“Despite the country’s robust economic growth, evidence shows that its urban labor markets are not creating enough of the kinds of jobs that will propel inclusive growth and maximize Zambia’s “demographic dividend.” Real wages declined between 2012 and 2014 in both Lusaka and the Copperbelt – the country’s two heavily urbanized provinces where two-thirds of its city-dwelling population lives. In Lusaka, urban workers earned nearly 17 percent less in real terms in 2014 than in 2012. In both Lusaka and the Copperbelt, the number of unpaid family workers is still growing faster in absolute terms than the number of paid workers. Most urban employment growth is taking place in low-productivity informal services. And several of the sectors where urban jobs are concentrated and growing are in fact declining in terms of their contribution to Zambia’s overall GDP – an early warning that productivity may not be rising fast enough to sustain continued job growth in the long run. These data predate the economic slowdown, which is likely to exacerbate the trends. This report calls on the Zambian government to make job-rich urbanization a top policy priority. Urban economies are predisposed to create quality jobs because of their internal and external economies of scale, but the positive relationship between urbanization and quality employment creation is not inevitable. It depends on the extent to which governments strengthen the economic base of cities and create the spaces and enabling environments for productive economic activities.”
