By KENNEDY MUPESENI –
PRODUCTION in key economic sectors will stabilise in the last half of 2016 because of the consensus on the fiscal and policy isues, Standard Bank Group has projected.
At the start of the year, there was a standoff between Government and the mining sector regarding the 2015 fiscal regime , VAT Rule refunds as well other Statutory Instruments all which have been resolved.
Standard Bank Africa fixed income and currency strategist Yvette Babb said production in the mining sector was expected to stabilise due to consensus between industrial players and the Government on fiscal and policy issues.
“Regardless of the challenges Zambia is facing such as electricity deficits, low copper prices among others, most mining companies are likely to increase copper production due to the consensus reached with the Government especially on policy issues,” Ms Babb said.
She said this at the Stanbic Bank Informative Breakfast Meeting on the status of the economy at Lusaka’s Intercontinental Hotel yesterday.
Ms Babb added that the Government was on track regarding fiscal consolidation it embarked on in 2013 but that it should speed up the process looking at the current budget deficits the country was facing.
“The Government is on track regarding the fiscal consideration looking at the number of measures it has taken, but there is need to speed up the process in view of the risks associated with both external and local debt to avoid deterioration,” she added.
Ms Babb further urged Government to reduce on allowances paid to public workers, and that the last six months of 2015 were not encouraging in terms of implementing fiscal consolidation largely to the presidential elections.
Meanwhile, head of global banking at Stanbic Zambia Victor Chileshe said during the presentation that despite the Kwacha depreciating to about 30 per cent since January this year,it has been gradual and predictable.
“The Kwacha has depreciated against the United States Dollars about 30 per cent since but the situation has not been volatile to force the Bank of Zambia to intervene because it has been gradual, which gives room to plan,” Mr Chileshe said.
He hoped that copper prices on the international market would increase to ease the external pressure on the local currency and result in increase in commodity, exports especially the Non-Traditional Exports (NTEs) sector.