Development 🌱

Development is the process of improving people's quality of life. It involves changes from old practices to new ones or replacing outdated systems with better ones. For example, building a new school 🏫, constructing a bridge 🌉, or opening a new mine ⛏️ are all forms of development. It also includes improvements in providing basic needs like food 🍽️, water 💧, and shelter 🏠.

Economic Development 📈

Economic development refers to the process in which a country experiences sustained improvements in the well-being of its people. This involves advancements in technology 💻, infrastructure 🏗️, healthcare 🏥, education 📚, and the overall standard of living.

How a Country Can Achieve Economic Development:

• Expanding Agriculture 🌾: Agriculture remains the backbone of many developing economies. Expanding agriculture means not only growing more crops to feed the population but also improving agricultural techniques, investing in irrigation systems, and promoting sustainable farming practices.
• Developing Industries 🏭: Industrialization is key to economic development. Developing industries means setting up factories and manufacturing units to process raw materials and turn them into finished goods.
• Improving Technology ⚙️: The use of advanced technology is crucial for enhancing productivity and efficiency in all sectors.
• Training Workers 👩‍🏫: A well-trained and educated workforce is essential for economic development.
• Improving Infrastructure 🚧: Good infrastructure (such as roads, electricity, and telecommunications) is necessary for economic growth.
• Encouraging Foreign Direct Investment (FDI) 💵: Creating an attractive environment for foreign investors can boost a country's economy.
• Promoting Trade 🌍: Open trade policies can enhance access to international markets.

Key Terms 🔑:

• Productive Capacity: The maximum potential of an economy to produce goods and services.
• Gross Domestic Product (GDP): The total monetary value of all finished goods and services produced within a country’s borders in a specific period.
• Standard of Living: The overall level of comfort, wealth, and material goods available to a person or society.
• Foreign Direct Investment (FDI): Investments made by foreign entities in another country.

Social Development 🤝

Social development refers to improvements in people's living conditions. It includes ensuring human rights 🕊️, good governance, access to education 📖, and healthcare 🏥.

Consequences of Lack of Social Development:

• Poverty 💔: The biggest challenge to social development.

Basic Human Needs 🛠️

Basic human needs are things that a person cannot live without and they can be categorized into goods and services.

Goods 🛍️:

• Goods: Tangible items like clothes 👗 or motor vehicles 🚗 that people can see and use.

Services 🏥:

• Services: Activities that benefit people but are not physical like education 📚 and healthcare 🏥.

Wants 💎 are things people desire but don’t need to survive, such as luxury cars 🚘, fancy furniture 🛋️, or expensive gadgets 📱.

Factors of Production ⚙️

Factors of production are things needed to produce goods and services. There are four main factors, including land 🌍 (natural resources), labor 👷 (human effort), capital 💰 (tools and machinery), and entrepreneurship 🚀 (the ability to organize and manage these resources).

Land 🌳:

• Land: This includes all natural resources like forests 🌲, rivers 🌊, and minerals ⛏️.

Labour 👩‍🏭:

• Labour: The physical and mental efforts of people working to produce goods or provide services.

Types of Labour:

• Skilled Labour 👨‍🎓: Workers who have received professional training like economists, lawyers, engineers, doctors, or teachers.
• Semi-Skilled Labour 👷‍♂️: Workers trained for a short period like factory workers.
• Unskilled Labour 🚜: Workers with little or no training like farm laborers.

Capital 💼:

• Capital: The tools, machines, and buildings used to produce goods and services.

Types of Capital:

• Working Capital 💵: Money used by businesses to pay daily expenses.
• Fixed Capital 🏢: Physical assets like machinery and land used to start or run a business.

Entrepreneurship 🚀:

• Entrepreneurship: The ability of people to take risks and combine the other factors of production to create goods and services. Entrepreneurs organize land, labour, and capital to start businesses.

Capital Accumulation 💰

Capital accumulation refers to increasing the production of capital goods like machines and equipment. Economic development depends on how much a country can accumulate capital.

Factors Affecting Capital Accumulation:

• Low income 💸: People with little money can’t save or invest.
• Spending habits 🛍️: People spending on luxury items like expensive cars save little or nothing.
• Extended family responsibilities 👨‍👩‍👧‍👦: Supporting large families makes it hard to save money.
• No future planning 📅: People who focus only on their current needs and don't save for the future.
• Lack of financial knowledge 📉: Many people don’t understand the importance of saving for investments.
• Poverty 💔: People in poverty often lack the resources to start businesses.

Banking 🏦

Banking is the process of saving and transferring money through financial institutions called banks.

Types of Banks:

• Central Bank 🏛️: The main financial institution that regulates other banks in the country. In Zambia, this is the Bank of Zambia (BOZ).
• Commercial Banks 🏦: Banks that offer services to the public such as savings accounts, loans, and transferring money.

Functions of the Central Bank:

• Safeguarding money 💰 for commercial banks.
• Keeping government revenues 💵 and handling foreign transactions.
• Issuing banknotes and coins 💵.
• Clearing cheques 🧾 and transferring funds.
• Lending money 💳 to commercial banks.
• Managing the national debt 📊.

Other Financial Institutions 🏦

Aside from banks, other financial institutions play a role in economic development:

• National Savings and Credit Bank 💳: Offers banking services especially to low-income groups.
• Development Bank of Zambia (DBZ) 🌱: Provides long-term finance for high-risk businesses like agriculture.
• Zambia National Building Society (ZNBS) 🏠: Helps people get loans to build or buy houses.
• Lusaka Stock Exchange (LuSE) 📈: A market where shares and stocks are bought and sold, helping companies raise money for investment.

Insurance 🛡️

Insurance is a system where people pay a small fee (called a premium) to protect themselves against loss, like damage to a car 🚗 or house 🏠. The insurer (insurance company) agrees to compensate the person in case of a loss.

Work Culture 🏢

Work culture refers to people's attitudes towards their work. It can be either positive or negative.

Negative Work Culture:

• People don’t work hard 😴 but expect to be paid.
• Wasting time ⏳ at work and only working when supervised.

Positive Work Culture:

• Working hard 💪 to meet productivity targets.
• Using initiative 💡 to complete tasks without needing supervision.
• Having a positive attitude 😊 towards all types of jobs.

A society with a positive work culture has higher productivity, which leads to better goods and services 🏆.

Formal and Informal Sectors 🏢🏠

Formal Sector: Includes government jobs, private companies, and large-scale farming. The government is the biggest employer in this sector.

Informal Sector: Includes small businesses, subsistence farming, and people working independently. This sector employs more people than the formal sector and contributes greatly to the economy.

Importance of the Informal Sector:

The informal sector plays a key role in reducing poverty and supporting national development. It provides jobs, skills training, and infrastructure like buildings and transport 🚧.

Sample Questions ❓

• Define development.
• What are the basic human needs? Explain the difference between goods and services.
• What are the characteristics of positive and negative work culture?
• What are the two types of capital?
• What factors affect capital accumulation?
• Apart from central and commercial banks, list other important financial institutions in Zambia.
• What are the three main forms of deposits attracted by commercial banks?
• Explain the difference between needs and wants.