AMERICAN credit rating agency, Fitch, in September 2020 downgraded Zambia’s credit rating to near junk.
Thanks to the United Party for National Development (UPND) for securing victory in the polls the following year, the country could not degenerate to ‘economic junk.’
Soon after emerging victorious, the UPND administration went to work and embarked on robust activities to restore macro-economic stability.
In the last two years, the country has recorded a steady economic growth, currently at 3.1 per cent from the negative growth rate under the Patriotic Front (PF).
In its journey of ‘rebuilding and reuniting the nation’, the UPND Government, under President Hakainde Hichilema who was declared winner exactly two years ago today, coined itself as the ‘New Dawn administration.’
Mr Hichilema assured that as the new dawn his administration will rebuild the ravaged national economy which was overburdened by public debt and dismal performance.
To rebuild the economy, the Government pledged to improve economic sectors like agriculture, mining, tourism as well as reduce the interest rates to allow more Zambians to borrow from financial institutions and improve their businesses.
Some of the major economic scores in the past two years include achieving the long-awaited International Monetary Fund (IMF) US$1.3 billion Extended Credit Facility (ECF) to be accessed in six tranches leading to debt restructuring.
So far, more than $6 billion of the country’s external debt, US$4.1 billion owed to Chinese creditors, is expected to create fiscal breathing space.
In the same vein ,the Zambian Kwacha which traded at K22.6 per dollar in July 2021 has seen stability and is currently trading around K19, a remarkable improvement, as described by financial experts.
At the time the UPND was being ushered into office, inflation was at an all-time high of 24.6 per cent in June 2021 but reduced to 24.4 per cent at the month-end of August, 2021.
It dropped further from 22.1 per cent to 10.1 per cent in 2022, driven mainly by reduced food price shocks then.
Inflation currently stands at 10.3 per cent for July as announced by the Zambia Statistics Agency (ZAMSTAT) last month.
The recent Zambia’s economic review by the African Development Bank (AfDB) shows that the country’s Gross Domestic Product (GDP) recovered to 4.6 per cent growth in 2021 and more than three per cent in 2022 after contracting to 2.8 per cent under the PF watch in 2020.
Zambia’s economic performance in the last two years has elated many officials from international lenders including new World Bank country manager to Zambia, Achim Fock.
“I am excited to start my tenure in Zambia. I look forward to working with the Zambian Government to support its efforts in achieving its developmental aspirations,” Dr Fock, a German national stated in a statement recently.
The World Bank’s pledge to support Zambia’s economic performance is evidenced from the developmental projects that the bank has financed in the last two years.
In 2022, the World Bank disbursed US$73.75 million for the Zambia Growth Opportunities Programme (ZAMGRO), whose main objective is to promote agricultural diversification, sustainability and jobs in the agri- food sector.
In the agriculture sector, the Government assures that it will continue providing farmers with farming inputs through the transformation of the Farmer Input Support Programme (FISP) into Comprehensive Agriculture Support Programme (CASP).
Under this programme, the Ministry of Agriculture has devised a plan to upgrade FISP into CASP, so that apart from inputs, farmers can receive other services such as machinery and finance.
In the mining sector, the changes in the mining tax regime seems to be attracting more international goodwill as seen by First Quantum Minerals (FQM) investing US$1.35 billion in mining expansion which will have a multiplier effect on the economy.
The impending conclusion of negotiations to revive operations for the two mining giants, Mopani Copper Mines (MCM) and Konkola Copper Mines (KCM) will be a major boost to the economy.
The two will play an important role in meeting the Government’s projected three million tonnes on 10 years.
Until then, it remains the biggest single challenge on the New Dawn administration’s economic plate in the next three years alongside the finding of a proper way of exploiting the ‘newly discovered’ mineral, Sugilite.
In the energy sector, the completion of the commissioning of the remaining units at the 750MW Kafue Gorge Lower using locally-raised funds has enabled the country to have sufficient electricity to power production leading to economic stability.
Similarly, the signed partnership agreements for renewable energy worth over $7 billion is completely changing the energy outlook while raisingZambia’s profile as a net energy exporter as more facilities come online.
The successful conversion of the 1,710 kilometre Tazama Pipeline from transporting co-mingled feedstock to refined low sulphur diesel is also a milestone under the UPND.
Under tourism, the Government remains committed to driving its agenda of enhancing investments in the sector.
It is focused on fostering the much-desired economic growth by ensuring that Zambia’s visibility to the world is constant, and targets to ensure the country records 1.5 million arrivals this year.
This also saw the scrapping off of visas for potential tourist source countries like the United Kingdom (UK) among others.
To boost tourism in the northern circuit, the Government allocated around US$100 million for the development of the Kasaba Bay, a tourism resort in Northern Province with the Kasama Airport runway upgrade just completed.
Regarding manufacturing, the Government reduced the entry requirement to Multi-facility Economic Zones (MFEZs) and industrial parks to US$50,000 from US$100,000 which is expected to attract more medium to large-scale manufacturing industries.
Small and Medium Enterprises (SMEs) being the backbone of the country’s economy, the Government further created a ministry for it to ensure heightened support.
The Government recognises the major role SMEs play in the growth of the economy, as they account for the majority of businesses and are important contributors to job creation.
Two years down the lane, the UPND has scored various achievements in the growth of the economy.
It has embarked on various economic empowerment programmes through the Citizens Economic Empowerment Commission (CEEC) and the Constituency Development Funds (CDF).