Zambia Compact - Constraints Analysis

MCC’s evidence-based approach to its investments begins with a mutual understanding of a country’s main growth challenges. During the first phase of the compact or threshold program development process, MCC and the selected partner country, jointly conduct a constraints-to-growth analysis (CA). This analysis identifies the constraints to private investment and entrepreneurship that are most binding to economic growth in the country. The results of this analysis enable the country, together with MCC, to select activities most likely to contribute to sustainable, poverty-reducing growth.

The Constraints Analysis Report for the Zambia Compact highlights the following binding constraints to economic growth: 

1. Low levels of skilled human capital are at the root of the low employability of the Zambian population; 
2. Poor infrastructure services, especially electricity, road connectivity, rail infrastructure, and water supply and sanitation in rural and peri-urban areas; and
3. Coordination failures, as the country fails to provide sufficient non-traded inputs or complementary goods and services to help private investors to be profitable and competitive.