World Bank SEED Project PID 2001

Report No. PID10445
Project Name Zambia-Support to Economic Expansion and
Diversification (SEED):Tourism
Region Africa Regional Office
Sector Other Industry
Project ID ZMPE71407
Borrower(s) MINISTRY OF FINANCE AND ECONOMIC DEV.
Implementing Agency
Address MIN.TOURISM, MIN LOCAL GOV.& HOUSING,
MIN. COMM.,IND.& TRADE
Ministry of Tourism
Address: Box 30575
Contact Person: Emmanuel Kasanga, Economist
Tel: 260-1-224676
Fax: 260-1-223930/222189
Email: mintour@zamnet.zm
Ministry of Local Government & Housing
Address: Lusaka, Zambia
Contact Person: Dr. Glynn A. S. Khonje,
Director, Physical Planning &
Housing
Tel: 260-1-250996
Fax: 260-1-253697
Email: townplan@zamnet.zm
Environment Category B
Date PID Prepared May 3, 2001
Projected Appraisal Date July 31, 2002
Projected Board Date December 30, 2002
1. Country and Sector Background
Government strategy Tourism development has been a priority for a
number of years in Zambia but its growth has been on a relatively small
scale. As traditional industries have come under pressure (mining and
tobacco and cotton), Government has started to focus on tourism as a
source of growth and diversification of the economy. The Government is
also mindful to avoid the negative impacts tourism might have if
unfettered growth of tourism were allowed to proceed. Moreover, it
recognizes that the sector must address environmental, social and cultural
heritage issues if tourism is to be vibrant and sustainable. Zambia has
undertaken many macroeconomic reforms, which have produced the stability
conducive to private investment; and its citizens live in peace under the
rule of law. The basic economic framework is conducive to private
investment, including tourism. To encourage investment, however, the
Government recognizes that it: (a) must be a catalyst for growth by
ensuring that public institutions dealing with tourism are transparent and
effective; (b) build confidence in the private sector to make the
investments which will lead to enriching the range of tourism products and
services the country has to offer; and (c) provide basic infrastructure
such as roads, water and sanitation. This is demonstrated in the last two
years' budget where tourism was sighted as a top priority along with high
value added agriculture as the lynch pins of the new Zambian economy. A
study under European Union (EU) funding has led to a framework for tourism
that has found acceptance in both the public and private sectors. The
interim PRSP strongly endorses tourism as a source of growth and a way of
alleviating poverty through support for SMEs serving tourism, employment
creation and foreign exchange generation. The final PRSP is likely to
emphasize tourism as a sector that can create wealth and generate
employment in the poorest parts of the country and thus contribute to
better distribution of the benefits of growth to poorer communities,
provided that efforts are made to include communities in the earliest
stages of planning. The Government is committed to the growth of tourism
and is now ready to make the resources necessary for that to happen -
funding to underpin a strong approach to tourism would confirm the
Government's credibility and the private sector appears ready to do its
part. The Government has identified Livingstone and the Victoria Falls
(the Mosi-O-Tunya or "the Smoke that Thunders") as a priority for economic
expansion and diversification, based on tourism. The Victoria Falls is a
World Heritage Site. It is a strong magnet that has long attracted
tourists to the falls themselves as well as to its surrounding wildlife
and extraordinary cultural heritage. More recently the area has attracted
those seeking adventure and exotic surroundings in the nearby wildlife
areas, including the Mosi-O-Tunya National Park itself, the Kafue National
Park, Lake Kariba, and the Lower Zambezi Valley. A multi- million dollar
investment has also just been completed in Livingstone, where an
international resort developer has built two luxury hotels
2. Objectives
The project seeks to support the Government of the Republic of Zambia's
(GRZ) efforts to stimulate diversified economic growth and private sector
investment in the country, using tourism as an entry point. This is to be
achieved through public/private partnership for building an enabling
environment conducive to private sector growth, support for and
community-based development, and by preserving Zambia's extensive
cultural, natural and wildlife assets.
3. Rationale for Bank's Involvement
The Bank Group's comparative advantage is in policy, management of public
goods and intervening where markets do not appear to work. Due to its
capacity to respond to multisectoral needs of the sector in the form of
assistance in infrastructure, policy and capacity development all at once,
the Bank is also uniquely positioned to provide the much needed
coordination of the Tourism/Wildlife sectors in Zambia. The proposed
project covers all these aspects. There are major policy choices to be
made, notably to encourage private sector development in tourism, underpin
public policy with performing institutions and balancing trade-offs in
wildlife, environmental and community needs. Management of public goods
in the national park and wildlife system are central to the project's
sustainability and support for SMEs to "kickstart" tourism is crucial as a
new source of growth and diversification. The Africa Region recently
completed a study on "Tourism in Africa" and many of the lessons of that
report are incorporated in project design. The synergies within bank
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funded operations (i.e. ROADSIP, EDP, ESP, ERIPTA, URWSP) and between the
Bank, IFC (SME Group), FIAS and MIGA would be utilized. A number of
proposals for private sector development have already been communicated to
IFC and MIGA to explore the role these institutions can play in supporting
tourism investment promotion and guarantee operations. Discussions are
ongoing with the Business Partners for Development (BPD) group to develop
partnerships with active private sector operators in the sector (SUN
international). The project will also seek support from the new SME
department and focus the policy skills of the Bank and the transactions
skills of IFC to encourage greater participation of the private sector in
tourism.
4. Description
a/ Comprehensive development of Livingstone as Zambia's flagship tourism
destination -
(i) Development and rehabilitation of priority infrastructure in and
around Livingstone (including roads, drainage, solid waste/landfill
management, water supply, sewerage/sanitation, fire, health and social
services.
(ii) Updating of the 1995 Livingstone
Strategic Development Master Plan
b/ Securing the Environment for Economic Development - Protection and
conservation of Zambia's national wildlife assets:
(i) Development of the Mosi-oa-Tunya National Park as a model of intensive
economic use and biodiversity conservation.
(ii) Development of the Kafue National Park as a model of extensive
economic use and biodiversity conservation.
(iii) Financial and technical assistance for the development of ZAWA's
wildlife monitoring program in SEED-GEF target areas.
(iv) Support ZAWA's Community Based National Resource Management programs
in SEED program target areas
c/ Strengthen and stimulate creation of small and medium enterprises, and
community based projects in tourism and wildlife through creation of a
revolving fund accessible to small and medium scale enterprises and
community based initiatives in tourism related activities
d/ Regulatory reform and institutional strengthening for efficient
management of the sector and improved service delivery - Institutional
development and rationalization of mandates and capacity building for
various entities, both public and private:
(i) Ministry of Tourism
(ii) ZAWA
(iii) Livingstone City Council
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(iv) Zambia National Tourist Board
(v) National Heritage Conservation Commission
(vi) Tourism Council of Zambia
5. Financing
Total ( US$m)
Total Project Cost 35
6. Implementation
An Inter-ministerial Tourism Committee in under consideration by the
Cabinet and can become a critical institutional mechanism for assuring
coordination amongst the various players. It is envisaged to have private
sector participation to ensure liaison with operators and investors in
tourism. It will focus both on strategic and policy orientation. It will
be supported by a Technical Committee whose members will be drawn from
interested ministries, agencies and the private sector - this unit will be
the real engine for execution of the project. Each agency under the
project will be linked to the Technical Committee and appropriate
departments in these agencies will be strengthened to carry out their
functions. In specific cases, appropriate technical agencies will be
responsible for execution of related components (e.g. ZAWA for the SEED
GEF component). Until such time that the Cabinet approves creation of
this Committee, the Ministry of Tourism has agreed to oversee the project
coordination activities and has formed a project preparation team
comprising of representatives of the various ministries involved in the
preparation and implementation of the Project. A project preparation team
has been set-up comprising representatives of the Ministry of Tourism
(overseeing the institutional and policy development aspects of the
project), Ministry of Commerce, Industry and Trade (overseeing the SME
development aspects of the Project), ZAWA ( responsible for the Wildlife
management and implementation of the GEF component), the Ministry of
Local Government and Housing (overseeing the Livingstone Master Plan
Development preparation) and the Livingstone City Council - The Council
(overseeing the implementation of infrastructure developments in
Livingstone), and the Ministry of Environment represented by the GEF
focal point. German Development Services (ded) representative in Zambia
is also part of the preparation team as ded has expressed interest in
participating in project preparation through building the Council's
implementation capacity.
7. Sustainability
The project's objective is to support the Government of the Republic of
Zambia's (GRZ) efforts to stimulate diversified economic growth and
private sector investment in the country, using tourism as an entry point.
Without the project, the natural, architectural and cultural integrity of
the flagship Livingstone area, which attracts 76t of tourists visiting
Zambia, will deteriorate even beyond present levels and tourism will
decline. Unemployment in Livingstone has hovered around 90, recently. The
proposed improvements should generate increased private investment, which
will create income and employment directly and stimulate linkages to
production and service sectors, including in local communities. The
proposed institutional strengthening and capacity building will assist
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Zambia to improve its management of its wildlife resources and cultural
assets to improve the financial returns from tourism through increased
numbers of tourists, an increase in their length of stay, and greater
expenditures on goods and services, including handicrafts.
8. Lessons learned from past operations in the country/sector
There are no recent Bank financed tourism development projects.
International experience suggests that for tourism to be successful a
comprehensive and geographically focused approach is needed. Other
general lessons from the Bank's private sector development initiatives
are:Government ownership and support. Government commitment to and
leadership for private sector development, in particular, the tourism
sector, are essential to success. It is evident from the work done in
related sectors that the Government supports tourism
development.Leadership and strong implementation agency, with skilled
staff and empowered with appropriate authority an essential for the
success of any project.Keep stakeholders informed and to engage them from
early on in the project design. Preliminary meetings were held with local
government officials, councilors and chiefs from Mukuni and Luangwa. The
local communities through their chiefs have been consulted and have
assured the project team their communities maximum cooperation. As a
result, a series of public hearings have been scheduled and will be
conducted as soon as funds are available. These hearings and workshops
will move beyond a simple consultative process to engage the stakeholders
into full partnership in decision making and active participation in
implementation of the project in such a way that it would bring true
community support for the program.
9. Program of Targeted Intervention (PTI) Y
10. Environment Aspects (including any public consultation)
Issues Zambia already requires that EAs be undertaken for
tourism projects. The objective of the Project is to help the tourism
sector, which is largely based on natural assets, to become more
sustainable. The project will be designed to mitigate existing negative
impacts on the Victoria Falls, nearby Livingstone and on wildlife
stocks:i) update the IUCN 1996 study "Strategic Environmental Assessment
of Developments around Victoria Falls"" on the Zambian side and facilitate
coordination with representatives on the Zimbabwean side of the Falls; ii)
reduce pollution in Livingstone through improved solid waste and sewage
management, improved roads and drainage systems; this will benefit the
entire township not just the tourism sector;iii) introduce land-use and
zoning systems at the Falls, in Livingstone and in the Musi 0 Tunya
National Park, as well as architectural guidelines and building codes in
Livingstone to improve the visual environment and protect cultural
heritage;iv) assist rural communities to better manage their wildlife and
land resources, through land-use planning; and v) strengthen the capacity
of national and local institutions to undertake EIAs for tourism-related
constructions, particularly in GMAs, National Parks and on rivers.
11. Contact Point:
Task Manager
Mehrnaz Teymourian
The World Bank
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1818 H Street, NW
Washington D.C. 20433
12. For information on other project related documents contact:
The InfoShop
The World Bank
1818 H Street, NW
Washington, D.C. 20433
Telephone: (202) 458-5454
Fax: (202) 522-1500
Web: http:// www.worldbank.org/infoshop
Note: This is information on an evolving project. Certain components may
not be necessarily included in the final project.
This PID was processed by the InfoShop during the week ending July 13, 2001.
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