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Protecting biodiversity to improve economic outcomes in Zambia

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Animals in Zambia?s protected areas are being depleted due to poaching. Animals in Zambia’s protected areas are being depleted due to poaching.

Designating terrestrial and marine landscapes as parks and protected areas is a central part of today’s conservation strategy to preserve biodiversity. As far back as 1996, the Zambian government reclassified the country’s tourism sector from a social category to an economic category. This was a strong recognition that the country’s rich biodiversity represented a significant tourism asset with considerable economic development potential. 

Today, about 40% of Zambia’s land area is home to many protected areas. This includes 20 national parks, 39 game management areas, 432 forest reserves, and 59 botanical reserves.  However, the full potential of Zambia’s protected area network and its ability to contribute to the country’s economic development has not yet been fully realized. These natural assets remain peripheral in economic development plans. Therefore, the Zambian government has demonstrated a solid commitment to biodiversity conservation through tourism. 

In 2019, Zambia’s tourism sector contributed 7% to the country’s gross domestic product. Within the tourism sector, nature-based tourism sector has steadily grown as tourists worldwide come to visit the country’s iconic waterfalls, rivers, and wildlife, thereby contributing to the country’s economic growth. Nature-based tourism anchored around protected areas is a powerful mechanism that generates economic activity through park fees, jobs, employment, local income generation, and foreign exchange earnings. It also builds social and cultural appreciation for wildlife, forests, and the natural world.    

In addition to serving as tourist destinations, protected areas are also a critical refuge for endangered biological resources, providing habitat and essential ecosystem services for human well-being.  Public investments in protected areas would help conserve biodiversity and support local economies, but the areas remain perpetually underfunded. To effectively manage its network of protected areas, Zambia’s government must find ways to financially sustain park operations, incentivize local communities to play a role in conservation, and address the threats to habitat connectivity.  

While there is a great deal of political will to enhance and tap into the economic potential of the tourism sector, there is less information on the economics and finances of tourism and protected areas. This is an issue reflected in a new report entitled Assessing the Economic Impact of Tourism in Protected Areas on Local Economies in Zambia, which is based on a study conducted by a team from the World Bank in collaboration with external consultants. The report’s authors carried out a study to make the economic case for the importance of public investments in protected areas to improve biodiversity outcomes and support economic development. Their findings highlight the importance of promoting sustainable and inclusive tourism in Zambia’s protected areas.  

The report is built around targeted surveys conducted to estimate the total direct and indirect benefits to the government and local communities from visitors to two of Zambia’s most important tourist destinations: the Lower Zambezi National Park and the South Luangwa National Park.  The team used an applied general-equilibrium approach to quantify the benefits of protected areas on local economies. This approach adopted the local economy-wide impact evaluation (LEWIE) and this enabled an estimation of the impacts of protected area-induced tourism on the local economies surrounding the two sites. The LEWIE model used micro-survey data of tourists, local businesses, and local households and econometric methods to construct models of firms, households, and household farms within local economies.   

Direct benefits include the income tourists spend at lodges and other tourism businesses, and indirect benefits include the spending of those tourism businesses and those employed in the tourism sector. Businesses and households directly affected by tourist spending create local-economic ‘spillovers’ by spending cash on goods and services supplied by other households in the local economy. These suppliers, in turn, spend their cash, creating new rounds of stimulus to local production and incomes. As impacts move through the local economies, they create local income multipliers.   

According to the analysis from the study, the South Luangwa National Park generates 7,191 jobs and creates wage income for 23% of the households in the local economy, which adds $10.7 million to total revenue. In addition, tourism from the Lower Zambezi National Park adds $2.4 million to the total income, from the 7,191 jobs generated and the wage income created for 23% of the households in the local economy. The study also examined the impacts of tourism on households in Game Management Areas and market towns near the two protected areas and discovered that although the benefits are not as significant as those for households near the two national parks, they are still substantial.   

Biodiversity is an economic as well as a natural asset 

The key findings in the report indicate that investing in protected areas is not just good for conservation but also benefits development. The revenue generated by the protected areas is an essential source of funding for biodiversity conservation. In terms of their income, Zambia’s national parks are not unlike other national assets. They contribute to economic development and poverty alleviation in surrounding communities while stimulating trade with the rest of the country. Through trade with villages and towns around the parks, benefits from nature-based tourism become diffused throughout the country. In addition, businesses and households in the capital city of Lusaka are better off when a tourist visits Lower Zambezi or South Luangwa National Park.  

Tourism in a post-pandemic economy 

Like other national assets, investing in protecting and maintaining protected areas is critical to ensure their future contributions to economic growth and development.  There is also an urgent and essential need to mitigate the impact of the COVID-19 (coronavirus) pandemic. The report’s simulations illustrate that a loss of tourist revenue around the two parks reduces local real monthly income by $0.62 million at Lower Zambezi and $2.5 million at South Luangwa. Since tourism has come to a standstill due to COVID-19, the revenues from protected areas have drastically reduced. In addition, there is a high risk that many tourism businesses will shut down permanently. As jobs are lost, and forest guards are dismissed, the management of protected areas is under threat. The study has emphasized the importance of investing in protected areas to improve conservation and spur development.  

Findings of the study have informed the development of the proposed Green, Resilient and Transformational Tourism Development Project (GREAT-TDP) to support resilient investment in the tourism sector for job creation, biodiversity conservation and green economic growth in Zambia.    


Urvashi Narain

Lead Economist; Environment, Natural Resources, and Blue Economy

Ngao Mubanga

Economist, World Bank

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