Service

THE SERVICES SECTOR

Services are an important sector of any economy. They play a vital role in facilitating all aspects of economic activity. The provision of services cuts across all sectors of the economy. Producers and exporters of goods, for example, would not be competitive without access to efficient banking, insurance, accountancy, telecommunication or transport services. Access to high-quality services, in particular infrastructure-related services such as telecommunications, transport, and financial services, benefit the whole economy by increasing productivity in all sectors and are crucial for economic development. 


Performance of the Services Sector

The Zambian Services Sector has recorded substantial growth over the past decade. It now accounts for about 64 per cent of GDP and over 60 per cent of the formal labour force. By 2002, the overall growth rate of the sector was more than double that of the economy as a whole. Most of the growth has been recorded in the business services followed by the financial services sub-sector whose growth is attributed to, inter alia, proliferation of commercial banks and insurance services providers following the liberalization of the services sector in 1991. All the services sectors in 2004 registered a positive growth. The Tourism sector measured by activities in the hotels, bars and restaurants posted a growth of 5.5%. The growth in tourism was boosted by improved marketing and investments by the private sector and the increased frequency of flights to Zambia.

In terms of exports, the services sector continues to grow although it has constantly been in deficit. Zambia exports a number of services within and outside the region, especially in terms of movement of natural persons. Some of the export destinations for Zambia’s services include South Africa, Botswana, Burundi, Democratic Republic of Congo, Lesotho, Namibia, Rwanda, Tanzania and Zimbabwe. Services are also being exported to European Union economies, Switzerland, and the USA.