This striking graph confirms what Zambians may have suspected, both intuitively and through personal experience – it’s mining that is the main driver of the economy and helps to put money in people’s pockets.
GDP per capita is a country’s economic output divided by the population, and is hence a measure of the average income of each citizen. The graph shows clearly how this average income was influenced by Zambia’s steadily rising copper production from around 2000, when the newly privatised mining industry was heading into full expansion mode. Inevitably, these benefits were felt more in mining areas than in the rest of Zambia, and by some people more than others; but this does not detract from their overall effect.
When mining does well, Zambia does well
Mining companies such as First Quantum Minerals, Barrick, Konkola Copper Mines, Mopani, Chibuluma and others poured billions of dollars into new technology, new infrastructure and, of course, new employment. Existing mines were modernised and expanded; and brand-new mines were built too. By 2016, some $13 billion had been invested.
All this mine-driven activity spurred economic growth in communities, towns and the country at large. New businesses were created and expanded, new infrastructure was built and lots of indirect employment was created which far outnumbered the direct employment of the mines. This helps to explain the massive growth in average incomes as measured by GDP per capita. And as if to illustrate the link between mine production and average incomes, we see how GDP per capita starts to fall around 2013 as Zambia’s mining output starts to decline in the face of the global mining slump.
When mining does well, Zambia does well. Or to put it another way, when mining sneezes, the whole of Zambia catches a cold. This situation is likely to continue for so long as Zambia’s economy remains dependent on mining, which accounts for most of the country’s foreign earnings, most of its fixed investment, and a substantial chunk of government revenue.
See also: Copper production: Zambia vs the DRC