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Economy

GDP to slow down- Musokotwane

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Finance Minister Situmbeko Musokotwane says Zambia’s Gross Domestic Product (GDP) will slow down next year compared to earlier estimates because of the global economic crisis.

Dr. Musokotwane said this is on account of the unexpected slow down in the mining and toursim sectors following the global crunch.

He said this when he issued a ministerial statement in Parliament Friday on the impact of the Global financial crisis on the Zambian economy.

The minister has also warned that low copper prices pause a significant threat to economic growth achieved over the last five years.

The minister however said Government has already initiated dialogue with mining companies to assess how best the impact of the crisis can be mitigated.

He said if the low copper prices continue future investments in copper mining may decline.

Dr. Musokotwane however said the mining sector is still expected to grow next year because production in new mines will start.

Meawhile Dr. Musokotwane said there is a possibility that the financial crisis may affect the 2009 national budget.

editor
editorhttp://www.lusakatimes.com

117 COMMENTS

  9. #8 Is that so? But it sure does feel like Zambia is the worst hit!! Well, at least RB kept to his promise of reducin the price of fuel!! I was almost beginin to consider walkin to and from work! #:-s

  11. #10

    Or better still……..I might as well invest in a bicycle! Imagine I have to drive over 25km to and from work everyday!!! I think we need another fuel price reduction…. /:)

  12. I don’t doubt the finance minister’s ability to understand the implications of the global economic slowdown. What I doubt, however, is our government’s ability to get us out of this situation. For many years our economy has been on auto-pilot. The little progress that we seemed to have made was a result of our donors’ willingness to forgive most of our debt and the unforeseen rise in commodity prices. Our government naively confused this with prudent economic planning. Under current market conditions, all our perceived gains have been comletely wiped out and we are back to the dark days of 1999-2001.

  15. # 12
    May we are entering another HEPC phase 2. Because we have seen nothing coming out of debt ‘forginness’. Where has the money gone???

  23. #21 TONGUE

    Exactly nine weeks ago, Magande was quoted as having said that Zambia’s economy would not be significantly affected by the global economic downturn. I’d think twice before consulting him!

  24. I hope there won’t be riots as a result of the job losses. Any lumpen behavior could turn what is already a bad situation into a nightmare. Government needs to act quickly to calm down tempers, and at the same time they need to keep investor confidence that what remains of their investiment will not just be appropriated or destroyed by some overzealous kaponyas.

  26. If the basis of this Govt getting elected by the rural people was continuity then why did they drop Magande, because he was the one who was supposed to be answereable for his assurances to the Zambian people if the Govt had failed like what we are seeing today. It seems dialogue is the answer to everything for this Govt. Very soon will start hearing that they are dialoging with the Global economic crisis itself when other countries are strategically planning and acting.

  27. CONAKRY, Guinea – A group calling itself the National Council for Democracy has announced that Guinea’s government has been dissolved.

    In what appears to be a coup d’etat, a spokesman appeared on TV Tuesday wearing a military uniform and read the statement saying the government, including the constitution, courts and the parliament had been dissolved. He did not state his name or his rank.

    The announcement comes just six hours after officials declared the death of Guinea’s dictator, Lansana Conte. The constitution calls for the president of the National Assembly to be sworn in as the country’s next president.

  30. Hello bloggers. #16 Pinkly missed u too luvvy dubby:x
    Back 2 ze story…that’s an already known fact, Mr. Musokotwayne, but what we want to hear are the measures our gov’t is taking against it.

  32. #8 Sony Ericsson Phiri
    The dollar has not gone up all over the world, No at all.
    I can tell you that last year the Yen was trading at 119Y to 1 dollar. Today it is trading at 89Y.
    And I agree with #23. Rogue Trader those who wanted Magande to go for the third term because they taught he was the only driver were making a big mistake. Look at his projection: “Zambia will not be significantly affected by the global financial crisis”.
    Many dont know why magande was droped, are we aware that there were private issues between Magande and his collegues at The Post Newspaper? Certain actions are negative to the economy and canot be allowed for private gains.

  33. Its not true that the dollar has gone up all over the world, infact the dollar has lost value! For instance, the euro two months ago was 1.2times the the US dollar, but is now 1.4times.

  38. Ba Doctor.
    Some of these distinguished scholars like Dr Musokotwane are but just good at being book worms. The same chap was sometime back telling us that the economy of zambia won’t be affected by the global economic crunch. With due respect the guy could be a doctor after pounding right through the night and getting that doctorate. To me this is just another book worm who pounded himself to the doctorate at the expense of other things in life. How can a doctor miss the point that the recession was going to affect us. Kebby Musokotwane must have spent a fortune educating this “illeterate doctor” or is it the zanbian govt which spent a fortune. We are taking care of him still.

  39. I will tell you this that Zambians like giving excuses for their failures. No doubt at the moment, the global economic downturn is affecting us. But ask the finance minister where this crisis begins and ends in the Zambian scenario, he wouldn’t tell. You cant tell your starving children in the house that this hunger in this house is common even the neighbors are experiencing it too, no. You have to find solutions. Its common sense, everyone knows we are being affected by the GEC but what steps are being taken to remedy the situation is what we want to hear.

  42. If I was president of this country, one of the things I will do is to make sure that all ministerial positions have lucrative salaries yes, but make sure that Ministers earn their money. So that people think twice before becoming Ministers. For example if a Minister’s salary is peged at ZMK 45M per month and a civil servant gets ZMK 1M per month. I will make sure a minister’s job description has 45 times the number of responsibilities a civil servant has. Vote for me guys in 2011. VIVA The alpha male VIVA

  43. #39. The alpha male
    I totally agree with you.
    That is why they are called leaders, they must find solutions.
    Who advised them that when you become a leader you will face no problems.
    In fact it is for problems that we need leaders; if we did not have problems we would not need them.
    There is no need for them to rest in the blame on the global crisis or what they have found left by former leaders, though they need to acknowledge these problems in order to effectively deal with them.
    In the same way, Zambian need to be creative and active. while calling on government to do their part is good it is not enough. Dont die when there is something you can do, do what you can.

  44. 39 Alpha Male
    This is what i mean by our doctor being, “illeterate”. How do we expect a guy who does not know the extent of the Global Economic Recession in terms of how we have been hit, what we need to do and how we can end the down turn in zambia. Being blank about the outlined indices leaves the minister guessing and dreaming. We are in with a dull and redundant govt. RB was so myopic in his rush to increase the salaries of his govt and now we need to be vigilant and see where they get the money for their salaries. We need to cut costs starting at state house and fanning down to District Commissioners also.

  45. Hi folks!
    Am starting my Xmas and New Year holidays now!
    Merry Christmas & Happy New Year folks!
    Cheers! Mosi! Cheers! Chibuku! Cheers!

  46. My Cabinet will look like this

    Fine-Minister of Finance (Yangu!!)
    Sony Ericson Phiri-Minister of Culture and Tradition(iye!!),
    Kambongolo-Minister of Commerce deputized by Rogue Trader (please!!)
    Spectator-Special Advisor to the President( wafwa walemana)
    Nine Chale – Minister without portfolio
    Rashid Jones – Minister of Romantic Affairs. This will be my full cabinet. The rest of the positions are not neccessary.

  47. The general attitude of Zambian needs to change.
    There is no way we can have people who willingly choose not to work or choose jobs they want to do when they have none.
    I will tell you something; early this year someone was visiting back home from South Africa. He past through Botswana and found a man washing cars in Botswana. He took his car thereand stated chating with the man. He noticed that this man talked like a highly learned man with Zimbabwean accent. Further discussions revealed that he was a doctor and had been lecturer at University of Zimbabwe. The man said at his work in Zimbabwe was giving him $100 at the time he left but the carwash was giving him over $1,000 a month.

  50. #44. KWINDI,
    What you desire him to know may not be possible but what is important is for him to be aware of the various possible outcomes. You cannot be axact in predictions of this nature because they are not internal. Many factors are at play which can turn around any particular sector. Even speculations, rumours and feelings can affect the economy in many ways, but these are not issues you will try to predict.
    However, being aware that negative are a high possibility even in areas you are not sure would creat a good sense of contingency planning.

  51. #12 Rogue Trader
    I totally agree with you on “auto-pilot”.
    “Am the boss, I don’t need to do anything”
    Our leaders once elected in office don’t offer any solutions to problems. They tend to just put their hands in their pockets and behave BIG. What important decisions has RB made, about anything, since he took office? And yet the BIG has awarded himself a 10-day luxurious Christmas holiday at the expense of the tax payers!

  54. the issue here shud be brainstorming our way out of this mess not reminding us of the obvious.At the very least the villagers who voted for you and the rest of your gang must be protect from the harshness fo this reality.
    The other thing, most international currencies have actually appreciated against the dollar not the other way round.this is what is suppressing exporting dependant economies eg japan,south korea,china etc

  55. what measures has musokotwane put in place. any way these guys have already worked thats why rb has gone to mfuwe for fresh air.
    zedians find solutions to this mess instead of waiting or donors.
    merry xmas and happy new year to all bloggers and hoping that teta will not announce that he has postponed the two because of GEC, remember the man is well known for all the wrong issues.

  56. #51 Anonymous

    We cannot afford this any longer. We have been taught so many lessons but refuse to understand. Here are a few experiences that we ought to have learnt from;

    – The fall in global copper prices (1970s)
    – The RAMCOZ saga (late 1990s to 2002)
    – The high debt we incurred by borrowing for consumption and balance of payment support as opposed to borrowing for capital expenditure (post HIPC, our debt was about US$500M. It now stands at above $2BN)

    On current evidence, we learnt nothing from these bitter experiences as history is repeating itself.

  57. As I watched RB board the aircraft…….I nearly threw a shoe at him! Already goin on holiday!! And for wat???? What exhaustin work has he done to make him think he desrves a holiday?? All, at our expense!!!

    x(>:p

  58. Girly, Nyama Soya has gone to Mfuwe because he is carrying on the Mwanawasa legacy. How do you forget that even the late used to go to Mfuwe for holiday.

  59. Rogue Trader. I wish there were more comments as enlightened and coherent as yours on LT, the discussions would be more insightful. Keep it up.

  61. #58 Rashid Jones

    You are right. RB is merely carrying on with the legacy of going to Mfuwe. Is this the kind of leadership we need? I recall Gordon Brown cancelling his holiday in August last year to deal with an outbreak of foot and mouth disease. We are in the midst of a crisis and the least one would expect is a symbolic gesture from our leaders to acknowledge this.

  65. 32. Fine!

    ” Rogue Trader those who wanted Magande to go for the third term because they taught he was the only driver were making a big mistake. ”

    The problem with the present guy is that he is no different from Magande – they are both neoliberals.

    What is needed is someone like FDR, or Huey Long in Louisiana, who will start infrastructure projects and build up the agricultural sector.

    Both finance ministers however believe in the ‘free market’, even when all evidence shows that neoliberalism is a failed ideology.

  67. Its very sad that we can be in a situation like we are in today and our President even has the luxury of going on Holiday. One sad reality is that these guys are blinded by the money they are getting so they don’t feel the pinch. I mean they don’t buy fuel for their vehicles so they don’t mind if its reduced or not. Its sad that today if you drive to any place in Lusaka, you keep asking yourself “What else do I need to do in this place so that I don’t come back in the recent future”. Sometimes I feel there is something wrong with country, seriously long. All we can boast of after 44 years of independence is peace. Zambia is a peaceful nation, that’s all. Dear Lord.

  68. Rogue Trader, I have said this time and again that Nyama Soya is not a leader. He thought ruling a country was something very easy but now he has seen that its a rough road. Lets wait and see

  69. #65. MrK
    I agree with you. The term ‘Free Market’ is a very universal term, meaning that it carries with it some universal principles.
    But remember that these so-called ‘standard principles’ are not actually necessarily standard because they tend to weigh more towards the developed and the developing nations, and not the HIPC countries.
    Therefore lifting these principles as they are and plugging them into an economy like Zambia will always produce rude shockes.
    Any leader in Zambia must study the Zambian environment well before looking at waht is taking place in the west or far east. The ability to filter from these international economic theories what fits in the Zambian is key.

  70. 69. Fine!

    Not just Zambia, but the USA itself is suffering from neoliberal policies – in their case the outsourcing of their manufacturing capacity to low wage countries. As a result, incomes have dropped and the entire economy since the crash of 1987 has been built in artificially low interest rates, which led to a massive increase in the use of credit by the consumer (2/3 of the US economy). That is why they are hit so hard now.

    So I’m saying that neoliberalism isn’t even suited for developed countries.

  71. ” Any leader in Zambia must study the Zambian environment well before looking at waht is taking place in the west or far east. The ability to filter from these international economic theories what fits in the Zambian is key. ”

    And even study how today’s capitalist economies grew. The US and South Korea built a firm economic basis on protectionism. The last thing they engaged in was opening up their markets to foreign companies. There is a great book out on the hypocrisy and ignorance of neoliberal economists, called Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism, by Cambridge economics professor Ha-Joon Chang.

  72. #71 MrK, you have good points but I’m not sure they are being well understood on this forum. I fear most of the people blogging here are confined to simplicity of thought. Very few have time to think deeper and read between the lines. Alpha Male & 1984 (from another thread) are 2 such.

  73. GIRLY….

    my sis how are you doing?i have missed you bigs.
    where is matworld?

    am so surprised that RB can comfortably take a holiday inmfuwe even when things in this country are bad.ha! this is so selfish.see even the crisis hasnt affected him in any way coz he has all he needs at s/house.he cant think of his people us the poor zambians.am disappointed.

  74. ” Any leader in Zambia must study the Zambian environment well before looking at waht is taking place in the west or far east. The ability to filter from these international economic theories what fits in the Zambian is key. ”

    I agree but I think that so much study isn’t even necessary. It is pretty obvious – 80% of arable land is not in use, 97% of arable land depends on rainfall and is not under permanent irrigation, very high official unempoyment and millions of unofficial businesses – those are the growth areas and potential for the Zambian economy. Not special economic zones or FDI. The problem is that the present crop of leaders is still looking abroad, instead of at home.

  75. You see not every one is an economist or comes from a financial or accounting background on this blog, others are engineers, doctors and computer scientists like myself and so forth and so on. However, whatever your specialty, the effects of an economy in a recession affects every one. So Nine Chale # 72, its not about simplicity of thought or reading between the lines. Its about explaining issues in a way that even lay men on the topic can understand even if its not their specialty as long as it affects them. I would like to believe that even the most complex of theories or principles are built from simple individual theories. And it is such you need to use when your audience is varied.

  76. Hi alpha,

    thanks for including me in your govt. Come 2011, Zambia shall change. Ok..lets proceed with business now.
    Nyama Soya has gone to Mfuwe..is it true or may be you guys are kiding??? How can a normal person do such an abnormal thing. Your house is in crisis, no food, you are threaten with power switch off by ZESCO, water bills are pending, and then you deside you are going for laisure?? Please nangu tapasoswa bane..He is even passed age of leissure, instead he would have devoted his last time to work for Zambia. This is what a person who never thought of being a president in is life can do. How can he leave dull TETA alone?? people mulechimona mu Zambia..Nomba elyo lyasula bane.

  79. #74. MrK
    Studying does not always have to take ages. Mere analysis as you are doing is study; the aspect of recognising what Zambia has and putting it into perspective for the best benefit of our economy is in itself study. You can study something for 10 years but there are also issues you can study in a matter of days or even hours.
    Knowing that Zambia has land, good rainfall, manpower, etc is good information. But this is not enough until it is linked with the general culture and attitudes of our people. What is it that can be done to deal with perceptions of people, and let them understand they have potential to make contribution and come up with firms.

  80. #75 Alpha Male, I get you. It’s just that I have made the observation time and again that whenever economic issues like this arise, the contributions are generally low and most of the comments are “regular” as compared to other topics like Lifestyle or politics. It is on this observation that I based my comment.

  81. #75. The alpha male
    I agree with you totally, it does need and economist to understand business environment.
    In fact the reason why the MBA was primarily created was to be able to tap the vast abilities of seeing opportunities in our various fields of study and being able to explain these issues for the benefit of the business professional guy and also for the benefit of their own potentials.
    We expect an engineer to see business opportunies in the engineering field more that an economist who may come in later in the process.
    We expect a mining engineer or computer technologist to see oportunities in their respective areas much more than the other professionals.

  83. #80 Nine Chale, I hear you. Now one thing that I tend to agree with Fine on is that we Zambians are good at talking but we always shy away when its time to delivering. This behavior is also visible in how we place a gap between theory and reality. In my view theory and reality are supposed to work hand in hand. You have theory on the left hand which is supposed to be perfection or a utopia or a wish list which you aim to achieve and reality on the right which is how close you get to theory. Therefore the closer the better. However in Zambia and Africa generally, we treat theory as an end and not as a means to an end. To us theory is a product in itself. Cont…

  84. Cont.. That is why we can have Dr. Katele Kalumba who despite having all the good theories he learnt in class, goes and practices black magic because he doesn’t think those theories will help him in this case. That is why we have Dr. Musokotwane who has the good theories that he acquired to be a doc which could have helped him predict the future of our economy, but goes and makes a baseless statement that the Global Economical downturn will not affect us. That is why we have medical doctors dying of HIV Aids because of having unprotected sex, Electrical engineers living in poorly wired houses, architects living in poorly designed houses.

  85. Cont.. We have organizations with very good business plans, very good mission statements on paper yet making loses year in year out. We seem not to know how to interface the theory on paper to reality.

  86. FAT ALBERT HAD NO PLANS FOR THE COUNTRY HIS AIM WAS TO ACQUIRE A LIFETIME PENSION. WHATMORE WITH THE BENEFITS THAT COME WITH BEING A FORMER PRESIDENT

  87. Ati is disasta iz when some Tonga guy goes 2 the doctor
    askin him ” castrate me! castrate me” Dont u know that its a custom
    for Zambians…
    Only 2 realise 2 weeks later that he wanted 2 be
    Circumsized.
    :-h

  89. There’s nothing new in this story. By now we should be discussing whatever concrete measures have been put in place. We have known for some months now the effects of the credit crunch on Zambias economy.

    So Dr Musokotwane, tell us what you are doing the situation, not describing the situation. We want solutions.

  90. GDP = consumption + gross investment + government spending + (exports ? imports), or,
    GDP = C + I + G + (X-M).h)
    #C (Consumption) is private consumption in the economy.
    # I (Investment) is defined as investments by business or households in capital.
    #G (Government spending) is the sum of government expenditures on final goods and services.
    # X (Exports) is gross exports.
    #M (Imports) is gross imports. Which of these variable must we work on to improve our GDP

  91. :-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h:-h

  93. Breaking News: The second Zambian Citizen to go to the Antarctica is on his way to there. Ionospheric Physicist Mr P. Sibanda is set to do some interesting work there for a period of 3 months of which I suspect will include some SOFTWARE installations on the RADAR systems.

    The brother is scheduled to return on the 5th of March next year. He can then be reached for a comment on his stint. :)] at that time for true and proper details.

  94. Zambia’s 2007 GDP position.
    Org Position Amount in USD Highest nation Lowest nation
    world bank 106 11,363 USA 13,811,200 Kiribati 67
    IMF 110 11,411 USA 13,807,550 Kiribati 67
    CIAworldfactbook 111 11,160 USA 13,840,000 Tuvalu 15

  95. 91. Rashid Jones, greetings. Please, you and others, let us al be economical with the way we USE THE LT PROVIDED ANIMATIONS. I think, using one morer than necessary times in one contributions is really irritating to my eyes and probably other bloggers.

  97. :((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:o:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((:((

  100. @-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-)@-):*

  102. “HH gives RB Business tips
    The UPND has proposed a set of short and long term measures to help cushion the impact of rising commodity prices and the global financial crisis.”

    Source: ww w. zambianwatchdog. com/ ?p=774

    This is what real men do instead of behaving like boys who make noise like gongs.

  103. 97. Sarah Palin and 100. Sony Ericsson Phiri, please read my #95. Maestro Hhehhehhehhe comment.

    Have a blessed day.

  104. ‘GaZZie Bo’ says merry Xmas y’all and lets have fun! I wont let some clowns boggle me down, i have worked so hard this yr.

  108. Economics is interestingly challenging. There is no real test of prudent economic management without making people understand that you cannot spend what you don’t have. That has been the real problem in Countries like the UK and USA. These credit card transactions are not sustainable so people with money have simply taken stock in order to avoid the insurmountable debt burden on people. Credit crunches those who live on borrowed money. Borrowe sensibly and invest wisely and you will be a happy man. I rest my case.

  112. situmbeko musokotwane, it is obvious naiwe. what’s wrong with you? that is why you failed to teach at unza because you used to bite yourself in NELT.

  113. All Zambians Please watch this Interview on Youtube, Zambia does not have leaders, The loans they are borrowing just enslaves a country Please watch this video by John Perkins on Youtube “Confessions of an Economic Hit Man – Part I”

  115. The dollar has gone up in some parts of the world but its really going down pa China.So don’t say all over the world ba tile (no no no)

  117. 56. Rogue Trader

    ” – The high debt we incurred by borrowing for consumption and balance of payment support as opposed to borrowing for capital expenditure (post HIPC, our debt was about US$500M. It now stands at above $2BN) ”

    You are absolutely right. Every cent borrowed by the government should have gone into infrastructure and agriculture. If the government needs to borrow for balance of payment support, it should spend less instead of borrow more. Zambia has 29 or so ministries, lots of duplication of tasks and positions that can be scrapped. And yet, ‘not enough money’ to hire more teachers.

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