Feasibility of Zambia’s intention to exit from depending on foreign aid as a tool for development financing.
Loading...
Date
2019
Authors
Makungu, Moses
Journal Title
Journal ISSN
Volume Title
Publisher
The University of Zambia
Abstract
Zambia has been classified as one of the poor developing countries in the world with a
monoculture economy that depends on copper as a main source of revenue. Revenues from
copper have been used to finance development since the time of independence. However, the
upward and downward fluctuations in copper prices during the 1970s and 80s resulted in budget
deficits. This forced the Country to resort to acquiring aid as additional resources to finance the
growing development problems. In 2014 and 2015, during the presentation of 2015 and 2016
National Budgets, Government of Zambia made public pronouncements that the Country would
embark upon the process to exit from depending on aid to finance development.
The study investigated the feasibility of Zambia’s intention to exit from depending on foreign aid
for development financing. The study was guided by three (3) specific objectives. The overall
objective was to find out whether it is feasible for Zambia to exit from depending on foreign aid
as a tool for financing national development. The first specific objective was to examine the
effect of foreign aid acquisition on the financing of national development programmes in
Zambia. The second specific objective was to analyse outcomes of the measures on Zambia’s aid
exit intent and the third specific objective was to establish the social, economic and political
implications of Zambia’s intention to exit from depending on foreign aid as a tool to finance
development.
The study used exploratory research design which was able to capture largely qualitative and
some quantitative data. The study sampled a total of thirteen (13) respondents of these
respondents, one (1) came from Ministry of foreign affairs, one (1) from Ministry of Finance,
two (02) from Ministry of National Development Planning and one (1) from Development
Economic Association of Zambia, one (1) from Institute for Policy Analysis and Research, one
(1) from Action Aid-Zambia, one (1) from Jesuit Centre for Theological Reflection, one (1) from
UKAID - Zambia, one (1) from Civil Society for Poverty Reduction, one (1) from Water Aid,
and two (02) Academicians from University of Zambia. Data for this research was collected
using in-depth interview guides and analysed using Qualitative Content Analysis method. In
addition, secondary data was collected through literature review.
The main finding of this study was that it is not feasible for Zambia to exit from depending on
aid as a major tool for development financing. It is only feasible for Zambia to exit from aid
upon meeting the three specific pre conditions namely; Expansion and strengthening of domestic
financial resource mobilization mechanisms, Prudent use of mobilized financial resources and
Strong and Sustained Political Will to Overcome Aid ‘Dependency Syndrome.’ The study also
revealed the following three specific findings. First, aid resources have been used to finance
development development especially the following social sectors education Health, Water and
Sanitation and Social Protection. Second, although Government intended to exit from aid,
Zambia does not have a comprehensive aid exit strategy in place to guide its aid exit intention.
Third, there are more negative than positive social, economic and political consequences if
Zambia decided to exit from aid a tool to finance development.
Therefore, this study recommends that the Government of Zambia should reconsider its intention
made in 2015 and 2016 National Budgets.
Key words: Foreign Aid, Aid Exit, Feasibility
Description
Thesis
Keywords
External debt--Zambia , Foreign aid--Zambia