THE International Monetary Fund (IMF) mission says Zambia has continued to record growth in the economy on the back of prevailing high copper prices on the global market.
And the IMF has commended Zambia on the B+ rating by Fitch Rating Agency saying it will bring the country at par with rated countries that have sound economies.
The IMF team, headed by IMF division chief for African department George Tsibouris, has been in the country on its routine mission to review Zambia’s macro-economic performance.
Mr Tsibouris said Zambia has performed well with continued high prices of copper along with some improvement in other sectors such as construction and tourism.
He said this in an interview in Lusaka on March 15.
“Zambia’s economy has done quite well, both in terms of economic growth and fiscal programmes. Copper output and prices continue to be high with broad-based growth in construction and tourism,” he said.
Mr Tsibouris said the trend is expected to continue in 2011 with the outlook generally positive on account of good economic fundamentals such as low inflation rate, interest rates and stability in foreign exchange rates.
He said international reserves remain relatively strong with reserves standing at about US$2 million.
He, however, said that external factors such as increased food and fuel prices will impact on the standard of living.
Mr Tsibouris arrived in the country on March 3 and has held a series of meetings with Government, Bank of Zambia, civil society and business organisations. He is expected to issue a detailed statement on March 16.
The IMF conducted discussions for the sixth review under the Extended Credit Facility from March 3-16, 2011.
On the rating, he said the assigning of a B+ status by an independent agency is a good thing as it will enable Zambia to compare favourably with other countries that have been rated and give the country an opportunity for borrowing.
Mr Tsibouris cited countries such as Kenya, Angola and Ghana as some of the economies with sound economic standing that have a similarity with Zambia’s rating status.
He also commended Government for the intention to issue a 500 million euros bond but was quick to say that it is important to manage the money that will be raised to projects that will generate economic growth, create jobs and additional taxes.
He said there is one more independent rating agency to give its objective assessment.
“It is a good thing…I don’t think the other rating agency will be influenced by the recent rating because it is independent and as such will carry out an objective assessment,” he said.
Early this month, Zambia was rated B+ for long-term foreign and local currency Issuer Default Ratings by Fitch Ratings.
Government appointed Fitch Ratings and Standard and Poor’s rating agencies to provide an independent and prospective credit opinion on Zambia.
[Zambia Daily Mail]
Much as we appreciate the so call growth it is not being translated into the good living standards of the General People The general cost of things in shops is increasing and the income seems to be on the same level. Could this growth be felt somewhere else by others.
Zambia just needs sustained growth over a long period of 15 to 30 yrs for most zambians to start seeing improved living standards.Economic growth takes time to trickle down and the Chinese and South Koreans will acknowledge it took time to make appreciable difference in their lives.Zambians need to start being active participants to get benefits of growth otherwise the current overepresentation of foreigners in important sectors will only result in export of that prosperity.
Economic growth based on high copper prices! So what happens when the price starts going southwards like it did in 1974? I presume the so called ‘growth’ will come to a halt. Besides the people who have enjoyed this growth are the Canadians, Chinese, Swiss, Indians, Australians and South Africans who own the mines and profit from this ‘growth’.
we are doing well ideed no wonder mealie meal prices have gone down and the cost of food basket for average family has come down. kapenta fish beans bunga and vegetables prices have come down. for pipo in diaspora may not feel it bcos the depend on cheese bread chips and modified foods
Thumbs up to Mwanawasa & Magande for laying a good economic and socila platform.Gratitude to RB & Musokotwane for carrying on the platform.
Thank God for taking chililuba & his clans away from us.atlast we are safe from plundering.
No.2 Enka Rasha, you are very right. Unfortunately most people including most bloggers do not understand these economic issues. A sound economic base is need for both quantitative and qaulitative development to occur. Well done Mwanawasa and well done RB for keeping the momentum. No room for monkey business any more.
what do ther say growth economy has improved i wonder what ther mean cause have a nice meal ned 20 dollars which in other countries its a lot of monies ad again coming to fuel its on high price, IMF i think is not correct with ur statement here poverty still major factor we when we see our fellow Zambian can afford to eat 3 times a day then ur statement i will agree with it!!!!!
#5 pavillon and #6 go deeper you not far from the truth
#2 & 6 you guys are right. zambia needs to maintain the path it has take. i think 10 year on this path will lead to an economically strong zambia. now need gov to continue borrowing less in from the local economy and hopefully this will lead to reduced lending rate. this will in turn make it feasible for zambians to borrow and make big investment. but gov also needs to continue to pull out of actively participation in the local business leaving room for private players.
that is why i personally have been wanting for the leading presidential candidates to outline their economic plans so we can make informed choices on polling day.
i think instead of being a major economical player gov needs facilitate an environment where citizens can borrow money at a fair rate.they need to pressure the lending institutions to make reasonable demands on potential business owner. proving funds that are run by professional institutions such as banks, micro-finance agents are good ideas.
The problem is that this growth is an artificial one since the mines are making money of which 80% goes to india, china and australia and never re-invested to create opportunity for all Zambians. in other words we are making money for others thus we are getting poorer.
we simply need to shake off the phobia of foreigner no country on earth has developed without foreigners. i dont think zambian are becoming more poorer.in fact the CSO report for 2010 show that income for household and other indicators are on the upbeat. lets do a bit of working and less complaining. and beside national generally tend to blame foreign nation in nearly all countries
” Mr Tsibouris said Zambia has performed well with continued high prices of copper along with some improvement in other sectors such as construction and tourism. ”
In other words, Zambia didn’t perform well, copper prices performed well.
The big reason being that this corrupt MMD government refuses to tax the mines so the rest of the economy can benefit. ‘Some improvement’ in construction and tourism when copper prices are at record highs simply isn’t good enough.
#13 Mrk, You have been one of the consistently negative people on this blog. Please allow me to remind you, first that the money that has been invested in Lumwana and other mines are huge amounts of foreign money. These investors need to recover this borrowed money. That is the reason for giving owners a period in which to recover their money and make profit. Mining investments are expensive everywhere and you should study the case of Australia which is a mining country too. Secondly, it takes time for the benefits of investments to trickle down. Our country is just taking off now. You will not be able to recognise Zambia in another ten years. You can just see from the amount of construction going on. This is the time to maintain momentum. Let us keep cheap politics out.
We should realise that the copper boom wont last for ever so this notion of it takes time to trickle down is just a way of giving investors time to bag the cash and go. When times get bad, they will abandon ship and we will be left with depleted resources with no cash flow. The time to reap is now
#13 MrK the Ignorant, aka Discredited Liar.
#15 Its Me, ask MrK whom I have taught how Chile is reaping the benefits of long term policies that encouraged the growth of its copper industry to its number 1 status today. But MrK tells you lies, please come back to me.