By CHILA
NAMAIKO –
WORLD Bank country senior economist Gregory Smith says the appreciation of the Kwacha is a positive sign that will instill confidence in the Zambian economy.
The Kwacha has continued to appreciate against the United States (US) dollar, hitting K9.7767 at the weekend, and extending its bullish run for six successive days.
The local currency continued to show resilience with many financial experts in the country predicting a bullish trend over the next one week.
The rebounding of the Kwacha also came at the time when most opposition party leaders had accused the Government of poor management and claimed they had “magic” solutions to reverse the depreciation of the currency.
Dr Smith told journalists in Lusaka yesterday that the current appreciation of the Kwacha was a positive sign for the country.
“It’s a positive sign to see the appreciation of the Kwacha. It gives more confidence in the economy, but again we have to be careful and look at what is causing the rapid appreciation,” he said.
He was speaking shortly before a telecast media briefing by the Bank’s acting chief economist of the Africa Region Punam Chuhan-Pole from Washington DC on Africa’s Pulse, which is an analysis of issues shaping Africa’s economic future.
He said the appreciation of the local currency gave a bright economic outlook of the country, but called for more enforcement of austerity measures.
Dr Smith also said there was nothing sinister about Government’s borrowing so long as the resources were invested in productive programmes to uplift the welfare of citizens.
“If the Government is borrowing to invest, there is nothing wrong, but the caution is to borrow and use the resources for productive investments,” he said.
He said although investing in infrastructure projects had no direct returns, such investments were, however, critical in wooing investors into the country.
Meanwhile, Ms Pole has urged African governments to take steps in adjusting to a new, lower level of commodity prices.
“To ensure growth and social development, cities need to become less costly for firms and more appealing to investors. They must also become kinder to residents, offering services, amenities.
“All of this will require reforming urban land markets and urban regulations and coordinating early infrastructure investments,” she said.
She said that Africa’s growing urban centres offer a springboard for diversification and that there was need for better institutions for effective planning and coordination.
This, she said, could raise urban economic density and productivity, and spur the region’s transformation.