A visiting International Monetary Fund (IMF) mission to Zambia led by mission chief Trevor Alleyne has predicted that Zambia’s macroeconomic performance is expected to remain robust this year, with Real GDP growth projected at 7.7 percent.
Speaking at the conclusion of the visit in Lusaka today,Mr Alleyne says the Real GDP growth reflects the strong growth in copper production and non-maize agriculture, and an expansionary fiscal policy.
QFM NEWS reports that Mr Alleyne also noted that Inflation declined to 7.2 percent at end-2011, broadly in line with the authorities’ target, and is projected to end this year close to its February 2012 level of 6.0 percent.
He further states that despite copper prices rising to record highs, the external current account surplus narrowed substantially last year, mainly reflecting a strong expansion in imports and a decline in grants.
He said for 2012, the current account surplus is projected to remain broadly unchanged, while gross international reserves are expected to continue to grow, reaching the equivalent of 3.3 months of prospective imports.
Mr Alleyne says although the crisis in Europe has had little spillover to the Zambian economy to date, a further deterioration in global economic conditions could squeeze trade credit lines; reduce demand for Zambian exports; and lower copper prices.
He said on the the domestic front, policy measures will be needed to ensure that fiscal targets are met; and careful implementation of the planned financial sector reforms will be necessary to safeguard financial sector stability.
He also noted that on the other hand, Zambia’s solid macroeconomic management, the large investments in the copper sector, and recent strong growth in non-maize agriculture all auger well for the country’s ability to withstand global shocks and sustain the growth momentum into the future.
Mr Alleyne stated that maintaining a positive investment climate for current and potential investors should be an important component of Zambia’s growth strategy.
He pointed out that as traditional concessional financing phases out and Zambia relies increasingly on international markets and foreign direct investment, it will be important for the government to implement and communicate clearly a consistent set of policies related to foreign investment.
He explains that this will enhance Zambia’s international reputation as a destination for investment flows by reducing uncertainty.
Mr Alleyne further stated that despite the favorable macroeconomic results, there is an urgent need to re-orient policies to ensure that economic growth and macroeconomic stability are accompanied by strong employment growth and poverty reduction.
He adds that looking forward, it will be important for the Government to implement policies to diversify the economy and ensure that growth is more inclusive.
He says key areas will include tax policy, tax administration, and public financial management to create fiscal space for increased infrastructure spending and improve technical capacity to efficiently administer a larger capital budget among others.
The International Monetary Fund (IMF) mission has been in Zambia from February 29- March 13, 2012.
[QFM]
Thats if MMD was still in power, growth will stall this year…….
Can someone please tell me or confirm if this was an IMF Article IV…??
“He says key areas will include tax policy, tax administration, and public financial management to create fiscal space for increased infrastructure spending and improve technical capacity to efficiently administer a larger capital budget among others”.
In short Mr. Alleyne was saying that our tax system sucks because there is no reason we should be the continent’s largest producer of copper and yet our tax revenues from that are roughly 1% of our GDP. Most often our politicians have confused royalties with income tax let alone windfall taxes.
These are totally different aspects of revenue recovery. If what we get out of our main export obtained in developed countries, heads would roll but not so with our smart people of the Zambian Enterprise, IMF is saying fix the system!!!
I am sure the PF who has been in power for only 5 months will not take credit of these figures. We will wait for the PF figures after the next budget. I will wait for more comments tomorrow after eight since most blogers use their office Internet connections
It is important that government does not interfere in the operations of private enterprises and only sets up policies, especially those concerning tax, that will allow the average citizen to benefit and also ensure that the environment and rights of workers are respected and protected.
Productivity is declining, with all these strikes and civil servants who are still negotiating for better conditions, investors who are stalling, the weakening Kwacha, The IMF says GDP will be 7.7%. Pa Zed twali wina
Ba IMF, is the diplomacy or Economics? I don’t see where this growth will come from unless you said it will decline by 7.7%
support the govt ppl, the decline in the economy affects the whole nation, its not who u support or hate, its about having a civilized health mentality en a better hope for Zambia, praise en encourage ur enermy if they do well en criticise then to death if they r slow en careless “ONE ZAMBIA, ONE NATION” if u know what i mean.
KB. We would like to support the Government of the day but that support can only come if they are doing the right things. For example, when was the last time you ever heard our president talking about Economic issues and giving strategic economic policy direction? The answer is never. All the statistics on the ground are showing that the Economy is declining. The currency is on free fall. Investor confidence is at the lowest. So where will the growth come from?
If we all fold our arms and wait to be fed like broiler chickens there will be no growth.What have we all done personally in the last 5 months to enhance our lives or change our fortunes?
#8 Its not only the president that has to do something but the entire cabinet. With the English economy in dire I have not heard David cameron utter economic strategies in public for the last 12 months but I am sure his cabinet are working on it. Lets support our govt postively for the next five years as sitting down sucking your finger waiting for your govt to falter is irresponsible. Please advise the the govt where they are making mistakes
Further proof that the government has instilled strong economic management in place, keep up the good PF!!Â
Positive message. To engage on the ground requires all to contribute in whatever way they can. I’m sure all Zambians want things to get better but it is an uphill struggle. Past and present mistakes are correctable where there is the will. Have listened to a lot of positive discussions from travelling Zambians. Would be helpful if forums such as this expanded their remit to beyond current blog creations. There is more going on than one can pick up here but I do enjoy the range of views although one has to sometime read between the lines or ignore political bias to debates in order to see the other side to my own personal viewpoint :)
with all the bad news we have been getting, this is great news for our future and current economy. we are still on track. now i hope haters of statistics can have some relief and agree that is a fair reflection of the economic outlook.
well well isnt that great.? now all those complain about the GRZ, I have a question for u what have u done to improve urself..? are u still stuck at the same level.? if so then things are bad for u breatheren,however its never too late to change ur atitude en becum a positive thinker, also as youths lets start the work of being creative and support the GRZ coz dont expect the country to get better development wise unless we take up the challenges…its high time we stopped wasting time criticising and supporting the opposition leaders who have ill will.
The IMF language has passed well above many PF cadres. The Govt needs to pay attention to what the IMF is saying. There are a lot of cardinal issues raised there, diplomatically. E.g investor confidence, which Fitch touched on, taxation, the fact that Zambia will now have to raise money on capital markets and no longer milk on concession loans, etc etc. All these demand disciplined economic management.
In other words, the IMF is saying hey guys, you have been weaned of breast milk. You’ve got to swim or sink in the competitive market for investment, capital etc.
Does PF govt have the calibre to steer the boat in such waters unchatted for them.
This is where it would help to work with Magande, Musokotwane, Mutati and other MMD brain boxes who have proven track record.
Sata should think of setting up Think Tanks to help advise direction. We should move beyond politics and politically motivated witch hunts and COI. Zambia is now required to stand on its two fit by the IMF and international community. We must generate enough tax revenue, ensure investor confidence both local and foreign, manage our economy shrewdley, avoid waste and leave politics to election campaigns. We need national leaders, statesmen and women. The way KK was in his time. We certainly need Think tanks, bodies that can speak authoritatively and masterfully. At least demonstrate that we have brains.