The role of the construction sector in influencing natural resource use, structural change, and industrial development in Zambia

The construction sector plays a critical role in delivering quality infrastructure, which in turn influences the use of natural resource revenues towards achieving structural change and industrial development. We use industrial organization and political economy lenses to describe and understand the organization of and changes in the construction industry in Zambia, focusing on demand-side factors; supply-side issues; market interactions through pricing and costs; and public institutions, regulations, policies, and structures. We establish the main firm-level, industry-wide, and macroeconomic bottlenecks affecting Zambia's construction sector and offer options for dealing with the key bottlenecks. In particular, we suggest: institutional reforms and legal and regulatory changes governing procurement and contracting rules and systems; training and other capacity-building programmes; greater access for local contractors to existing financing sources, including the Skill Development Levy; a review and update of the local content and subcontracting strategy and policy; and state-supported and -financed/-resourced research and development programmes

Understanding the implications of the boom-bust cycle of global copper prices for natural resources, structural change, and industrial development in Zambia

This paper is about understanding the cycle of global copper price booms and busts over Zambia's economic history. We explore how the mining industry has been managed, and wider economic management during boom periods. We find that successive Zambian governments did not use copper revenues to accumulate productive assets, focusing instead on financing consumption subsidies and sustaining inefficient state-owned companies. In recent times, Zambia has accumulated worryingly high levels of sovereign debt with virtually no prospect of official debt relief. Nonetheless, a reasonable chance exists of avoiding debt distress, provided the authorities consistently pursue strong fiscal management and discipline. Ultimately, Zambia's ability to ringfence and prudently use the mineral revenues from copper mining in building productive capacities remains elusive. Instead recurrent consumption expenditure demands dominate the fiscal landscape and the agenda of the fiscal authorities