Zambia’s 2016 economic growth projected at 3%

Finance Minister Felix Mutati

Finance Minister Felix Mutati says the country’s economic growth for 2016 is currently projected just above 3%.

Mr Mutati has told Parliament in a ministerial statement on the state of the economy and economic recovery programme to be supported by the IMF that this is far below the 7% levels required to reduce poverty and to drive the country’s development.

He has attributed the slower economic growth in 2016 to external and domestic challenges, with the domestic challenges being the power crisis and high inflation that have increased the cost of production for the private sector, policy reversals that have adversely impacted business planning particularly in the mining sector, and the impact of growing expenditure that have exerted pressure on monetary policy whose ability has been reduced.

Mr Mutati notes that these factors have had a negative effect on the confidence of foreign and domestic investors and the players in the financial markets.

And Mr Mutati says the economic recovery programme has been dubbed “   Zambia Plus”, meaning that all solutions will be determined by Zambians while external partners including the IMF will form the plus as they are engaged to assist.

Mr Mutati says the economic recovery plan has five pillars which entail strengthening tax policy and administration, to improve revenue inflows, increase budgetary allocation to social protection to better protect the poor in view of the removal of subsidies, improve economic and fiscal governance, improve budget credibility and provide greater economic stability.

He says government has not hosted any detailed programme discussions with the IMF and that there are no IMF preconditions.

Mr Mutati adds that before any programme details are agreed upon, Cabinet and other economic stakeholders will be consulted and that any final agreement, if appropriate, would be expected in the first quarter of 2017.