Zambian economy facing headwinds- Dr Ng’andu
By Staff Reporter
Minister of Finance Dr. Bwalya Ng’andu says Zambia’s economy is facing headwinds.
Speaking in Livingstone at the economic summit hosted by Economics Association of Zambia on Thursday, Dr Ng’andu said there is need to take appropriate measures to deal, adapt, mitigate and reduce the risks associated with climate change.
Dr. Ng’andu has noted that the economic growth has been sluggish, mainly at the back of adverse weather conditions that have had a dampening effect on the agriculture and energy sectors.
He said these factors resulted in real GDP growth projected at around 2.5 per cent in 2019, down from an initial projection of almost four per cent.
“The many challenges affecting the economy have culminated into negative market sentiments that in the second quarter of the year impacted negatively on the exchange rate of the kwacha against major convertible currencies,” he said.
The summit, which closed this afternoon was under the theme: The future of economic diplomacy: supporting inclusive growth and sustainable development in Africa
“We meet at a time when the economy is facing some headwinds. Growth has been sluggish, mainly at the back of adverse weather conditions,” Dr Ng’andu said.
“Liquidity conditions have been tight, adversely affecting businesses around the country and constraining economic activity. We have also encountered declining fiscal space for developmental projects as most of the resources have been utilized on debt service and other obligations that have a first call on the treasury. Developments in the international economy have also not been supportive. Global growth remains sluggish while risks to the global economy are on the upside, adversely affecting commodity prices including copper prices. These factors have culminated in negative market sentiments that in the second quarter of the year impacted negatively on the exchange rate of the kwacha against major convertible currencies.”
He stressed that strategic decisions and choices were needed to reinvigorate growth following the economic challenges.
“It is therefore gratifying that the summit is being held at this time when we need to make strategic decisions and choices on the following challenges facing the economy: 1) The need to reinvigorate growth; 2) Dealing with debt vulnerabilities and ensuring debt sustainability; 3) Building back fiscal buffers over the medium term; 4) Improving liquidity so as to support SMEs and the private sector in general through dismantling of arrears; and 5) Ensuring support to the social sectors and the vulnerable in our society,” Dr Ng’andu said.
He has, however, said government has announced a number of measures aimed at slowing down the pace of debt accumulation, such as postponement and cancellation of debt.
Dr. Ng’andu said that concrete actions need to be taken so that the perception that “we are a country that produces world class policies, but lack significantly in implementation” can be dispelled.