16 January 2013

Zambia: 2013 Economic Outlook Bright

ZAMBIA's economy is now attracting the attention of people from all over the world as a result of the favourable political and socio economic environment which enabled the country to record positive and significant growth in 2012.

The economy of the country has shown significant growth in the last few months and has become stable.

Further, Zambia as the largest copper producer in Africa may raise output this year to the highest level in at least a decade as prices have more than doubled in the past three years.

Zambia's economic outlook for 2013 also indicates that the economic condition of the country will become more stable, yet inflation will continue to be affected by the rising high cost of living.

Policy makers have given a significant boost to the economic state of the country. They have brought development in the country's fiscal position in exchange of the risks related to macro stability.

For example, Finance Minister Alexander Chikwanda outlined in the 2013 national Budget Government's targets to grow the economy by more than 7.0 per cent bearing in mind the current growth rate.

According to financial experts, the economic condition of the country is stable and the Gross Domestic Product (GDP) has also improved in the last few quarters.

However, the present inflation rate has overshadowed the growth of the economy and this is the reason why some believe that Zambia's economic condition is perhaps still unstable.

As per the Central Statistical Office (CSO) report, Zambia's inflation rate for December 2012 went up by 0.4 percentage points to 7.3 per cent. It was around 6.9 per cent previously.

Maintaining a stable inflation rate has become a major cause of concern to the common man in the country. It has also raised the eyebrows of investors, too.

But the Government in the national Budget has set its year end inflation target at over 6 per cent if all things remain equal.

In addition, the Government has implemented different measures for bringing stability in the inflationary condition of the country. It has also designed programmes and strategies for boosting the overall economy of the country.

Apart from that, the Government introduced the rebased Kwacha which has simplified the accounting process.

Government's plan this year is to implement the Rural Industrialisation Strategy that will see the creation of industrial clusters and Multi facility Economic Zones (MFEZ) in all the provinces aimed at boosting industrial activities and generating employment opportunities.

The Zambian unemployment rate has also remained a cause of concern among the people. The current figures of unemployment stand at 14 per cent which is still high.

More employment opportunities are required for balancing the condition and Mr Chikwanda pointed out that in response to the high rate of unemployment, low incomes and consequent high poverty levels, it was the intention of the Government, within its first term of office, to significantly transform Zambia's economy, by focusing on sectors with high employment creation potential.

As such the Government would in 2013 create at least 200,000 decent jobs as outlined in the National Strategy for Industrialisation and Job Creation, which prioritises four major areas namely: agriculture; tourism; manufacturing and infrastructure development.

Several industries have been developed in the country in the past few years and others are still underway. With more economic plans introduced in the recent years, the overall economy of the country has received a boost.

The Zambian GDP growth at present is 7.6 per cent which is also quite appreciating. Even though the GDP has made a significant growth in the past months, the country needs to maintain a strict growth to emerge as a middle income country.

Commenting on the Kwacha, Financial expert Maambo Haamaundu said 2013 was going to be a challenging year saying that the Kwacha stability needs to be supported by production otherwise the local unit would continue being under pressure owing to demand of the dollar outstripping supply.

Mr Haamaundu said: "I expect in 2013 the Kwacha will be supported by consistency in policy pronouncements by key Government officials."

On the other hand, the Bankers Association of Zambia (BAZ) pointed out that the Zambian financial landscape remained

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