.YAMBA

By DELPHINE ZULU –

DIVERSIFICATION remains the more sustainable way of insulating the economy against adverse external and domestic shocks, Secretary to the Treasury Fredson Yamba has said.
Mr Yamba said the country’s economic outlook remained positive due to continued growth in the mining sector despite external factors such as the falling of copper prices and strengthening of the US dollar leading to volatility in the exchange rate.
Mr Yamba said this at a joint Press briefing in Lusaka yesterday with International Monetary Fund (IMF) mission leader, Tsidi Tsikata.
He said despite the external and domestic factors, there was continued positive Gross Domestic Product (GDP) growth.
“Mining will continue to grow despite the current challenges. We remain confident that despite external and domestic factors alluded to, we see continued positive real GDP in the region of six per cent,” Mr Yamba said.
Another growth expected in 2015 and in the medium term included the manufacturing, construction, communication and transport sectors.
Mr Yamba said Government would guarantee that fiscal and monetary policies were in tandem to enshrine macroeconomic stability.
Some of the fiscal consolidation measures being taken to stabilise the economy include re-alignment of Government expenditure to priority areas and improved implementation of developmental projects,
streamlining expenditure items such as Farmer Input Support Programme and diversification.
Others measures are limiting purchases under the Food Reserve Agency (FRA) to strategic reserves, enhance revenue collections, improve Government cash management, adherence to cost reflective prices in the energy sector, prioritise capital spending and limit Government borrowing.
Mr Yamba added that Government was also engaged in dialogue with affected stakeholders in the mining sector to ensure continued operations in order to facilitate economic growth and provision of resources for use to invest in the Zambian people.
Mr Tsikata welcomed President Edgar Lungu’s directive for a review of the mining tax regime which had a negative impact on the sector.
“We hope the resolution of the impasse will result in a transparent system applicable to all mines rather than mine-by- mine agreements that will
likely entail the Government foregoing subtantial revenues to keep individual mines in operation,” he said.
Mr Tsikata said the Zambian economy was experiencing strong headwinds due to policy uncertainties at home while external shocks were dampening economic activity in particular the mining sector which accounts for three quarters of the country’s export earnings.
He said while the pressure on the economy had grown, the challenges were not insurmountable and resolute actions to contain the budget deficit, resolve mining tax disputes, and foster policy coherence and stability would help towards boosting investors’ confidence and unlocking the country’s high growth potential.