Working Paper
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.