Zambia Policy Brief 2: An Inventory of existing financing solutions for biodiversity conservation in Zambia

policy brief 2 Zambia
Expenditure Review (BER)
Finance Plan (BFP)
Finance Solutions

a)    Between 2010 to 2017, donor funding financed 73% of Zambia’s national budget towards environmental protection. Government needs to take leadership in financing environmental protection given the dwindling Overseas Development Assistance (ODA).

b)    Between 2010 to 2018, budgetary allocation towards environmental protection remained at an average of 0.6% of the total national budget against 2.29% allocated towards agriculture subsidies over the same period (Farmer Input Support Programme-FISP). Given the failure of FISP to deliver against its primary objectives of increasing productivity and poverty reduction over the years of its existence, it is recommended that this subsidy be reformed i.e. greening it.

c)    Fiscal revenue that are derived from environmental or biodiversity fiscal measures must not be pooled in the consolidated account. Instead, they should have a separate account earmarked to fund environmental or biodiversity conservation projects only.

d)    Non-tax revenues collected by Ministries, Provinces, and Spending Agencies (MPSAs) charged with biodiversity conservation must be allowed to retain a substantial component of the revenue collected (i.e. 60%) to be ploughed back into biodiversity conservation.

e)    The minimum investment threshold of US$500,000 for investments to qualify for incentives under the Zambia Development Agency (ZDA) Act is too high. This needs to be revised downwards i.e.$50,000 if the country is to attract investments for pro-biodiversity conservation investments.

f)    Key biodiversity sectors notably fisheries, wildlife and water ought to explicitly be designated as priority sectors in the ZDA Act for potential investments in such sectors to qualify for fiscal incentives. The specific qualifying areas of investment outlined in the second schedule of Statutory Instrument No.17 of 2014-ZDA Act also needs to be revised to include these pro-biodiversity conservation investment areas.

g)    There has been a concentration on regulatory, fiscal, debt and grant instruments to finance biodiversity conservation in Zambia. It is essential to begin focussing on innovative financing instruments notably those that are market oriented (offsets, carbon markets, green or social and development Impact Bonds, impact investments etc), supported by risk mitigation instruments such a sovereign/public guarantees as well as disaster risk and related insurance products.