually profitable relations with rural families. These relations promise improved rural-living standards, faster economic growth and natural-resource conservation.
With Zambia's small domestic market, agricultural exports are key to increasing rural family incomes. In 1995, Zambia doubled its agricultural exports in spite of widespread drought. Sugar, maize, coffee, tobacco, horticulture and floriculture exports represented more than 20% of total non-copper exports. Including lint cotton, cotton yarn and textiles, agriculture's contribution to non-copper exports increased to 47.5% or $95 million. With above average 1996/97 rains and harvests, agricultural exports should increase again.
USAID Role and Achievements to Date: Through grants to the Cooperative League of the USA (CLUSA), CARE, Africare and the Ministry of Tourism (MOT), USAID has increased the opportunities for rural families to improve their welfare. USAID uses success stories and lessons learned (such as CARE's innovative sorghum-seed distribution program and the recent finding that maize farmers can increase their incomes by 38% by selling in groups) to influence government and other donor policies.
CLUSA began promoting democratically self-managed, financially viable group businesses in June, 1996. CLUSA is working with 950 rural families in 57 groups, marketing over 15,000 90 kg. bags of maize; 5,000 kgs. of maize seed; 1,750 kgs. of sunflower seed; and 150 tons of fertilizer.
Under CARE's USAID-supported food security project, 365 farm households received sorghum- or cowpea-seed loans during the 1994 drought. Much of the seed was produced by village committees who managed the seed loan program. Seventy-four % of the loans were repaid, an extremely high repayment rate in Zambia. In 1995, 6,658 farmers received low-rainfall maize, sorghum, millet, cowpea and groundnut seeds. Management committees loaned some seed but much was passed between farmers through sale, barter or gift. Families extended their food stocks by three to five months by using environmentally appropriate seed. Some sold sorghum or sorghum beer to raise money to buy oxen or plows.
With the "Yenga Press" and improved sunflower seed, Africare, under a USAID grant, is developing a profitable, small-scale oilseed-processing industry. Starting with 50 kgs. of sunflower seed, the press makes 11 liters of cooking oil and 38 kgs. of livestock feed. Farmers crushing their own sunflower seed triple their harvest's value. Because of this, 1996 press sales are double 1995 sales. Over 1,300presses have been sold. Sunflower plantings in 1995 were up 32% from 1994. Sunflower harvests increased 95%, more than any other crop. Oilseed pressing has increased the incomes of over 10,000 rural families.
The Ministry of Tourism (MOT) channels wildlife hunting and viewing revenues to communities in protected areas. In 1995, communities used their 40% share of the $1.9 million in hunting revenues for schools, clinics, water points and conservation education. The MOT recently leased 34 formerly state-managed lodges to private operators. A portion of lease revenues will be managed by protected-area communities. Sharing wildlife incomes with rural families encourages resource conservation and reduces poaching. Under the Regional Natural Resources Management Project, USAID has been successfully working with Zambian NGOs, such as the Administrative Management Design for Game Management Areas (ADMADE), to conduct training programs for "Village Scouts" in game management and natural-resource conservation techniques.
Description: Under development activities funded through USAID's Agriculture Sector Liberalization project, rural associations are successfully taking the initiative in producing and marketing a wide variety of commodities, where previous government-guided efforts failed miserably. With adequate resources and sound technical guidance, voluntary associations - women's groups, peasant associations, rural group businesses - can improve rural family welfare because their initiatives closely reflect member needs, abilities and aspirations. Rural associations increase member incomes by effectively dealing with agricultural and natural-resource businesses in marketing products and services.
Host Country and Other Donors: CLUSA and SIDA's rural business activities are guided by a Ministry of Agriculture (MOA) steering committee. CARE activities are funded by CIDA and ODA and rely on government-agency expertise where appropriate. AFRICARE's project receives Netherlands, IFAD and World Bank financing and relies on MOA extension services. The EU, JICA, NORAD and ODA coordinate resource conservation programs with USAID.
Beneficiaries: Disadvantaged rural communities, people and animals in game management areas, small scale farmers, agribusiness operators.
Principal Contractors, Grantees, or Agencies: CLUSA, CARE, AFRICARE, World Food Program, Cargill Technical Services, Associates in Rural Development, New York Wildlife Society, MOT, MOA
Major Result Indicators: Baseline Target Non-Traditional Agricultural exports 44% (1993) 65% (1998) as % of total Agricultural Exports Agribusiness as a proportion 51% (1994) 75% (2000) of GDP Credit for rural enterprise 0% (1995) 3% (2000) (% of commercial bank lending)
ACTIVITY DATA SHEET
PROGRAM: ZAMBIA
TITLE AND NUMBER: Increased Use of Integrated Child and Reproductive Health and HIV/AIDS Interventions, 611-S003
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $11,800,000 DFA
INITIAL OBLIGATION: FY 1992; ESTIMATED COMPLETION DATE: FY 2002
Purpose: Sustainable Improvements in the Health Status of Zambians.
Background: Since 1970, Zambia's economy has been declining while population has been increasing rapidly, rising from 4.1 million in 1969, to 5.7 million in 1980, and to 9.2 million in mid-1996. During most of this period, Zambia was in a period of socialism that resulted in severe neglect of physical infrastructure and a decline in socio-economic indicators. The ability of the nation to recover from and cope with this combination of events has been further constrained by periodic droughts and an HIV/AIDS pandemic. The HIV/AIDs epidemic in Zambia appears to have evolved into a mature, endemic phase-- with Zambia being one of the most badly affected nations in the world. In 1996, it is estimated that there were between 250,000 to 300,000 cumulative cases of AIDS, with approximately 80,000 to 90,000 new cases occurring per year. This has a potentially high impact on political and economic stability and on the willingness of the population to cope with the challenges of the current program of reform and restructuring of the economy. To address this problem, the Government of the Republic of Zambia (GRZ) has embarked on a series of health reforms that will allow people greater access to both public- and private-sector health services, bring costs into line with the capacity of families and the nation to pay, and strengthen efforts to reduce preventable childhood deaths, control unwanted pregnancies and prevent and mitigate HIV/AIDS.
USAID Role and Achievements to Date: USAID is recognized by the GRZ and the other donors as the lead agencies providing support to ensure that high-quality health services are being provided in communities and health centers. USAID has led efforts to introduce state-of-the-art case-management training to reduce unnecessary childhood deaths from malaria, diarrhea, and pneumonia. USAID led the effort to improve access by high-risk groups to contraceptives and to improve HIV-prevention efforts and counseling. USAID promotes low-cost, sustainable technical interventions in child survival to combat the major causes of child mortality -- malnutrition, malaria, measles, diarrhea, pneumonia, and anemia. Redesign of the health-management information system, recent MOH acceptance of a new curative treatment policy to combat chloroquine resistance to enhance malaria survival, professional training for health-care workers, and preventive health resources are making basic health services for mothers, infants and children more accessible. In all these efforts, the private sector and communities are assuming a greater share of health-care delivery and the provision of health products.
Over 200,000 Zambians have been reached directly with HIV/AIDS-prevention education and over 12,000 have been trained to support HIV/AIDS-prevention and mitigation activities in their respective communities. Subsidized commercial condom sales continue at one of the highest per-capita rates (.76) in Africa. Condom sales since 1992 have surpassed 23 million and extend to all nine provinces nationwide. Prices have been raised to increase cost recovery while maintaining a noteworthy public health impact. The Family Planning Services Project provides improved quality family-planning services in all 23 MOH urban clinics in the capital city of Lusaka and has established an expanding system of network referrals. With this referral system, Zambians seeking family-planning counseling and services will know where to find the appropriate family-planning services. The GRZ approved the social marketing of an oral contraceptive (Safeplan), and marketing commenced in November, 1996. With assistance from USAID, the MOH has released new policy standards and guidelines for family planning that support increased access to family planning services.
As part of the essential health package, family planning, child survival and HIV/AIDS activities will belinked, and integrated services will be provided in both the rural and urban centers.
Description: USAID plans to extend promotive, preventive, and curative child-survival health activities into the existing health centers of all 61 districts and 9 provinces in rural and urban communities. The program involves cross-skill training among health-service providers and the establishment of a national system of quality control. USAID's is developing a results-oriented, impact reporting process and system and is helping to build the essential participatory environment among beneficiaries.
Activities to strengthen awareness of family planning are being integrated into approximately 100 health centers and hospitals. Interventions include (1) strengthening the quality of service delivery through improved training curricula and hands-on demonstration and (2) developing local community resources on a private basis to disseminate family planning materials and related information. An important element of these activities is the strengthening of community-based organizations that engage the spirit of volunteerism, reduce costs of service delivery, and enhance participation, thereby promoting the sustainability of activities.
Host Country and Other Donors: In the support of child-survival activities, USAID is the third ranking donor, behind the United Nations Children's Fund and Denmark. The United Kingdom, the Netherlands and Sweden are close partners in overall funding, but USAID is the primary donor in support of HIV/AIDS Prevention and Family Planning Service project activities and a lead donor in Child Survival. Interest in this sector has been sparked by the creative position the GRZ has taken in promoting public sector reform and decentralization of health services as a priority.
Beneficiaries: The main beneficiaries are the family and community users of district and sub-district health clinics, whose services are beginning to be expanded and made more responsive to local planning and initiative. Secondary beneficiaries are the health services delivery professionals who are becoming better motivated to staff the decentralized clinics because they have been given the authority, responsibility and resources to improve and expand quality primary health care services.
Principal Contractors, Grantees or Agencies: USAID implements Family Planning Service activities through CARE, John Snow Inc., Johns Hopkins University and the Population Council; HIV/AIDS Prevention activities through Project Concern International and Population Services International; and Child Survival activities through the Basic Support for Institutionalizing Child Survival Project (BASICS), a consortium of U.S. institutions and universities as well as a series of central USAID Cooperating Agencies (CAs).
Major Results Indicators: Baseline Target Contraceptive prevalence rate 9% (1995) 15% (2000) (modern methods) Per capita condom sales 0.76 (1995) 0.95 (1998) Children age 12-23 months fully immunized 67% (1992) 80% (2002) Reported condom use in most recent, 35% (1995) 55% (1998) high risk sexual intercourse Note: Field data for the 1996 Zambia Demographic Health Survey (DHS) will serve as a baseline for FY 98 and future year health activities. This will allow the GRZ and USAID to compare program impact change since the 1992 Zambia DHS.
ACTIVITY DATA SHEET
PROGRAM: ZAMBIA
TITLE AND NUMBER: Increase the Participation, Transparency and Accountability of Government Institutions in Civil Society, 611-S004
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1998: $961,000 DFA
INITIAL OBLIGATION: FY 1995; ESTIMATED COMPLETION DATE: FY 2002
Purpose: To increase the participation, transparency and accountability of Government institutions in civil society.
Background: In 1991 Zambia became the first English-speaking state in Africa to undergo a democratic transition. The term of office of the Movement for Multi-Party Democracy (MMD), which won the 1991 elections, came to an end in 1996. As 1996 elections approached, the MMD revealed an increasing willingness to abandon the values on which it won election in 1991 to ensure re-election in 1996. Constitutional amendments enacted in 1996 barred former president Kenneth Kaunda, the strongest rival for the presidency, from running in the election. The United States objected to limitations on the right of the Zambian people to choose their leaders freely and reduced its assistance program. Elections were held on November 18, 1996 under the amended constitution and employing a voters register which the United States viewed as flawed. Kaunda's party and six other opposition parties boycotted the elections and encouraged others to do likewise. The run-up to the election was tense, with threats of violence. Nonetheless, elections were held peacefully, some 30% of Zambians of voting age participated in the elections, and MMD President Chiluba defeated candidates from four other parties to win a further five year term. 500 candidates, including 100 independents and candidates from 8 other parties, contested for 150 parliamentary seats. MMD increased its representation from 125 in 1991 to 131 in 1996.
USAID Role and Achievements to Date: USAID supports activities that will (1) increase citizens' awareness of their civil rights and responsibilities and (2) promote independent and professional journalism. The goals of the activity are: 1) to achieve government accountability; 2) to assure that public decisions are accessible and effective; 3) to support the role of privately owned media; and 4) to encourage the conduct of free and fair elections. To achieve these goals USAID provides technical assistance, training, grants and modest amounts of equipment to training institutions, NGOs involved in civil society, and the GRZ. Some 40 civic-education NGOs have been supported in grassroots programs encouraging citizens to register, to vote, and to seek accountability from their representatives. While the United States decided not to support international monitoring of the 1996 elections, it was the major supporter of the Clean Campaign Committee, a coalition of 18 NGOs which campaigned to level the electoral playing field and avoid violence in the elections. Noteworthy accomplishments during 1996 included the level of turnout achieved and peaceful circumstances of the 1996 elections, the achievement of autonomy from government of the Zambia Institute for Mass Communication, and the adoption by Cabinet of a new Cabinet Handbook incorporating new procedures worked out in collaboration with USAID consultants.
Description: To continue fostering the Zambian democratic transition, in the face of problematic actions by the MMD government, USAID will continue to support civil society NGOs in their work of deepening democratic culture. Consideration will be given to continuing mid-career training for independent journalists through the now-autonomous Zambia Institute for Mass Communication. A new activity will be initiated in support of the judiciary, which, along with civil society NGOs and parts of the private press, has emerged as a pillar of democratic values.
Host Country and Other Donors: Among the principal donor institutions are the United Nations Development Program and the World Bank, who are supporting the public service and judiciary reform programs. The British have an ambitious program of support for governmental decentralization andfiscal responsibility and support the training of senior civil servants. Ranking behind these participants, the Nordic countries have joined with USAID in a focus on civic education, election monitoring, electoral reform, and constitutional reform. Donors meet monthly for coordination purposes. In response to the initiative of USAID to support qualitative improvement and training of journalists, the GRZ privatized the state-owned media training facility in 1996 including significant assets in plant and equipment. Host country contributions of NGO staff time and equipment are the principal resources for this activity.
Beneficiaries: The ultimate beneficiaries are the citizenry of Zambia. The immediate beneficiaries are the NGOs, journalists, and members of the judicial system.
Principal Contractors, Grantees or Agencies : GRZ, NGOs, Zambia Institute of Mass Communications, Michigan State University, Southern University.
Major Results Indicators: Baseline Target Public perception of good government 45% (1993) 50% (1998) performance Citizens who know their Members 50% (1993) 60% (1998) of Parliament Eligible voters registered 66% (1993) 70% (1998) Percent of voter turnout 45% (1993) 50% (1998) Journalists in private sector as share total journalists 24% (1993) 48% (1998)
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