Zambia's Economic Puzzle: Decoding the Interplay of Sectoral Contributions, Demographics, Trade, and Resources

Abstract

This study provides a comprehensive analysis of Zambia's economic development by examining sectoral contributions, demographic changes, trade activities, and access to resources. Using descriptive statistics, correlation analysis and regression models on data from the World Bank database analyzed using Jamovi software, the study examines how these factors interact and influence Zambia's GDP and overall economic growth. The results reveal that while agriculture and manufacturing have historically contributed significantly to GDP, their relative importance has declined over time as GDP has increased, reflecting a clear structural shift in the economy. Conversely, the contribution of the services sector to GDP has increased substantially, underscoring its growing role in Zambia's economic framework. The study also shows a strong negative correlation between sectoral contributions (excluding services) and GDP, suggesting underlying inefficiencies or structural challenges within these sectors. Demographic trends, including fertility rates and population size, have a minimal impact on GDP growth, suggesting that other factors play a more important role in driving economic development. Trade activity shows that exports have a positive impact on GDP, while imports, although substantial in volume, have a weaker and statistically less significant impact on growth. This underscores the critical role of export performance in Zambia's economic progress. In addition, the study finds a strong positive relationship between increased access to electricity and life expectancy, suggesting that infrastructure improvements are key to improving the quality of life. Although GDP growth has a minimal direct effect on life expectancy or access to electricity, improved infrastructure is strongly associated with better health outcomes. Overall, the study highlights the need for policies that address sectoral imbalances, promote export growth, support the expanding services sector, and improve infrastructure to foster sustainable economic development. These findings provide valuable insights for policymakers and stakeholders as Zambia continues its economic transformation.