The Zambian government has recently announced that the country will experience an economic growth of 3.7% in 2016 up from 3.5% in 2015 despite challenges faced in the latter period that are expected to last for another year.
The announce was done by Zambia’s Minister of Finance Alexander Chikwanda, whom in a recent meeting with lawmakers explained that the country’s expected growth for 2016 is below expectations of 7.0% initially budgeted last year, due to lasting adverse weather conditions, electricity deficit and low copper prices.
The government is budgeting the current defiant economic situation at global scale and is currently taking measures to make the domestic economy less-dependent from both external and internal shocks, Minister Chikwanda added.
Diversification in the agriculture sector to make it less-focused on maize production by introducing the e-voucher is already helping small-scale farmers to boost their benefits and increase their variety of crops, while in the mining sector a price-based tax regime will be implemented next month to ensure sustainable activity and secure jobs in the copper and other mineral industries, Minister Chikwanda stressed.
The Zambian Parliament recently launched the Farmer Input Support Program (FSIP) 2015/2016 for a total investment of ZMW 2.1 billion, which aims at improving small-scale farmers’ access to improved resources and to enhance the participation of the private sector in supply and distribution of agro inputs.
Regarding the mining sector, Zambia’s new tax regime has been already approved by the President’s cabinet and mine royalties will be applied at 4%, 5% and 6% depending on a copper international price below USD 4,500 per tonne, between USD 4,500 and USD 6,000 per tonne, and above USD 6,000 per tonne respectively.
According to Minister Chikwanda, the government will boost investment in the transport and energy sector throughout 2016 seeking to boost GDP growth further.
If later in 2016 there are better weather conditions, stable copper price and increased electricity supply, the GDP growth could reach 5% according to Minister Chikwanda.
African Development Bank (AfDB) President, Dr. Akinwumi Adesina, has recently congratulated the Zambian government for its efforts on diversifying the economy, concluding with a perspective of a solid Zambian economy.
Zambia’s economy had been growing at rates of at least 6% per annum in the last 8 years with a minimum of 6% in 2008 and a maximum of 7.6% in 2010.
It is expected to close 2015 at a growth rate of 3.5% to surpass a GDP of USD 28 billion up from USD 27.07 billion in 2014 and USD 20.27 billion in 2010, year in which it achieved its fastest growing rate.
