This Selected Issues paper analyzes sources of growth in Zambia. It assesses domestic debt dynamics and expenditure composition under two scenarios: first, the execution of the fiscal adjustment envisaged in the 2004 budget and in the medium-term framework; and second, the continuation of recent trends. The paper assesses movements in the external value of the kwacha using a number of different approaches. It also looks at developments in the real exchange rate and in differentials in rates of return on financial assets in Zambia and key financial centers.

The strategy underlying the Arusha agreement envisaged a three-year transition period, involving further national reconciliation steps, implementation of lasting power-sharing arrangements, and initiation of national reconstruction. To overcome poverty, Burundi should diversify its economy and establish new sources of economic growth. The increasing regional integration will also help to accelerate economic growth. The parallel market in Burundi is still sizable, and the exchange rate differential remains a source of financial distortion. The statistical data of economic indices of Burundi are presented in this paper.

This Selected Issues paper on Zambia reports that the authorities have outlined a range of alternative policy scenarios to achieve greater pro-poor growth. The thrust of these policies is to support higher growth in rural areas, where the incidence of poverty is particularly high, by investing more in infrastructure development, while also stepping up delivery of public services, notably in health and education. Implementing these alternative policies would require significantly more financial assistance from the donor community.