Zambia's Infrastructure

Abstract

Infrastructure improvements contributed
 0.6 percentage points to the annual per capita growth of
 Zambia's gross domestic product (GDP) over the past
 decade, mostly because of the exponential growth of
 information and communication technology (ICT) services.
 Poor performance of the power sector reduced the per capita
 growth rate by 0.1 percentage point. Simulations suggest
 that if Zambia's infrastructure platform could be
 improved to the level of the African leader, Mauritius, per
 capita growth rates could increase by two percentage points
 per year. Zambia's high generation capacity and
 relatively high power consumption are accompanied by fewer
 power outages than its neighbors. But Zambia's power
 sector is primarily oriented toward the mining industry,
 while household electrification, at 20 percent, is about
 half that in other resource-rich countries. Zambia's
 power tariffs are among the lowest in Africa and are less
 than half the level needed to accelerate electrification and
 keep pace with mining sector demands. Meeting future power
 demands and raising electrification rates will be difficult
 without increasing power tariffs. Zambia's
 infrastructure situation is more hopeful than that of many
 other African countries. Infrastructure spending needs,
 though large, are not beyond the realm of possibility, and
 Zambia's resource wealth and relatively well-off
 population provide a more solid financing basis than is
 available to many other countries. Zambia's
 infrastructure funding gap, though substantial, can be
 dramatically reduced through measures to stem inefficiencies
 and lower costs.