DEVELOPMENT PLANNING LESSON NOTES (TERM 1 2022)

TOPIC STUDY GUIDE

1. Define the concept “Planning”
2. Describe the meaning of “development”
3. Describe “Development Planning”
4. Differentiate “Development Planning” from “Development Plan”
5. Explain the importance of planning
6. Discuss the purpose of planning
7. Identify the levels of planning
8. List and explain the types of planning
9. Discuss the methods of planning
10. Define the term ‘budget’ and identify its types
11. Describe National Budgeting process in Zambia
12. Discuss Fiscal Discipline in relation to budget implementation
13. Identify and analyse Zambia’s National Development Plans since independence
14. Explain the national long-term Vision 2030
15. Differentiate Micro from Macro Financial Institutions
16. Identify micro and Macro financial institutions that provide financial aid
17. Explain the functions of Micro and Macro financial institutions
18. Explain what is meant by “Indicators of Development”
19. Identify methods used to measure development.

1. Definition of the concept “Planning”

-Planning, also called “Forethought” is a process of organizing activities and
laying out steps required to achieve a desired goal.
-Planning therefore, involves the creation and maintenance of a plan.
-The plan must reflect systematically arranged steps, identified specific resources
and the time frame in which the specific goal will be achieved.
2. Development.
-It is the process of improvement from the old to something completely new.
-It can also mean the replacement of the old by the new.
3. Development Plan
- It is a component of country planning comprising a set of documents that outlines
government policies and proposals on how resources must be used in order to develop
the country.

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 4. National Development Planning
-It i is a deliberate effort by the state aimed at achieving certain set goals such as
raising the standard of living of people
-NOTE that Development Planning is about identifying the needs, collection and
allocation of resources, setting out objectives and strategies (steps) to achieve
developmental goals within the specified period of time.
5. Importance of Development Planning
-It predicts what the future should look like.
-It reduces the necessary time and effort of achieving a goal
-It provides against wastage of resources
-It provides a perfect mirror to tell if a country is making progress or not
-It provides an opportunity to implement development activities in a more organized
manner.
6. Purpose of Planning
The purpose of planning is to provide for;
- a statement of general objectives of economy and social policy
- an evaluation of progress achieved under the preceding plan.
- an assessment of current economic conditions especially national income, productive
and foreign trade
- the current social situation especially population changes, education, health housing
and social security
- estimates of the growth, or social component during the period covered by the plan.
- Measures designed to raise the rate of economic growth for example:- to stimulate
saving and investment and to increase productivity which are impossible to achieve.
- movement towards a sustainable growth

7. Levels of Planning
-Planning takes place at the following levels;
(a) Individual Level-----e.g. a farmer needs resources such as seed, fertilizer,
hoes/ploughs, money for labour, transportation of materials and so on. Therefore, a
detailed plan and a budget plan is required.

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(b) Community Level ---- The community needs to plan for community projects such as
construction of a school, clinic in terms of materials needed, cost of labour and the
source of funds for the projects.
(c) National Level ------Government needs a plan and budget for projects such as
construction of a bridge, roads, hospitals and schools.
(d) International Level -----e.g the United Nations Organisation has set out
international development targets known as the Sustainable Development Goals from
2015 onwards..

8. Types of Development Planning

Most plans fall under three categories. These include the following;
(a). Short Term Plan:
-It is a plan which may cover a short period from six months to one year.
(b) Medium Term Plan
-This is a plan that ranges from three to seven years, with five years as the most
popular choice.
(c) Long Term Plan
- It is sometimes referred to as the Long Range Development Plan (LRDP). It covers a
period of ten to twenty years and above.
Note: Long term plan is mostly needed for the implementation of capital projects such
as:
-Construction of Hydro-electric power Stations.
-Opening new Mines.
-Reforestation.
-Construction of new roads and railway lines.

9. Methods of Planning
-There are two methods of planning. These are
(a) Centralised Planning:
-This is the type of planning done by the central government without involvement of the
local communities.

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Problems associated with Centralised Planning
This kind of planning has brought the following problems in developing countries like
Zambia.
- Planning is normally dominated by expatriate advisors who know very little about local
communities
- Local conditions are not regarded.
- It lacks participation of the local community in its formulation and implementation
leading to lack of ownership of the outcome.
- Delays in approving the plan as it is referred to the headquarters before
implementation.
- It denies the local people the sense of belonging as they are by passed since the plan
is imposed in top-down fashion on local communities
(b) Decentralised Planning:
-It is sometimes called “Participatory Planning”
- This is planning done at the grassroots by involving the local communities.
Note: Since the year 2000, Decentralised Planning has been re-introduced in Zambia
through activity based budgeting plans in the community.

Advantages of Decentralised Planning

-there is speedy approval of plans since decision-making is done at local level
-it more democratic in nature as it allows local people to participate in planning process
-Plans initiated at community level are widely accepted and owned by the local people
-It is inclusive in nature
-It takes into account the local conditions of given communities

10. The Budget

-At national level, a budget is a forecast which reflects the balance between government
expenditure and revenue (income) for a specific period of time.
-At individual or family level a budget is simply an estimate of expenditure and income.
Types of Budget
-There are generally three types of budget. These include;

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(a) Individual / Personal Budget---- It is a finance plan that allocates future personal
income towards expenses, savings and debt repayment.
(b) Family Budget ---Like a personal budget, a family budget is a financial plan for
income and expenses. It is normally done monthly taking into account all sources of
family income and expenses.
(c) National Budget ---- This is a document which estimates the anticipated government
revenues and government expenditure for the financial year. The national budget is
sometimes called the Annual Financial Statement of the country.
-The national budget is prepared by the Ministry of Finance and National Planning. It is
presented to parliament every year by the Minister of Finance.

11. The Budget Process in Zambia

-Given below are the stages through which the national budget goes through:
Stage 1: Drafting of a Green Paper which involves compiling all requirements from
various ministries and other departments. (Note: Green paper in just the name of a
document and not that the paper is green!)
Stage 2: Consolidation of Green Paper--A consolidated Green Paper is sent to
cabinet for approval. After approval the Green Paper is then printed for circulation to
members of the public.
Stage 3: All Ministries receive Ceilings (Maximum amount each Ministry mush
budget for)----Cabinet send ceilings to all ministries, provincial and spending agencies
together with the timetable for discussions.
Stage 4: Completion of budget draft for cabinet approval ---- Cabinet discusses and
considers proposals or revenue measures included in the draft budget. Once approved,
the budget is now referred to as Estimates of Revenue and Expenditure also known as
the “Yellow Book”. The Budget Speech to be presented to Parliament is also prepared.
Stage 5: Presentation of Budget to National Assembly ---- The consolidated
proposed National Budget in now presented to the National Assembly as a Bill for
approval. The Minister of Finance presents the budget to National Assembly.
Budget Execution
-Budget execution simply means implementation of the budget. The Minister of Finance
informs Ministries, provinces and other Spending agencies whenever funds are
released for programme implementation.
-After the National Budget has been presented to National Assembly, two Bills are
prepared meant to formalize what is contained in the budget. These two Bills are:

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(a) The Supplementary Appropriation Bill
(b)The Excess Expenditure Appropriation Bill
The General Warrant (GW)
-It is a document that gives authority to the Secretary to the Treasury to release funds
for the implementation of programmes. The GW is only valid if it is signed by the
President.

12. Importance of budgeting and fiscal discipline in development planning

Fiscal discipline
-It means strict control of public resources.
-Therefore, budgeting and Fiscal discipline ensures strict control of public resources and
compliance in taxation and public expenditure
Importance of a Budget
-A budget is very important because;
(a) It is a control measure which helps government to control spend money wisely
(b) It helps government to equitably (fairly) spend money and allocate resources to all
needy areas
(c) It promotes accountability. This means that the government or any other citizen will
tell if money has been spent wisely or not.

Some measures put in place to enhance fiscal discipline.

-Government to cut its expenditure and directs its resources only on essential areas
such as education, health and agriculture.
-Punish Public officials who misuse or misappropriate government or public funds.
-Take measures to ensure compliance in taxation (Payment of tax)
-As much as possible avoid external borrowing unless that borrowing is towards
economic growth through productive investment such a agriculture and manufacturing.

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 13 ZAMBIA’S DEVELOPMENT PLANS
Since independence in 1964, Zambia has produced and implemented a number of
National Development Plans. Given below are the plans.
1. Emergency Development Plan (EDP)
-The plan was launched immediately after independence as the first step to restructure
the inherited colonial Capitalist economy.
-The colonial government had a national development plan known as the Capital
Development Plan (CDP) which covered the period from 1961 – 1965.
-but since Zambia had got her independence in 1964, an emergency development plan
was needed to align developmental programmes with the policies of the new
independent self government.
-The EDP therefore, provided a frame work for more comprehensive programs of
economic and social development

2. National Transition Development plan (NTDP)1965- 1966

Main focus of the NTDP

- to spend money on extension of transport, power and communications services
- It also focused on the improvement of agriculture and education. Primary and
secondary schools were built in each district.

3. First Development Plan (FNDP) 1966- 1971

Aims
-To diversify the economy from copper mining to agriculture and manufacturing
-To develop the rural areas
-To expand welfare services such as housing and building more hospitals
-To improve power and transport and communication services
-To create 100,000 new by the end of 1970

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 4. Second Development Plan (SNDP) 1972- 1976
Goals of the SNDP
- to increase and expand the diversification process initiated under FNDP.
- attaining self-sufficiency in food supplies and improvement in income
- expanding and diversifying industry and mining through import substitution by using
Local materials
- initiating measures for regional development
- linking educational programs to the countries manpower requirements
- improve the existing infrastructure such as power, transport and communication
5.Third National Development Plan (TNDP) 1980 – 1983
It had the following provisions:-
-Allocating investment funds and creating a base for the transformation of society
through socialism and Humanism
-Involving the private sector in economic and social development while taking into
account Socialist and Humanist ideas.
-Balanced development with regard to linkages between industry and agriculture
-Increasing the production of consumer and capital goods
-Fair income distribution and creating and egalitarian (Communal Society)
-Diversification of the economy and rural development
-Expanding education training facilities to speed up Zambianasation
NOTE: Zambinisation was a local term which meant a deliberate programme to train
Zambians in order for them to take up positions held by foreigners in various economic
and social sectors,

6 .Fourth Development Plan (FNDP) 1989- 1993

-Before this FNDP was developed, there was a plan called the New Economic
Recovery Programmee which covered the period from July 1987 to December 1988.
This plan was developed because of the worsening economic crisis caused by high
prices of oil.
The FNDP focused on:-
-Periodic review of the exchange rate and interest rates

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-The reduction of budget deficit to below 2% of Gross Domestic Product (GDP) by 1993
-A gradual reduction of subsidies so as to reduce pressure on the budget.
-Reduction in the annual growth of money supply to below 40% by 1993
-Reduction in the rate of inflation to below 20% in 1993
-Increase capacity utilization to above 70% of industrial averages by 1993
-Reducing the number of price controlled items to one by 1993

NOTE: The MMD Government under President Fredrick Chiluba abandoned National
Development plans. Therefore, between 1991 and 2001 there was no National
Development Plan, instead the government introduced Annual Cash Budgets.

7. Transitional National Development Plan (TNDP)-2002-2005

In 2002, the government, under President Levy Patrick Mwanawasa, re-introduced
National Development Plan which was expected to run from 2002 to 2005 and
thereafter, the fifth National development plan.
The major programme under the TNDP was poverty reduction strategy programme
PRSP the main focus of which was reducing poverty and the debt burden.

8. Fifth National Development Plan(FNDP) 2006-2010

The fifth National development was based on the Vision 2030 and covered the period
2006 – 2010. Some of the goals include:-
-Develop and rehabilitate infrastructure
-Develop and build human resource and capacity respectively
-Mainstream cross cutting issues such as HIVAIDS, gender, democracy, good
governance, human rights and environment
-Develop irrigation in both private and public sectors

9. Sixth National Development (SNDP) 2011-2015

-It covers a period from 2011- 2015
-Its main objectives were
- to speed up Infrastructure rehabilitation and development

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- to address cross-cutting issues e.g. HIV/AIDS.
- to embark on rural electrification.
To -promote economic investment and diversification
- Promote rural and urban water and sanitation
-embark on rural investment and poverty reduction

NOTE: The Sixth National Development Plan was revised in 2013 to suit the policies of
the new Patriotic Front Government under President Michael Sata

10. The Seventh National Development Plan (7NDP) 2017 – 2021

THEME

The SNDP was launched in 2017 with a theme “Accelerating development efforts
towards the Vision 2030 without leaving anyone behind”
The broad theme of the plan is “accelerating development efforts towards Vision 2030
without leaving anyone behind” with the primary goal of “creating a diversified and
resilient economy for sustained growth and socio-economic transformation, driven by,
among other things, by agriculture.” ... Enhancing human development
THE FIVE PILLARS OF THE 7NDP
There are 5 pillars or strategic development areas contained within the plan including:
1. Economic diversification & job creation.
2. Poverty & vulnerability reduction.
3. Reducing developmental inequalities.
4. Enhancing human development.
5. Creating a conducive governance environment for a diversified economy
The 7NDP also seeks to address the following issues:
- the impact and threat of climate change on development and humankind in general
- Promote the adoption of agricultural environment-friendly practices such as
conservation, crop rotation and less use of chemical fertilizers.
- Build a new capital city
--Construct more roads
-Plant 500,000 hectares of forests across the country
-promote cultural transformation

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-Fostering good neighbourliness
-nurture/promote extended family system
-Diversified export agriculture, tourism, mining an manufacturing industries.

11. The National Long Term Vision 2030

To enhance planning ,in 2002, the government came up with a long term national plan
known as vision 2030.
-The aim of the Vision 2030 is “turning Zambia into a prosperous middle-Income
nation by 2030”.
-It was excepted that by 2030, Zambians would live in strong dynamic middle – income
industrial economy to provide opportunities for improving the wellbeing of all.
The Vision 2030 would be achieved by the principles of:
- Gender responsive sustainable development
- Democracy
- Respect for human rights
- Good traditional and family values
- Positive attitude towards work
- Peaceful coexistence
- Private-public partnership
NOTE: All the National Development Plans that after 2002 were drawn in line with
the Vision 2030.

Functions of Micro and Macro-Economic Financial Institutions

a.Micro Financial Institution

- is an institution that gives financial assistance to individuals and entrepreneurs for
small scale projects.

Examples of Micro Financial Institutions in Zambia

-Zambia Social Investment Fund. (ZAMSIF)
-Women Finance Cooperative of Zambia
-IZWE loans
-MICROFIN

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-Bayport Finance Services

Functions of Micro Financial Institution

-Support projects that are initiated by and driven by the community.
-Provide soft loans to the group of people with low income.
-Provide financial assistance to entrepreneurs for small projects.
-Provide capital for starting small businesses
B. Macro-Financial Institutions
-Macro means large, thus, these are institutions which fund capital (large scale) projects
such as construction of schools, bridges, roads, railway lines.
Some examples of Macro-Financial Institutions and their functions
1.International Monetary Fund (IMF)
-is a specialised agency of UN which was set up in 1944. Some of the objectives
(functions) are:
-Promote International Monitory Cooperation.
-Promote stable exchange rates and maintain orderly exchange arrangement.
-Encourage full convertibility between currencies and an end to exchange controls.
-To shorten the period of balance of payment of member countries.
2.World Bank:
- It is also called the International Bank for Reconstruction and Development (IBRD)
established in 1944 and began to operate in 1946.
-This bank encourages capital investments for construction and development of all
member states.
-It gives loans for specific projects that are productive and provides financial assistance
for foreign exchange (loans are usually for a period of 20 years with 5 years grace
period).
3. African Development Bank (ADB)
-Was formed in August 1963 and started operating in 1966 (the headquarters are in
Addis Ababa, Ethiopia).
-It gives concessionary loans to member states. A concessionary loan is money given to
a country with no conditions attached.

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-It gives loans to specific projects that are productive and provides finance for foreign
exchange
- Loans are usually for a period of 20 years with a grace period of 5 years
4. Arab Bank for Economic Development in Africa (ABEDA)
-The bank was set up by the Arab league in 1973 and began operations in 1975. The
headquarters are in Khartoum, Sudan.
- It gives loans to specific projects that are productive and provides finance for foreign
exchange.
- Its main objective is to contribute to economic development in Africa.
- Like other Macro Financial Institutions, it gives loans for a period of 20 years and the
grace period of 5 years.

Indicators of development
-Indicators of Development are signs or measures that show whether or not there is
improvement in the country’s economy and people’s basic needs such as food, safe
clean drinking water, housing, education and health are met
(a) Gross National Product (GNP)
-GNP is also known as the National Income.
-GNP is the value (in monetary terms) of goods and services produced by citizens living
within a country and abroad in a year.
-It is the total value in monetary form of goods and services produced from the
resources owned by citizens within and outside the country normally per year.
-It helps the government to come up with policies and eventually increase the country’s
production levels.
(b) Gross Domestic Product (GDP)
- is the total value in money of the goods and services produced in the country per year.
Note: All products and services produced within the country are added up and
calculated in monitory form.
-The higher the GDP the stronger the economy or the more developed the country is.
(c) Human Development Index (HDI)
- This is a measure of human development using four (4) items:-
- Life expectancy at birth.

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- Adult literacy.
- Average years of schooling.
- Purchasing power of persons aged 25 years and above, expressed in dollars.
Note:
-If a country has high life expectancy at birth, a high adult literacy levels, a high average
of schooling and a high purchasing power per person, it is said to have a high level of
development
(d) Per Capita Income
- This is the average amount of money each citizen is expected to get per year. It is the
GNP of a country divided by the total population.
Per Capita income=GNP
total population

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EXAMINATION QUESTIONS FOR REVISION

1. 2019 GCE CIVIC EDUCATION PAPER 2

SECTION B: QUESTION 6: (Total Marks: 10)

Development planning refers to the deliberate effort by the state aimed at the
achievement of certain goals such as raising the standard of living of the people through
increased income returns.
(a) Mention the method of planning that does not regard the local conditions and
normally delays the approval of the local community. {1}
(b) Why is long term development plannning important for national development?
Give two reasons {2}
(c) State the National Development Plan the government of Zambia recently
approved in 2017. {1}
(d) Give two pillars that the above mentioned National Development Plan in (c) is
premised on. {2}
(e) Identify the three items that are used to measure human development by the
United Nations Development Programme {3}
(f) Which international institution lends money to third world countries that have low
human development index? {1}

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