The University of Zambia

School of Humanities and Social Sciences

Department of Literature and Languages

Name : Joshua Bupe.

Computer Number : 2020045281.
Course : Language for Academic and
Other Specific Purposes.
Lecturer : Ms. P.Chikuta.
Course Code : LAN1220.
Assignment Number : 3
Question : Describe the structural
constraints limiting Zambia’s economic response to
covid-19(formulate an essay outline)
The Zambian economy has been affected by the covid-19 which has caused the loss of a
number of human lives and this is certain in that human resource is a fundamental driving force
of every economy. According to the ministry of health, over one thousand two hundred (1200)
deaths related to the pandemic have been recorded, and this in return has instigated the
government to take up the task of implementing various policies as measures so as to respond to
the economic situation. However, these measures are being inhibited by structural constraints
which are characterized by the nation’s dependence on public debt, poverty which is
compounded by inequality and HIV/AIDS, the informal sector and the single economic based
situation of persistently relying on copper as the major export commodity.

1. The nation’s dependence on public debt poses a risk of debt distress.

1.1. The increased cost of meeting external debt payment affects the nation’s financial
reserves.
1.1.1. Servicing of debt accounts over seventy percent (70%) of government revenue.
1.1.2. Development in the sectors such as health and education etc. is decreasing as much is
spent on debt servicing.
1.1.3. Zambia has resulted in becoming the world’s first country to be debt default in the
time of the pandemic.
1.2. The value of the local currency has been affected by the cost of debt servicing.
1.2.1. The kwacha has lost a value of over twenty six percent (26%) against the dollar.
1.2.2. The levels of inflation are increasing due to depreciation.
1.2.3. Inflation has led to the increase in prices of goods and services.
2. The degree of poverty which is compounded by inequality and HIV/AIDS.
2.1. A single of every two Zambians has been found to be living below the poverty
line.

2.1.2. More than half of the population obtain incomes which are less than the poverty line.

2.1.3. The poor are already experiencing the socioeconomic impact of the covid-19.

2.2. Zambia stands as one of the countries with the highest classification of inequality.

2.2.1 More of the population resides in the rural areas and lack access to cash.

2.2.2. Less than seven hundred thousand (700,000) of the eight million (8000, 000) Zambians
in poverty have access to the social cash transfer program.

2.2.3. The pandemic has proved the social cash transfer program insufficient as it needs
immediate reformulation.

2.3. One in every eight (8) Zambians is HIV positive.

2.3.1 The country is confronted by HIV/AIDS while battling with covid-19.

2.3.2. Travel restrictions keep some of the international health workers off service.

2.3.3. A fifty (50%) decrease in HIV treatment could cause more AIDS related deaths.
3. The stipulated measures threaten the livelihoods of people in the informal sector.

3.1. The income earned by the people in the sector is obtained on a daily basis.

3.1.2. Difficulties are being experienced in the compliance with orders such as lockdowns
and staying home.

3.1.3. Some firms adhering to the new normal are challenged by loss of customers, decrease
in supply chain etc.

3.1.4 Restrictions on import and export of goods affects the currency causing low household
income which in turn affects the informal sector.

4. The single economic based situation of persistently relying on copper as the major export
commodity.

4.1. The prices at which base metals such as copper are purchased have been affected.

4.1.2. The decrease in copper prices is applying pressure on the rate at which foreign
exchange is earned.

4.2. The reduction in tax payment affects the availability of revenue in response to the
pandemic.

4.2.1 Reduced revenue poses the risk of expanding the budget deficit.

4.2.2. The social cash transfer program, education and health sectors etc. are affected due to a
decrease in budget allocation.

As the pandemic approaches a series of waves, the government should consider seeking
support and temporal adjournment of debt interest payment from multilaterals such as the
international monetary fund (IMF) and World Bank, introduction of techniques that are more
advantageous in the formulation of national and foreign stocks, economic diversification
from mining to alternatives such as agriculture ,allocation of funds through the disaster
management and mitigation unit(DMMU), inspection of food security, renovation of health
systems and protection of workers in the informal sector so as to prevent the upsurge of
poverty and ensure readiness and equality in restraining the pandemic.