THE Government has said the economy is expected to grow by 6.6 per cent this year, an upward revision from the earlier projection of five per cent. This has been attributed to the good performance of the various sectors of the economy.
The Government had initially in the 2010-2012 Medium Term Expenditure Framework (MTEF) projected that the economy would grow by five per cent. According to the 2011-2012 Green Paper released by Secretary to the Treasury Likolo
yesterday in Lusaka, the revision of the growth target was on account of better than expected performance in several sectors of the economy during the first half of 2010.
“The agriculture sector recorded the largest maize harvest in history of approximately 2.7 million tones compared with the 1.8 million in the previous season.
“With this bumper harvest, growth in the agriculture sector is now projected at 7.7 per cent, which is 5.7 percentage points higher than the initial forecast,” he said.
Mr Ndalamei said a recovery was expected in the tourism sector following indications that spill-over effects from the 2010 World Cup were better than expected.
He said increased demand for the international travel is expected to contribute to the growth of the sector.
He said copper out put in the first half of 2010 increased by 10.2 per cent to 363,682 tonnes compared to the first half of 2009 when a total of 330,125 tonnes was produced.
He said this was attributable to the resumption of production at the Luanshya Copper Mines as well as an increase in production at several other mining companies.
“With production expected to increase during the third quarter of 2010 total production is now projected at 740,000 metric tonnes, eight per cent higher than the 696, 900 metric tonnes produced when the average price was US$4,034,” he said.
On inflation, Mr Ndalamei said the annual inflation rate declined to 8.4 per cent in July 2010 from the 14 per cent in July 2009.
“Weaker copper prices and the strengthening of the US dollar against the Euro during the first half of 2010 affected the exchange rate of the Kwacha against major currencies. This led to a 8.5 per cent depreciation of the Kwacha against the US dollar from K4,687.89 in December 2009 to K5,122.89 at the end of June 2010,” he said.
The secretary to the treasury said the macroeconomic framework for 2011-2013 will focus on maintaining macroeconomic stability and building on the gains achieved during the last MTEF.
He said the transport and communication sector is also expected to continue expanding with the recent privatisation of Zamtel and the liberalisation of the international gateway and the imminent launch of the 3G services in the country.
“The implementation of economic diversification, policy and structural reforms over the last MTEF period is also expected to unlock further growth over the period,” he said.
On the fiscal policy outlook Mr Ndalamei said government will adopt an expansionary fiscal policy stance in order to accelerate investment in infrastructure and social sectors.
He said the expansionary stance will be within sustainable and acceptable fiscal limits so as to ensure that macroeconomic stability is not threatened.
On the external outlook the secretary to the treasury said although a full global recovery is expected during the current MTEF there continues to remain uncertainty from turbulent financial markets and a general lack of investor confidence.
He said Government was committed to accelerate private sector investment so as to achieve increased and diversified growth.
Government would, therefore, continue to create a vibrant and enabling environment for both domestic and foreign investment.
On aid policy and management strategy, he said it is expected that the country should reduce on dependence over time.
He said the Government in collaboration with cooperating partners is in the process of developing a new Joint Assistance Strategy for Zambia within the framework of the Paris declaration to succeed the one developed for the FNDP.
He said external borrowing will increase significantly during this MTEF period in order to finance economic infrastructure that is urgently needed across the country.
“The Government expects to contract approximately US$2 billion to support the financing of various infrastructure projects during this MTEF period,” he said.
Development assistance from cooperating partners has been particularly unpredictable over the last two years.
The weaknesses in financial management in the health and road sectors led to the suspension of aid assistance to these sectors and general Budget support.
Mr Ndalamei said however that having achieved economic stability government’s focus over the medium term would be to embark on a bold and ambitious investment and diversification strategy.
And Government has implored ministries, provinces and other spending agencies to measure every Kwacha against the guiding principle of “value for money” in both budget preparation and execution.
[Times of Zambia]
Well, we cannot be fooled by these baseless percentages.
Wenye wanu! Nansoni muliye
This is great news.
Great news. Well done HERB. What exactly is the PF policy towards the economic growth? Yesterday they wanted to tax the mines to the hilt now they have or shall I say Sata has changed his mind. Kaya.
The growth of 6.6% can be compared to that of most of Asian countries including some in the BRIC economies. With such growth, therefore, we need to be well off, but we are not. We need to exploit advanced economic factors such as improved telecommunication networks, value adding industries such as car manufacturing, cable and rods manufacturing ( ZAMEFA was a good start) and others such as high skilled labour through education – at least the minimum standard should be first degree. The dependence on natural factors such as extracting copper for export and bumper harvest for farmers without property rights is a dillusion and if this is what is growth of 6.6% we are not well off than war torn countries with high growth and yet are hunger sticken. Let us explore advanced economic factors.
And the inflation rate is at 8%+. Ma rubbish!
The economy can grow even by 50%, but az long az there iz no pozitive and real trickle down effect on the citizenz, the figurez will just be for fun.
This is jus for the gullible like the few above.Whoeve is preaching about economic growth pa zed must be a jobseeker. The obvious indicators show otherwise! Are will still in correction mode? How long? The kwacha is stil hitting high against the dollar and the worst is still unfolding with the bad relations being sawn by one RB against the donors. As one @7has put-no matter how the figures indicate, the whole issue lies on the ground. Its like in china. China has taken govt’s mind,body & soul towards growth of economy. Foreign ploicy is working out for them and they are outrightly become the manufacturer of the world & we are donatting all the raw materials for their devepment. If zambia was on the right track in investment, we would see closed companies regain life.
We shall see!
6.6% to common Zambia translates to 6.6% growth of HERB belly, 6.6 more travelling all over, 6.6 more for Thandiwe to dish out in campaigns 6.6% for William Banda to organize violent cadres, 6.6% of victimizing MMD members planning to challenge HERB at the convention. What we see on the ground is 1500 plus jobs lost at Zamtel, patients sleeping in corridors at UTH. Dilapidated infra structure ( I was at Nkoloma). High cost of living. The only people that seem to enjoy the growth are the names I have mentioned.
“30% of 1,669 Zamtel retrenchees to get K10m each”. This is what is always missing on the LT
For those whose vision and planning horizon cannot extend beyond 90 days this master piece analysis and presentation by S.T. Likolo Ndalamei would be pure jargon. For those who understand economics and care for this country, this is brilliant news indeed for the people of this country. I particularly like the recognition that reliance on donor aid is not predicable. For that reason, I have no problem contracting that magnitude of debt as long as it goes into infrastructure development. S.T. has given that assurance as in “…. Government has implored ministries, provinces and other spending agencies to measure every Kwacha against the guiding principle of “value for money” in both budget preparation and execution…”. Bulela mwana amulozi!
This is a warning to Alias Mpondela to show maturity in managing company finance because history has it that he missmananged Duly Motors when he was the general manager. Duly Motors is no longer what used be because of Mpondela’s financial mismanagement. It is very worrysome to read about financial instability at NHA. My question has been whether NHA is going to be like Duly’s in the end.
# 10 & 11 KCI hahahaha!..Nice one.
# 12 Sober… There’s nothing wildly exciting about this . Indeed, it is pure jargon in that he’s talking about the same things they always rehash over and over again. Just a different presentation . Even people who don’t understand economics know that these figures can be arrived at in many different ways. The Zambian people are poor. They don’t need debt burden for infrastructure. It won’t feed them!
I have waisted too much many hours on our beloved country, reading all these useless news. I am do with this and I am done with Zambia! I will continue sending money to my folks and thats it!! I
If this is a true reflection to what is on the ground, then its Good News.
Again, if Zambia will be exporting Maize due to the Bumper Harvest and other Agriculture products – that too is a good sign moving forward.
It’s my hope that Tourism will also keep climbing up. So far the mining sector appears to be doing fine!
The economy in Zambia grows along Independence Road and at BOZ only. That is really economical growth. The growth has failed to take a detour to nearby UTH. Why?