Editing Economy of Zambia (section)

=== Chiluba's economic reforms (1991–2000) ===

Zambia's Economic System of Government is Unitary because of that the [[Frederick Chiluba]] government (1991–2001), which came to power after democratic multi-[[political party|party]] elections in November 1991, was committed to extensive economic reform.<ref>{{Cite book|last=Chiluba|first=Frederick|title=Democracy: The challenge of change|publisher=Lusaka: Multimedia|year=1995|isbn=9982300539|location=University of Zambia Library}}</ref>{{page needed|date=July 2021}}

Zambia's  economic  transformation  into  a  free  market  system  began  toward  the  end  of  1991  following a change of government. To tackle a serious economic crisis, the government agreed to introduce substantial economic reforms to secure much-needed loans from the World Bank and IMF.<ref name="CR">{{cite web |date=19 May 2021 |title=Zambia Country Report 2020 |url=https://www.bti-project.org/content/en/downloads/reports/country_report_2020_ZMB.pdf |access-date=19 May 2021 |website=BTI Transformation Index}}</ref>

One of the greatest challenges was the privatization of the country's copper mines, Zambia's prime export earner. The government [[privatization|privatised]] many state industries, and maintained positive real [[interest rate]]s.  Exchange controls were eliminated and [[free market]] principles endorsed. It remains to be seen whether the [[Levy Mwanawasa|Mwanawasa]] government will follow a similar path of implementing [[economic reform]] and undertaking further privatization.  Zambia has yet to address issues such as reducing the size of the [[public sector]], which still represents 44% of total [[informal sector|formal employment]], and improving Zambia's [[social sector]] delivery systems.

After the government privatized the giant parastatal [[mining]] [[types of companies|company]] [[ZCCM Investments Holdings|Zambian Consolidated Copper Mines]] (ZCCM), donors resumed balance-of-payment support. The final transfer of ZCCM's assets occurred on March 31, 2000. Although balance-of-payment payments are not the answer to Zambia's long-term debt problems, it will in the short term provide the government some breathing room to implement further economic reforms. The government has, however, spent much of its [[Foreign exchange market|foreign exchange]] reserves to intervene in the [[exchange rate]] mechanism. To continue to do so, however, would jeopardize Zambia's debt relief. Zambia qualified for [[Heavily Indebted Poor Countries|HIPC]] debt relief in 2000, contingent upon the country meeting certain performance criteria, and this should offer a long-term solution to Zambia's debt situation.