Zambia’s economic challenges are largely tied to vulnerabilities in the minerals sector, specifically copper prices, which have seen a dramatic decline. This decline has contributed to macroeconomic imbalances, culminating in a default on external debt in 2020. Furthermore, droughts have severely impacted millions, highlighting the interplay between environmental issues and poverty.
The World Bank Group (WBG) highlights that Zambia’s population faces numerous external and internal challenges that impede poverty alleviation. The economy’s health is heavily reliant on the minerals sector, particularly copper, and a significant drop in copper prices during the 2010s critically exacerbated macroeconomic instability. This instability is cited as a principal factor leading to the country’s default on external debt in 2020.
According to the Zambia Poverty and Equity Assessment Report published by WBG, the impact of droughts has been profound, affecting nearly 1.4 million people on average per drought. The most recent drought was especially severe, with projections indicating that it would affect approximately 5 million individuals. Such environmental vulnerabilities further aggravate the economic struggles faced by Zambia’s population.
The World Bank has identified the collapse of copper prices as a key contributor to Zambia’s economic difficulties, leading to the significant external debt default in 2020. Additionally, recurrent droughts continue to threaten the livelihoods of millions, complicating efforts to reduce poverty. Addressing these interconnected challenges is essential for Zambia’s long-term economic recovery.
Original Source: diggers.news
