Zambia needs a growth in real Gross Domestic Product (GDP) of 12 percent per annum which should be driven by massive investment in priority sectors of the economy, the Bank of Zambia (BOZ)has said.
BOZ Governor Dr. Caleb Fundanga stated that the 5.1 percent growth in real GDP was not adequate to eradicate poverty in the country.
Dr. Fundanga said Zambia needs to attract investment in infrastructure development that will subsequently spur economic development.
He pointed out that the country needs investment in the transport sector following business opportunities that are opening up in various sectors of the economy.
“ In order to consolidate the recent economic successes and to realise full potential , Zambia needs to address the large infrastructure gap that is inhibiting further growth.
The country needs investment in the railways transport, we need to replace the diesel locomotives to the electric train so that we can cut on costs on diesel,’ he stated.
Dr. Fundanga noted poor infrastructure and inadequate accesses was resulting in significant increased cost of doing business , making it difficult to integrate the rural population with the rest of the economy.
He further pointed out that the country needs investment to utlilise the abundant water resources in order to generate water for both local and exports to earn foreign exchange.
Opportunities for the export of power are available, Dr Fundanga noted especially in East Africa where the region was not able to generate sufficient power to meet its demand.
Speaking at the Euro Money Conference, Dr. Fundanga however, stated that the country has continued to perform well as evidenced by the GDP which averaged 5.1 percent per annum over the past five years which was mainly driven by the Mining, Tourism, Construction, Transport and Agriculture sectors.
The Governor added that GDP per capita also rose to US$ 934.5 in 2007 from US$ 360.5 in 2001.
He added that the country’s trade balance rose to a surplus of US$ 983.1 million compared to the deficit of US$ 342.2 million in 2001.
Giving an overview of recent development in the country, Dr. Fundanga attributed the outrun to high receipts from increased copper exports following increased production and record high prices on the international market due to strong demand mainly from China .
He added that Non Traditional Exports (NTE) has over the past five years rose by 260 percent from US$ 255.7 million in 2000 to US$ 920.7million in 2007.
ZANIS/ENDS/MK/CLM.
“Zambia needs to attract investment in infrastructure development that will subsequently spur economic development”.
Dr.Fundanga, perfect economic push.
Yes get investments to build infrastructure and not this so called Tax Free Zone and those leaving huge holes the ground in our coutry. Get us the infrastructure please and we shall do the rest.
The investors they need are not the Chinese, they need investors from europe, zambians and american companies. Japan has been in Zed for a long time but they are selfish when it comes to distribute their wealth. Indians they suck, they mistreat zambians as if it their country.
It is wishful thinking to dream that investors would come to Zambia and expend capital on infrastructure. This is the role of the governments. Go to China today and see the economic miracle sparked by the great Deng´s decision to open up his country by massive government investment in infrastructure coupled with production orientated free trade hubs like the one created in the Copperbelt of Zambia. Looking back at Kaunda`s ideas, one wonders why Zambians have such a short length of memory. He tried all this and yet they tossed him out for a Katangese bushman who kantembanised the country claiming it was enterprenurial benchmarks.
Sipopa Muhapi wa Linaha # 4,
I like that! where you register your admiration for the Deng Xiaoping models that drove the modernization of China from years of failed Chairman Mao’s policies. believe you me; you’re just Captivating some of us into a straight talk.There is no one i personally admire more in economic leadership like Deng looking at his vision, determination and drive. To this world he left a lot for poor countries to learn from his experience.I have looked how he modernized and mechanized the agriculture, infrastructure, education and the military PLA.Fascinating ambitious leadership.
Do you know that its from the Chinese vision where we picked up the idea of the state farms we developed around the country under UNIP? Its sad that instead,Chiluba dismantled and shared them all among his surrogates? President Mwanawasa with his passion for farming would have approached that responsibility with wisdom so as not to destroy our productive capacity.
This why some us challenge our young brother Hichilema with his narrow touching political economy rhetoric based on appeasement.He is still distant from graduating in is learning curve if he has to be ready for a leadership in difficulty times as we are in. When he talks, i see a person far from proving himself as one of the much desired transformative leader worth taking from Dr.Mwanawasa. Emerging savvy and ambitious political economic machines will size his dream into a life time nightmare.
He is still distant from graduating out of his learning curve
12 PERCENT
HA
i would pay money to see that. govt please stop dreaming.
THE BOZ gov. is right. we need to invest in infrastructure. before we invest in electric trains, we need to tackle the power problem first, then trains, airports, roads, communication, etc.
the rest of the sectors like agriculture, banking, housing, hi-res buildings, etc. the free market can take its course.
It is the govt’s role to provide infrastructure such as roads,power to allow development of dependent sectors. This can be done in partnership with private companies. It is irresponsible for a govt to expect a private company to invest in infrastructure from which it will gain little or nothing. What incentives are there for a private company to carry infrastructural work?.We are seeing increasing levels of inflation which are reducing the purchasing power of most people. It is all nice to talk about GDP but this does not reflect the true picture of the economy. Can Dr. Fundanga give us a true picture of the Zambian economy and the impact of unbridled greed aka free market?
Bo sipopa mina that so called katangese bushman dressed up your nude families in Shangombo.No one is perfect not even you or your mother or your sister or anybody you find in this world.Learn to see the good in every person and stop being to harsh on a human being rather be harsh on the issue.
He who has no sin let him cast the first stone.
I man simply wanna know where all de tax money goes?
#3 Kaponya pa Zed, it doesn’t matter which direction investors come from. What you must be concerned with is, how effective are the Zambia’s industrial laws to deal with rogue investors. Be informed that there is no investor who willingly abides by the laws. Abiding by the land laws reduces profits. There4 its up to the govt to put in place machinery to enforce such laws.
#4Sipopa Muhapi wa Linaha, your contribution is effective and very true. I hvae always said its govt responsibility to facilitate investiment by critical infrastructural development. Investors are not interested in developing your infrastructure, because these are very long term projects. They take many years before you…
…start ripping their fruits. Investors don’t like waiting 4 such long. They are there to quickly make money and probably go. Truly, lack of infrastructure is really slwing (even stopping) Zambia’s economic progress. The message is in black and white. The govt just like ZESCO, will be caught pants down. ZESCO has been caught napping because the management ignored all economic indicators. There4, management could not plan for increased demand for power. I think what Zambia needs is regime change. To usher in a different 1 whose main concern will be infrastructure development.
I agree with dr. fundanga 100%. With hindrances such as those brought about by lack of infrastructure and reliable energy, one retards stable economic growth. I hope the government’s looking into this..
12% is very unlikely..especially with the cost of oil being rumoured to hit $250 a barrel by 2010!!!!…HOLD ON TIGHT BOYS..HERE COMES THE RECESSION!!!!
12% what is the big deal, Dubai grows at 16%, offer incentives and in Africa even just a stable Government is incentive enough, we have started, Sata/Levy reconciliation, let us see how the NCC does its job, it is doable, i might be overly optimistic but it is doable. Then let us do infrastructure, the value of time is critical and that we do not seem to appreciate in this country and we are losing money because of that.
Caleb! Tell those yokels in govt 2 stop useless expenditure like givig 5% interest car loans to loud mouthed 150 chiefs & Magande telling Zambians to minimise fuel consumption.
12% is unattainable with this mediocrity
At current kwacha/dollar rate, it appears that it is much cheaper for Zambians to import items from neighbouring countries than buying them locally. It is certainly good for the mines in terms of buying parts and machinery. However, the reverse is equally true. It is much more expensive to export Zambian goods including copper because of the strong Kwacha. Can someone advise, what is the catch there?
At the expense of sounding ignorant, isn’t he stating the obvious here? We all know these things…are you saying the Chinese and South Africans who’ve put up 10-man companies are spurring the economy on?
Mwe bantu please … we’re like a country up for grabs!!
This government is a working government. The team in cabine and mwanawasa are doing their best to resucitate the economy.
VIVA VIVA
Number 12(alias Hola),
My brother a thief is a thief,you don’t need to defend him just because he is your tribesman.Shangombo people were dressed because that is what every govt should do,after all that money was either tax payers money from within Zambia or abroad(donations).
Sipopa is 100 % right.
It is time Bembas started avoiding theft so that together as a nation we develop.
#23 if you really wanna be like Obama, then you better start by emulating his high profile of diplomacy and esteem for your fellow countrymen. Or else activate your own forum where you can expose your shallow, tribal foolishness!
First things first. GRZ should not run away from some of its core responsiblities including proper use of the taxes collecterd. Development of certain infrastructure should be driven by Government. A greater % of the taxes collected should be directed and used wisely in productive areas. ZRA is collecting to meet their targets lets just check how this money is being used.I am sure we can see a difference.
The Americans have been threatening the chinese over allegations the chinses deliberatly are keepng thier currency low with repect to the dollar. There are good reasons why the chinses do this. Now in zambia think a strong kwacha is development, wake up GRZ. The kwacha is only incureged to be strong by the pipo who whant to buy our raw materials at bargin prices.
Economists am i right ?
Dr. Fundanga, double digit growth!! You must be kidding, be realistic. Work on sustaining the same 5.1% for the next ten years, amending investment/labour laws to benefit Zambians, aggressively invest public funds in education (mostly in trade skills) and enact some sort of tax shelter for investors who keep their profits in Zambia. That’s more realistic to reducing poverty.
And please don’t go on about exporting power to Eastern Africa when we can’t even meet our local demand bwana BOZ gov.
#26 the real shushushu, I am not an economist. But, thats one of the major reasons clever govts decide to suppress currency strengthening in relation to other strong currencies ($…).
There are other economic reasons better left to an economist to explain. But totally agree with you.
…#27 has already mentioned it. Of course why should Zambia start exporting power when there is even a question mark of whether Lumwana will start copper production due to power insufficiency. Do our Zambian leaders think using their brains or bottoms? Fully, power Zambia’s industry and solve domestic power cuts (load shading ++) before thinking of exporting power to other countries. To me thats giving investors (lacol or foreign) an enabling environment.
Ask a Zambian grade 5 kid to name one of the first things we should not export right now, they will probably mention electricity.
You don’t need Econ101 to conclude this! But for the whole Bank governor to encourage this when we have a domestic power deficit baffles me! God save us!
Can BOZ buy the governer a more modern computer? The picture in this article displays a rather dated machine, a flat screen monitor and smaller and faster machine would convey the sense of the progress the Governer keeps talking about..cmon BOZ
#19 Wanzelu,20 Anonymous. Good points.BOZ check the exchange rate before it starts to bite in the backside of NT exporters if it is not hurting already. Tourism may be hurt too (This will be an expensive destination). Other regional currencies’ rates are being lowered eg RAND. The economy cannot thrive on imported used Japanese cars and imports fom Dubai. That much Governor Caleb knows. Balance your act.
But mudala Fundanga, how do u expect to supply those electric train with power if as of now the country is experiancing power shortage! It will be nice to have those trains but plz see to it that your friends in the power sector address the issue of loses
#26. the real shushushu
Your comparison between Zambia and China/South Africa is very wrong to say the least.
China/South Africa are integrated in the global economy. They produce goods and services that are exported to other countries. These goods are subject to supply and demand since there are other alternatives to the goods produced which is why a lower currency meaning lower prices for goods and services in China and SA. Some of these goods include technology, etc.
CONT…
In the case of Zambia. Zambia produces little if not any technology. Mining (copper) makes up a large part of our GDP. Copper produced in Zambia is not that very different from the copper produced in Chile. Copper is also subject to supply and demand and they aren’t that many alternatives to copper (i could be wrong).
Now this is where my point comes in. Like i said, Zambia does not produce any copper and manufactured goods make up a very small part of Zambia’s GDP. A stronger currency means it’ll be cheaper to import technology used in the strongest part of our economy (in this case mining). Now a strong currency is good in the short run in the sense that technology used for
CONT…
producing manufactured goods will be cheaper since Zambia does not produce any of that technology. In the short run it’ll be good because Zambia can import a lot of technology used to produce goods and services (e.g Electric trains, fibre optic cables, etc) and this technology can give us a chance to build our manufacturing sector.
In the long run however, the currency will have to be lowered a little so that we can start exporting the goods produced once the manufacturing sector has been set up and is making a reasonable part of our GDP.
In short, strong currency is good now but bad in the future if our economy develops.
I hope you get my point from that.
sentence correction: “Zambia does not produce any technology and manufactured goods”
#34-37.Crazy Zambian .Someone from CSO?. How much has been spent on electric trains and optic fibre imports in Zambia? Also how much has been spent on second hand cars and Dubai trips? Someone from ZRA where are u making the most in taxes? As forthe mining companies I know that these earn their income in USD and its banked overseas only a trickle is released to meet local supplier/payroll/tax obligations. They dont need a strong Kwacha to buy dollars for purchasing mining equipment. THEY SELL THEIR COPPER IN DOLLARS!!SO THEY HAVE PLENTY DOLLARS Crazy Zambian pick up an economics textbook to read and please think through before rushing to the keyboard.
# 34-37 Crazy_Zambian thank you.
# 38. Theoretician i think crazy zambian was making an example when he mentioned electric trains, at least he took the time to try and educate his fellow countrymen less versed in economics.
If you know so much why don’t you try to explain to some of us patiently ?.
Crazy Zambian has some great points, but goes off topics!!You seem to know a lot, and I would suggest that you take some time to evaluate you
I would suggest that you evaluate your postings a little more detailed. I like to read your comments though!
My dESK is usually full. As far as I know manufacturing has been on a death bed since 1991. Unilever, colgate etc clsed factories & now have warehouses for finished goods from SA/East Africa. Most consumer goods that we used to manufacture are now imported.Go to shopite spar etc. If these companies took manufacturing away when the Kwacha was 4500. It becomes even more profitable for them to import when the rate is 3200 whilst zmk prices are rising because make huge profits in dollars when the convert their ZMK sales into USD.They can even afford to undercut prices and drive the few Local manufacturers out of business.Sharp locals will close factories & start importing cheaper finished good
i.e. their production cost will be higher and volume of sales in zambia would be small as demand/market is small. Forget about exporting.
To hope to build manufacturing now using cheap forex (whilst killing the existing NTE industry) is the same as hoping for the proverbial 2 birds in the bush and let go of the one you have in the hand(kill you current NTE industries). The best way to use our newly found windfall USD is to create reserves and/or build infrastuture.The price of copper shall not stay the same.A rainy day shall certainly come!
#39 The real shushushu Kindly google this article it explains zambia’s monetary policy and the implications.:The Dumping Ground
As Zambia Courts Western Markets, Used Goods Arrive at a Heavy Price
By Jon Jeter
Washington Post Foreign Service
Monday, April 22, 2002; Page A01
Source washinton Post:This southern African country once had a thriving clothing industry. But when government officials began opening Zambia’s economy to foreign trade 10 years ago in exchange for loans from international donors, tons of cheap, secondhand clothing began to pour into the country, virtually duty free.
Not especially efficient, Zambia’s textile factories were overmatched by the wholesalers, who could deliver affordable, passable clothing without paying production or labor costs or the tariffs that once protected local manufacturers from foreign competition.
So, Zambia’s clothing industry all but vanished. Within eight years, about 30,000 jobs disappeared, replaced by a
So, Zambia’s clothing industry all but vanished. Within eight years, about 30,000 jobs disappeared, replaced by a loose but crowded network of roadside and flea-market vendors beckoning shoppers to “rummage through the pile,” or salaula in the language of Zambia’s Bemba tribe.
The expansion of global trade following the end of the Cold War has transformed Africa into a dumping ground for what the industrialized world no longer needs or wants, a deluge of secondhand clothes, used cars, old furniture and tools and weapons.
WITH cheap dollars we should see more secondhand clothes, used cars, old furniture and tools, expired or near expiring consumer goods = DUMPING GROUND
Any serious investor in manufacturing will do an evironmental scan/SWOT analysis. Most likely he/she will conclude that the zambian market is too small(low sales volumes& stiiff competion from cheap imports), the manufacturing industries are not protected from cheap imports, the ZMK is too strong and will thus make his unit costs very high and hence uncompetitive on the export. market.Equipment/technolgy is just a one off expense and must be recovered from a high sales volume. Thats when variable costs come in and these will be in “strong’ ZMK. By the way investment decisions (have rigorous process) & are not made overnight like deciding to buy a bale of salaula or a used car from japan
HH has been saying the same time and again, but it appears people don’t want to listen. Anyway we will be coming to visit Zambia untill such a time when people get serious and know how to elect leaders. It is a shame that at this time people can think that a person named Sata can lead the country. Anyway, let him rule so that those who think he can make a better president will eat soil and probably they will realise that tribalism can’t feed them or indeed take them anywhere.
I wish Zambia the best anyhow. Mwanawasa has done his part under a lot of difficult conditions mainly because of Sata. Who knows the economy would be growing at the desired rate of more 12% had he been…
given time to concetrate on working rather than been attacked unfairly by Sata. It is good that Sata has stopped his attacks on Mwanawasa though it is just that he feels ashamed after he was helped at a time of his ilness.