Poverty in Zambia: Assessing the Impacts of Trade Liberalisation in the 1990s1

Zambia is one of the poorest countries in sub-Saharan Africa and there is evidence that suggests that living standards worsened during part of the 1990s. There is evidence, using national poverty lines, that poverty increased between 1991 and 1996 by 20% among the those below a food-only poverty line and by 16% among those below a general poverty line (McCulloch et al, 2001). In 1996 an estimated 73% of the population lived on less than a dollar a day (World Bank 2000). Between 1996 and 1998, the last year for which comparable household survey is available, there have been reductions in poverty, although not sufficient to offset the rise between 1991 and 1996. The increase in poverty between 1991 and 1996 occurred during a period of fairly extensive economic reforms, including a stabilisation programme, reforms of agricultural marketing, privatisation, trade liberalisation and public sector reform. Given this, it is not implausible that the rise in poverty was caused by one or more of these policies, singly or in combination. Equally likely though is that not everyone will have been affected in the same way, that there will have been winners and losers from the reforms. The aim of this background paper is to summarise some of the key features of the changes in poverty between 1991 and 1998, disaggregating the findings by geographical location and other socio-economic categories. The paper will also summarise some of the essential features of the reforms in the 1990s and set out a number of alternative approaches for analysing the impacts of these reforms on poverty. Some preliminary results are then presented to motivate discussion.