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World Trade Indicators 2009/10
Zambia Trade Brief
Trade Policyï€ import tariffs on various fuels, including diesel, petrol,
and kerosene, in June 2008. However, the government
Zambia undertook a trade reform program in the recently increased its import duty on fuel from 5
1990s, reducing import duties, eliminating import and percent to 25 percent to prevent two domestic oil
export license requirements, abolishing export bans, firms from collapsing.3
and introducing export incentives. According to its
MFN Tariff Trade Restrictive Index (TTRI)1 of 8.9
percent, Zambia is more open to trade than an average External Environment
Sub-Saharan Africa (SSA) country (11.3 percent) or
low-income country (11.6 percent). Based on the Zambia’s exports face a favorable trading
TTRI, it ranks of 88th out of 125 countries (where 1st is environment, especially when compared to the average
least restrictive). The agricultural sector is given a SSA or low-income country. Zambia’s Market Access
higher level of tariff protection (15.9 percent) TTRI4 (including preferences) is 1.4 percent, below
compared to the non-agricultural sector (8.6 percent). the SSA country group average of 3.9 percent and the
Zambia’s ad valorem tariffs comprise three non-zero low-income country group average of 5.6 percent. The
bands (5, 15, and 25 percent) with the fishing industry weighted average rest of the world tariff (including
and light manufacturing industries such as wood preferences) faced by Zambia’s exports is 3.3 percent,
products, manufactured foods, beverages, tobacco, with the rates for agricultural goods and non-
textiles, and leather facing the highest tariff rates. agricultural goods at 10.9 percent and 2.2 percent,
Zambia’s average MFN applied tariff has been mostly respectively. Over the course of 2008, the real
steady over the past decade and was 13.8 percent in effective exchange rate of the Zambian kwacha
2008. The maximum MFN applied tariff has increased depreciated by 5.4 percent, making exports more
in recent years to 72.8 percent. The trade policy space, competitive.
as measured by the wedge between bound and applied As negotiations between the Eastern and Southern
tariffs (the overhang), is 90.6 percent. Regarding its Africa (ESA) group and the EU towards a
commitment to liberalizing services trade, Zambia comprehensive Economic Partnership Agreement
ranks 82nd (out of 148) on the GATS Commitments (EPA) could not be completed prior to the December
Index. 2007 deadline, Zambia, with five other members of
Faced with rising food prices, Zambia banned maize the ESA group, initialed an “interim� agreement (but
exports in an attempt to ensure domestic food safety. with individual market access schedules) with the EU
The 2008 budget introduced export taxes of 15 in December 2007 to retain its preferences to the EU
percent on copper concentrates and cotton seed to market under the Cotonou Agreement. Its market
promote value addition of these products.2 Moreover, access offer was concluded on September 20, 2008.
in an effort to relieve its copper mining industry in a Zambia postponed signing the interim EPA, which
time of high oil prices, the government decreased was signed by ESA members Mauritius, the Seychelles,
Zimbabwe, and Madagascar in August 2009. The
country continues to negotiate a comprehensive EPA
with the EU as part of the ESA group. Zambia is also
Unless otherwise indicated, all data are as of August 2009 a member of the 15-country Southern African
and are drawn from the World Trade Indicators 2009/10 Development Community (SADC), whose Trade
Database. The database, Country Trade Briefs and Protocol, which was signed in 1996 and came into
Trade-at-a-Glance Tables, are available at force in 2000, culminated in the launch of a free trade
http://www.worldbank.org/wti. area in August 2008. The country also belongs to the
Common Market for Eastern and Southern Africa
If using information from this brief, please provide the (COMESA) which established a customs union in
following source citation: World Bank. 2010. “Zambia June 2009 and plans to fully implement it by 2012.
Trade Brief.� World Trade Indicators 2009/10: Country Trade
Briefs. Washington, DC: World Bank. Available at
http://www.worldbank.org/wti.
World Trade Indicators 2009/10 Zambia Trade Brief
Behind the Border Constraints Notes
Zambia ranked 90th in the Ease of Doing Business 1. TTRI calculates the equivalent uniform tariff that
index in 2009, which compares the business would keep domestic welfare constant. It is weighted by
environment of 183 countries. The Logistics import shares and import demand elasticity.
Performance Index (LPI), a measure of the extent of 2. WTO, 2009
trade facilitation, rates Zambia at 2.37 on a scale of 1 3. Global Trade Alert, 2009.
to 5, compared to 2.35 for the SSA region and 2.29 for 4. MA-TTRI calculates the equivalent uniform tariff of
countries in the low-income group. It ranks 100th (out trading partners that would keep their level of imports
of 150) in the world and 15th (out of 39) in the SSA constant. It is weighted by import values and import
region (with South Africa leading the regional group). demand elasticities of trading partners.
Among the LPI subcategories, its best performance is 5. IMF, 2009, p. 4.
in lowering domestic logistics costs while its weakest 6. Central Statistical Office—Zambia 2009, p. 6; Central
performance is in the quality of transport and IT Statistical Office—Zambia 2008, p. 6.
infrastructure for logistics.
References
Trade Outcomes
African Economic Outlook. 2009. “Zambia.� African
Real trade growth (in constant 2000 U.S. dollars) was Economic Outlook. July 8, 2009. .
further to 3.1 percent in 2009. Import growth was 15.3 Central Statistical Office—Zambia. 2009. The Monthly.
percent in 2008 compared to 16.2 percent in 2007, and Central Statistical Office—Zambia. June 2009.
was outpaced by export growth of 20.7 percent which .
2007. ———. 2008. The Monthly. Central Statistical Office—
Zambia. December 2008. .
percent in 2007, driven mainly by estimated import
COMESA. 2009. “COMESA Launches its Customs
growth of 38.5 percent, compared to 40.4 percent in
Union.� COMESA. July 24, 2009. .
commodity prices, as the bulk of its export revenue is European Commission. 2009. “Fact Sheet on the Interim
generated through copper exports. Thus, while the Economic Partnership Agreement.� European
country benefited from high mineral prices in the first Commission. January 2009. .
second half as prices of copper fell by about two- Food and Agriculture Organization of the United
thirds.5 Goods exports ended up registering an Nations (FAO). 2008. “Policy Measures Taken by
estimated growth rate of 10.4 percent, lower than the Governments to Reduce the Impact of Soaring
growth rate of 16.9 percent in 2007. Provisional data Prices—Africa—Zambia.� FAO. December 15, 2008.
from national statistics6 show that goods exports had .
already fallen by 44 percent in nominal U.S. dollar Global Trade Alert. 2009. “Zambia: Increase in Fuel
terms in the first half of 2009 compared to the same Import Duty to 25% from 5%.� Global Trade Alert.
period in 2008. However, recovering copper prices May 28, 2009. .
Services exports grew by 5.5 percent in 2008, International Monetary Fund (IMF). 2009. IMF Country
compared to 22.1 percent in 2007, and growth is Report No. 09/188. IMF. June 2009.
expected to continue to slow in 2009. Foreign direct .
Zambia Trade Brief World Trade Indicators 2009/10
SADC Today. 2009. “Implementation of SADC Trade
Protocol on Track.� .
Southern African Development Community (SADC).
2008. “Final Communiqué of the 28th Summit of
SADC Heads of State and Government.� SADC.
August 2008. .
The Zambian Chronicle. 2008. “Zambia Cuts Fuel Import
Tax to Cushion Users.� The Zambian Chronicle. June
26, 2008. < http://zambianchronicle.com/?p=787>.
World Trade Organization (WTO). 2009. Trade Policy
Review—Zambia. WTO. June 23, 2009. .