Zambian economy headed for boom
Published On November 2, 2022 » 3005 Views» By Times Reporter » Business, Columns
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IT is indisputable that the economic environment in the country has been improving with each month that passes.
If the levels in terms of economic fundamentals are anything to go by Zambia’s economy is headed for boom.
Due to resilience and clarity of thought of the new government administration, the economy has recorded a 180-degree spin in that if it was heading north it is now heading south, or if it was heading
west it is now heading east and vice versa.
In mathematical terms, from moving to the left of the Y-axis on the number-line it has already crossed the Y-axis back on the right side, on the X-axis!
Like I have indicated in this forum before, all the economic fundamentals in the last one year look buoyant and, therefore, exciting.
Take, for instance, inflation which according to Zambia Statistics Agency (ZAMSTATS) was about 24.4 per cent in August 2021, when the new leadership took over the government, and is now in single digit.
If one was to trace the inflation rate’s journey on its downward trends to the single-digit level since the United Party for National Development (UPND) came into power, one would see that in September
2021, it dropped to 22.6 per cent from 24.4 per cent and so on.
Therefore, since the ushering in of UPND into power the inflation has dropped from24.4 per cent to below 10 per cent.
Another important fundamental which has performed in an awe-inspiring manner is the local currency, the Kwacha.
This is one of economic benchmarks which positively responded to the declaration Mr Hakainde Hichilema as Zambia’s president-elect on August 16, 2021.
The dear Kwacha appreciated the most since 2015 while the Eurobonds due in 2024 jumped by almost 10 per cent to 73.56 cents on the dollar in London, the biggest gain then since April 2020 according to Bloomberg.
The Kwacha which has since been on its upward movement trend is currently hovering around K16 per dollar and with only a few currencies to beat for the world’s best performing legal tender slot.
Another economic area which has scored awesome results is on the confidence of the international community and investors.
The international community and investors’ confidence for Zambia is at all-time high leading to the country’s attainment of the long-awaited International Monetary Fund (IMF) financial support.
Just this week and to affirm that high confidence the international community has in the country, the Zambia Development Agency (ZDA) says Zambia registered US$1.1 billion worth of investment and more than 8,000 jobs in the third quarter of this year.
According to the agency that was due to improved macroeconomic economic fundamentals.
That means that the country has become a preferred investment destination for the foreign investors.
The $1.1 billion investment posted is as compared to $631 million recorded in the same period in 2021, which translates into about 73 per cent rise.
Among the key sectors were manufacturing, which accounted for the highest figure of $396 million, energy, tourism, mining transport, construction, services, agriculture and health.
ZDA acting director general Albert Halwampa says this during a Press briefing in Lusaka on Monday.
The 8,307 jobs were recorded from 95 investment ventures.
“All this is happening due to the stable macroeconomic fundamentals. And as ZDA we are at a stage where investor confidence is at its highest level. We are now having an inflow of investors coming into this country because everybody sees that the foundation in Zambia is strong,” Mr Halwampa says.
During the period under review the ZDA monitored 27 projects recording real investment of $3.89 billion and creating 6,071 jobs.
“The total export earnings increased to $2.83 billion compared to $2.82 billion in the same period representing 0.35 per cent. Non Traditional Exports increased by 24.7 per cent to $907.17 million in the third quarter of 2022 from $729.19 million during the same period in 2021,”Mr Halwampa says.
According to the ZDA, the Democratic Republic of Congo (DRC) has continued accounting for the largest export share of $24.48 million, while $3.5 million was recorded from Mozambique.
Mr Halwampa says 1,279 businesses accessed Business Development Support (BDS) services including access to markets, finance technology and training.
This created 2,752 jobs compared to the 2021 period in which it supported 785 businesses and created 1,236 jobs.
One hopes that the $50,000 threshold for local investors will begin to take root in the fourth quarter of this year following the government’s decision to reduce the threshold of investing for local investors from $500 000 to $50,000.
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