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Zambia’s economy thriving – experts

BENEDICT TEMBO, Abidjan, Ivory Coast
ZAMBIA’S economic performance is expected to remain strong in the medium term driven by large investments in infrastructure and a growing public administration and defence, according to the 2015 African Economic Outlook (AEO) report.
The AEO says the economy remains strong with growth expected to increase above six percent in 2015/16 after a decline in gross domestic product growth from 6.7 percent in 2013 to 5.7 percent due mainly to waning copper production while inflation is expected to fall below 7.0 percent by 2017.
“Governance and democratic processes continue to gather strength, with the recent presidential elections reinforcing Zambia’s status as a peaceful and stable country,” it says.
The document, a unique international collaboration between the African Development Bank (AfDB), the Organisation for Economic Co-operation and Development  (OECD) and the United Nations Development Programme (UNDP), says Zambia’s economy performed relatively well within the region despite the decline in the growth rate.
It says the decline was largely a result of lower production in the mining sector compared to the year before as well as slower growth in manufacturing and public services.
“Agriculture, on the other hand, put in a strong performance growing at over six percent as a result of a bumper maize harvest,” says the report.
The report, released yesterday at the AfDB annual meetings here, says diversifying the economy away from dependence on copper and the creation of decent jobs remain the overarching policy goals of the government.
“Improving accountability and strengthening the fight against corruption also remain firmly on the Government’s agenda. In 2014, there was some fiscal consolidation with the deficit falling by about one percentage point compared to 2013,” the report says.
It says the fiscal consolidation is expected to continue in the medium term with slower expenditure growth and improved fiscal and cash management.
The AEO says productivity in the private sector needs to increase in order to improve competitiveness given the pressure for higher wages.
It has noted Government’s desire to do more to expand skills and education while also accelerating interventions in health, water and sanitation in the coming year.
“Economic development in Zambia has historically followed the rail lines that connect the Copperbelt in the north with Livingstone in the south through the capital city, Lusaka. More recently, the main transport corridors have also provided an impetus for growth in the country,” it says.
The report says these corridors have benefited both Central and Eastern Province, where there has been an influx of investments, creating a basis for further development.
“Spatial inclusion is addressed through the revised Sixth National Development Plan while an added benefit of industrial policy is the creation of multi-facility economic zones aimed at creating opportunities in the main urban agglomerations and attracting foreign investments,” it adds.
The report, however, says that poverty, at over 60 percent, remains significant despite strong economic performance along the main transport corridors and reduced poverty in the large urban agglomerations.
It says the fiscal consolidation is expected to continue in the medium term with slower expenditure growth and improved fiscal and cash management.
The AEO says productivity in the private sector needs to increase in order to improve competitiveness given the pressure for higher wages.
It has noted Government’s desire to do more to expand skills and education while also accelerating interventions in health, water and sanitation in the coming year.
“Economic development in Zambia has historically followed the rail lines that connect the Copperbelt in the north with Livingstone in the south through the capital city, Lusaka. More recently, the main transport corridors have also provided an impetus for growth in the country,” it says.
The report says these corridors have benefited both Central and Eastern Province, where there has been an influx of investments, creating a basis for further development.
“Spatial inclusion is addressed through the revised Sixth National Development Plan while an added benefit of industrial policy is the creation of multi-facility economic zones aimed at creating opportunities in the main urban agglomerations and attracting foreign investments,” it adds.
The report, however, says that poverty, at over 60 percent, remains significant despite strong economic performance along the main transport corridors and reduced poverty in the large urban agglomerations.

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