Thursday, March 28, 2024

Zambia’s international reserves of $1.7bn highest in 38 years-Fundanga

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Bank of Zambia Governor Dr. Caleb Fundanga
Bank of Zambia Governor Dr. Caleb Fundanga

THE Central Bank says Zambia’s international reserves, now standing at US$ 1.7 billion, are the highest attained in the last 38 years.

Bank of Zambia Governor Caleb Fundanga said international reserves are expected to rise to about five months of import cover by the end of 2009.
Dr Fundanga said this in Lusaka yesterday during a third quarter briefing.

He said international reserves stood at US$1.4 billion before Zambia was hit by the global financial crisis.

“Having adequate reserves is important because if there is any external shock, the reserves can help to stabilise the Kwacha and cover up imports,” he said.
Dr Fundanga said Zambia’s overall balance of payments support position improved to a surplus of US$ 645.5 million in the third quarter.

He attributed Zambia’s balance of payment position to improvement in both the current (exports earnings that rose by 45.7 per cent) and the capital and financial accounts.

Dr Fundanga said capital and financial account surplus had a large increase to US$532 million from US$129.7 million recorded the previous quarter.

He attributed the increase in capital and financial accounts mainly to receipt of special drawing rights of US$627.3 million from the International Monetary Fund and an increase in capital transfers to US$65 million compared to US$41.4 million in the previous quarter.

Dr Fundanga said the gross domestic product (GDP) growth as projected by the Central Statistical Office at 6.3 per cent for this year was primarily driven by increased output in the mining, construction and agricultural sectors.

He said mining is projected to grow by 21 per cent, construction by 15.5 per cent and agriculture by 7.1 percent.

Dr Fundanga said growth in manufacturing was supported by increased output of cement, clear beer, soft drinks and milk by 30.4 per cent, 11 per cent, 15.4 per cent and 14.9 per cent respectively.

During the quarter under review, total output of soft drinks increased by 15.4 per cent to 91.968 hectolitres from 79,654 hectolitres produced the previous year.

BoZ also notes that production of milk increased by 14.9 per cent to 7,923,382 litres from 6,892,785 litres produced in the previous quarter.

He said tourism also registered an increased number of arrivals at the country’s four international airports to 102,918 passengers from 88,066 passengers in the second quarter of 2009.

He further said the number of tourists visiting national parks was 26,720 in the third quarter of 2009, up from 11,440 in the previous quarter.

Dr Fundanga said total investment pledges in the real estate sector stood at US$622.8million, compared to US$567.2 million in the second quarter.

He said when fully executed, the pledges were expected to generate 5,594 jobs.

[Zambia Daily Mail]

65 COMMENTS

  1. Well the numbers don’t lie and as I have said before on this blog, our party president has performed well under the circumstances and Zambia continues to progress. The president has managed to continue growing the economy from the time he took over and you need a growing economy first to solve some of the social problems. Things like Jobs and poverty reduction are a lagging indicator. They will eventually get solved if we continue to grow at the current pace. Everybody knows the US is out of recession, but their economy continues to lose jobs.

    The Economist is in charge. Watch how he leads our great country to prosperity. SATA and group would have erased all the gains our great late president Mwanawasa archived. So Solwezi please vote wisely

  2. I think this is misleading. How can the entire bank governor and I presume with money & banking knowledge make such a naive statement. $1 bn 38 years ago is not the same as $1 bn today. For your own information Mr Governor, the dollar lost 20% value just in the last two years and and it is even more if extrapolated over 38 years. More money does not mean more wealth. Zambians have more money today than 38 years ago, but their money is worth nothing. Almost 90% of Zambians are millionaires in Kwacha terms today but it means nothing compared to millionaires in Kwacha terms 38 years ago. Mind you the dollar is not imune to inflation. Please Mr Governor stop being a politicians and be an economist and a banker please and put things into perspective

  3. This is encouraging news on our International reserves.I thought the crisis willhave an inverse effect on our reserves.What is also encouraging are the levels of our reserves in 38 years.Caled well done,no wonder ADB is missing you.

  4. Bootliker go and sleep. I have not even a $ to spare in my house. I wonder what the guy in Shangombo is surviving. Where are the reserves then when poverty levels has reached its highest?

  5. This is very misleading. What has been the trend in reserves per capita (per person) over the past 38 years? Can we even compare the per capita reserves of Zambia to Tanzania or Kenya? Is this $1.7 bllion Gross reserves or Net reserves (loans from the IMF removed)? Isn’t this rise because of IMF lent Zambia some grudaz. How can he boast of an increase in reserves when the addition is borrowed funds?

  6. That is good news coming from BOZ Chief. We are yet to see creation of 5,594 jobs I dont from which sector? I would be comfortable if the US$1.7 Billion Foregin reserves is from local aconomic activities and not from either IMF or world bank as kaloba.

  7. And the poverty levels are rapidly increasing and the kwacha is not stable.So you are saying clear beer consumption is likely to grow more than the mines growth?

  8. #4 Chinondo those are professionally calculated statistics and amounts. Inflation has been taken into consideration do not worry too much about that. However although on the ground these results cannot be seen, and translated into poverty reduction, we should still give credit where it is due! Congratulations governor, keep it up! That is a record to be proud of!

  9. This like a parent who puts money in some bank, fattening the bank while the children are sleeping on empty stomachs. Well said ba Fundanga, can you now give the debt ratio and how much we owe to the world bank and IMF? Give us also how much we owe foreign nations and how you intend to pay back? What benefit does it do the nation by you trying to lie so openly knowing that as I am writing this our nation just more debt thru interest on what we owe? Zambians, getting excited on borrowed money.

  10. The Governor is now panicking, were you told the Jacob Mwanza eyes your position! MMD should not make you make such pronouncements, leave that to Situmbeko. You are carrying Levy’s legacy. Your friends were fired eg Magande, Sisala, Kapitolo, Nkole, etc

  11. “He attributed the increase in capital and financial accounts mainly to receipt of special drawing rights of US$627.3 million from the International Monetary Fund”

    This is crazy.. borrowing from the IMF and saying that it is an achievement .. highest in 38 years??

    so Zambia got a better credit limit.. these MMD chaps are just going to plunder some more with FJT scott free..

  12. Whats the point of keeping huge international reserves when the the kwacha has suffered major decline in the past and worse off during the peak of the economic downtown and little was done to stabilize the currency. We have in recent past on LT questioned the assertions by Fudanga and his friends in boasting of statics that has not helped with stabilization of the kwacha, the kwacha price of a dollar kept on rocketing and the reserves where not offloaded to demonstrate how the Zambians are expected to benefit from the international reserves. From the figures being given its hard to believe BOZ touched the reserves to stabilize our currency and protect the liquid investments of citizens and attracting FDIs.It is very sad to note that you back with the old stories and expect an applause

  13. yap as most of u have observed this appears to be good .But economist out if we have so much in reserves why is our kwacha still so weak ,or doesnt the law of supply and demand apply here.Same quarter last year dollar was trading at K4,625 and now (sept 2009) K4,750. More so the dollar has lost value of the same period.

  14. Its like having billions in Zanaco, but you cant buy uniforms for your children. All you do is move with your bank statements showing off.

  15. Yes these are very good numbers. This is a sign of progress and also a sign that the RB administration is working hard to move the economy forward.

    On another thread I had brought up some information that Zambia is set to progress even further because for the first time we have been blessed with what someone else called the 3 E’s (Economist as President, Economist as Central Bank gov, Economist as Minister of Finance and NP). Surely with this blessing, Zambia is set to move forward. To that blogger, here is but just an example of progress under the 3 E’s.

    There was also a report released which stated that African currencies are expected to appreciate with the Zambian Kwacha leading in this appreciation. People be patient and work with govt. The 3 E’s are working hard.

  16. I actually didn’t understand the article what does it mean to have so much money in reserves.should my uncle in Chitokoloki start rejoicing? is that road to Zambezi finally going to tarred?Is the govt finally going to find a bigger market for my cousins pineapples in Mwinilunga, can my sister leave that pathetic looking place called Lumwana? Is a proper dual carrriage way going to built from Kitwe to Solwezi? If the answer is still no,Mr Fundanga why should I rejoice? My people are worse off than they were 38years ago and I continue being an economic refugee in SA.

  17. and you say this is an improvement? look at this part of fundangas nonsense carefully and you will see that much of the 1.6 billion dollars is IMF money and i quote”He attributed the increase in capital and financial accounts mainly to receipt of special drawing rights of US$627.3 million from the International Monetary Fund and an increase in capital transfers to US$65 million compared to US$41.4 million in the previous quarter.”

  18. Thats good but is it benefitting the ordinary zambian or just enriching a couple of GRZ officials. Otherwise its meaningless if it comes with no economical prosperity.

  19. #16 you are spot on!!! What about the contribution of the diaspora? People outside the Country are breaking their backs in order to feed the relatives left behind. Surely someone must appreciate and recognise their contribution.

  20. Economist are in-charge steering the national economy through global economic crisis. From the executive offices of Nkwazi House, the central Bank, National treasury to Ministry of Finance, National Planning and development, economists are in-charge.

  21. Our reserves are in fact higher than what Fundanga is projecting if we add what Chiluba squirrelled away in foreign banks, tho for personal use.

  22. In any economic system, the trickle down effect is never instantaneous unless someone is talking of Sata’s unscientific 90 day magic power of more money in the pocket of every cadre as long as you can insult MMD and elders. Within 90 days present to the world some historic macroeconomic miracles of new Hospitals and Universities in every distance of 100 miles and chiefdom around the country. give every cadre a job with personal to holder GRZ assigned SUV automobile and Mansion.

  23. Special Drawing Rights, are not extended to everyone Bobbie but where there is evidence of capacity and directions.What this does, is enhance economic stability, confidence and inflow.The monetary and fiscal economics of this administration has been superlatively phenomenon.

  24. Give credit where its due, you cant be negative all the times! Ba zed, learn to appreciate your own leaders! If you cant,then highways 4u

  25. I am not getting any sense from what Fundanga is saying or claiming. Numbers dont mean anything, please translate them so that poverty levels are reduced. You are failing to maintain the lives of just 12M people, what sort of leaders are you? Ask Prof Chirwa to assist you.

  26. Yes Veteran

    Even I wonder how people eat up Sata’s 90 day economic miracle formula which has no evidence of ever happening anywhere in the world. How can someone promise to build Universities in every 100 miles in 90 days? It shocks me that people can support Sata.

  27. The financial crisis was a critical period BOZ needed to demonstrate to the Zambian how the international reserves are utilised to stabilize the currency and main investors confidence. The Kwacha kept on depreciating hitting low levels and Fudanga did little to main its stability ,if anything its hard to believe these reserves touched when you look at the trend the dollar price of a kwacha was diminishing . It is also sad to learn that almost half of the figure being presented is from SDRs (IMF) ,meaning the reserves are maintained through eating the future and nothing will be left for the generations to come . Currency stability is very important in that it deterministic to Investment Premium Risks Zambia has used by Foreign investors to gauge the suitable areas to invest across the…

  28. This is all well and good and generally positive. There is still need to trim the bloated govt expenditure and clamp down on misuse. The payrol is too huge, and as evidenced by revelations of the public accounts commitee of parliament, the little money there is, is poorly accounted for.

  29. Thumbs up, Zambians are the only people I know who even where litte good is done, they will never give credit. I know we are drowning in misery, but we can still come out of the shell and say congratulations…..then get back to our daily cry.

  30. I wonder why people even get excited by some gatekeeper of a usury system. We will always be in debt as long as this “money as debt” system continues to exist. We will need to attain our creator given sovereignity and get real wealth in exchange for our labour. All we get today is worthless paper in exchange for our sweat and blood. Meanwhile, some gatekeeper after a glass of rose champs spins a story about how things are not that bad – I mean look at all the debt we have that we can pass off as wealth. We the people have been had.. complete mugs and we seem to like it. Look not to the hills – salvation is not there – salvation lies within. By the way, never trust anyone above 30 – they will only protect the status quo – too much to lose…bleh.. all excuses.

  31. I WE GOING TO FIND ON FIGURES…WE WANT THAT TO TRANSFORM INTO BASIC LIFE NECESSITY FOR ZAMBIAN….SOMEONE IN SHANG’OMBO SHOULD APPRECIATE THAT BUFFER STANDING IN CENTRAL BANK BY HAVING CLEAN WATER, SCHOOL NEARBY, CLINICS….EMPLOYMENT

  32. I think Fundanga is being silly, stating our national reserves in a vacuum like this and declaring they are the highest in 38 years does not make any sense at all. If he can tell us where this $1.7bn of his stands in terms of per capita it will make more sense and I doubt they will still rank second. Further, deduct Kanitundila’s US$8 million he is Santa Clausing Chiluba with.

  33. FOR THOSE WHO ARE SAYING OUR kWACHA IS STILL WEAK, IT IS IMPORTANT TO UNDERSTAND THAT FOR OUR COUNTRY WHICH NEEDS TO GROW ITS EXPORTS, IT IS NECESSARY TO KEEP OUR CURRENCY WEAK. THIS ENCOURAGES EXPORTS AND DISCOURAGES UNNESSARY IMPORTS. THE CHINESE HAVE ALWAYS KEPT THEIR CURRENCY WEAK TO SUPPORT THEIR EXPORT STRATEGY. LET US NOT BE SO OBSESSED WITH POLITICS AND CONDEMN ANY THING THAT DOES NOT SUPPORT WHICH EVER PARTY YOU FAVOUR.

  34. Bwafya with these economical politics. Well, we have $1.7bn. How is it gona benefit every zambian? Unless you explain and start feeling the effect that when we will be happy. As of now it is meaningless.

  35. Jutsu, can you enlighten the readers here on which country has the bigger government debt or budget deficit between USA and Zambia? Economic statistics need to be interpreted, and not taken at face value. Debt in itself is not bad. It can actually be free money if you use it wisely to get a return greater than the interest you pay.

  36. #38(NKOLE)
    Spot on.The Japanese do the same.At one time Pres Bush complained to the japanese govt to strengthen their YEN to which they responded by making it clear that the weak Yen supports export market and stronger Yen will hut the export market.Here in Russia,the Govt devalued the Ruble by 50% cos a stronger ruble was hurting the export market.

  37. Nkole 38, i agree with you. However, for this strategy to work, the country (Zambia) needs to be a net exporter, rather than importer. It works for China because 1) China imports comparatively very little 2) They produce using local resources to export 3) They are America’s biggest lender, this means their inflows are denominated in US $. They also hold huge reserves (over trillion) which are denominated in US$. A strong dollar is therefore good for them. We rely too much on imports and have not built up enough domestic capacity for exporting. In summary, comparing chinese policy to Z would be true in an economic text book, but reality is somewhat more complicated with a lot of assumptions not holding true.

  38. You can talk all day. Me what I want is this country can go back to the old days when we did not have any kind of poverty ; absalute or relative.

  39. 38 & 41:
    Re the weak Kwacha – Your argument with regard to imports and exports is flawed because Zambia is a net importer and a weak currency is no defence against that as we have no locally produced substitutes (of acceptable quality) for most of our imports.

  40. I have learnt alot from this discussion and my conclusion is that Government should encourage Zambians to produce for export. And this can only happen if we can produce at comparatively low cost or else we will not compete with the international market.

  41. Why have money in reserves when there is no housing,no food,no education,sanitation,no fuel,no medicine in hospitals,sick people are transported on wheelbarrows to hospital and so many basics many Zambians just dream of.I would rather all that money was used now,now than pretend to be keeping it for a rainy day when its been raining continously for 20 years non-stop for 95% of Zambians.What the hell are you keeping that money for?The situation in Zambia is dire.Zambia is like a terminally ill patient!

  42. No # 44, we are not net importers, we are net exporters. Look at at our Balance of payments..This good news , and you sceptics should admit that. What we want to see is this tranlating into better lifes from ZAmbians.

  43. So Zambians are being starved,deprived of basics by this inept government with money in reserves.The goons in government surely are satanic,people are dying due to lack of medicine and you boast you have money in reserves.This governmen needs to be expelled quickly before they finish sharing the reserves.

  44. #39
    the role of Monetary authorities like BOZ is partly to facilitate an enabling environment for investment and growth….things like containing inflation and managing the volatility of the exchange rate among others. A country with import cover of of 5 months, is really a great achievement! Not even South Africa, a middle income country has achieved that.. That amount in forex reserves gives Zambia an effective too to manage the value of the Kwacha in relation to other world currencies.
    Of course this may not (directly) put food on your table, but it is important to place the Kwacha at a level that supports our import requirements while making Zambia competitive in the export sector. So if you look at it broadly, a macro-level it is a commendable achievement. Hands down…!

  45. Ndimwe andani namwe pilizi a #2 Chief Bootlicker mungobvutika pa South Africa apo.Chief booliker you are brainwashed. I don’t know whether you have a little brains in your head. You have believed this lie of Fundanga. In fact its not a lie but a rhetoric that our economy has grown out of borrowed money. Is it not this year when Fundanga borrowed $2 million dollars forn the World Bank to cushion the depreciation of the Kwacha? How can an educated Bank governor boast out of reverses which have grown out of borrowing. You people, you are hearing it yourselves thought we are not experts in economics, that the money that has pushed the reserved has been borrowed from IMF, then where is the sense of pride? Nonsense. Nonsense. Nonsense. Nonsense. Nonsense. Nonsense. Nonsense. Nonsense…

  46. Ndimwe andani namwe a #49 mungo chucha pa South apo. Has the Kwacha shown any signs of recovery compared to the time of Levy when it came to K2,500 per dollar? Dont be good at rhitorics which hold no water. If your economy has done better than South Africa, what are you doing in South africa? Whether its education, then come back to your country for your education if you think the reserves built out of borrowing will help you. Mung´o kamba chabe Nyo-nyo-nyo, bwetu-Bwetu- Bwetu with NONSENSE. Can you boast that you have more money in your account when you have a loan that will make you suffer for years and years. Brainwarshed people pilizi spare us and go where you can lick the boots of RB

  47. Let us give credit were it is due! They say Rome was not built in a day. These are signs that the Zambian Economy is doing well. Infact it is not just figures on paper. I have visited a lot places in Zambian recently and progress is very evident. Construction of all sorts is going on everywhere. I have a feeling that some bloggers are saying things out of ignorance or being mislead by some oppotion chaps like Sata and HH whose sole purpose is to taste State House. Some of you may be blogging from abroad the best you can do is visit ZED and see for yourselves!! The MMD is really doing well on the ground,.

  48. #50,51 Wamweba uyu kapuli Bootlicker.He is telling us nonsense.If he was near me I could boot his backside hard.

  49. One can argue over statistics. What I have seen in Zambia is a mixed picture. You can not compare the situation there now as it was in the mid 1990s as things are getting better. However, we still have a lot to do due to the high levels of poverty that were came about when the price of copper fell over a long period. We can not improve the life of every Zambian overnight but I believe we are heading in the right direction. We need to look at the bigger picture. For example, the levels of HIV deaths are falling due to the fact that more people are accessing ARVS. This is coupled by the fact that the numbers of new infections are also falling which bodes well for the future. I think we should give ourselves some credit on how far we have come, but not lose sight of the ultimate prize.

  50. #52,When last did you visit Chibolya,Msisi,Kanyama,Kamanga, or Shangombo?What growth are you talking about?Iwe ngawaikuta then you think bonse nabekuta?Shopping malls are being built for the rich,what the poor Zambian needs is: Housing,Food,Healthcare,Education not this fake growth you are talking about.

  51. I wonder why nurses, doctors and teachers salaries were not increased???Surely, if Zambia is doing so well… is this not a good way to help the wealth trickle down to hardworking people who contribute to Zambia.

  52. #51
    Let’s not insult each other for no apparent reason. These are issues that we can debate critically and intelligently without resorting to such derogatory speech. Nevertheless, having the currency at K2500 and then again to K6000 within such a short period of time is a clear indication of the how vulnerable your currency is to external pressures. Such volatility is detrimental to economic progress. Having a weaker currency is not necessarily a bad thing. What matters is containing its volatility! I would have appreciated a much more critical response from you, than this shallow exposure of your level of these basic intricacies of economics.

  53. Is Zambia a better place than it was 38years ago? Certainly not.So what is Fundanga bragging about? I think he was much smarter when he was a don at UNZA.

  54. No 50 , 51.. Hahahaha!…Yes , i like that..!..Tell it like it is..!
    .All these statistics & fancy economic theories…..what does it translate to for the common man on the ground?

  55. God have mercy on the bootlickers and their masters for they are morally impotent and blind. Zambia is a very rich country that MUST have hundreds of billions in reserves. The current scenario goes to show that the so called leaders and bootlickers only have their own interests at heart and think this country is theirs and theirs alone and the rest must toil to sustain their well-being. It is even better to go back to the very ancient ways of life where families existed for each other and never had anyone person to preside over others.

  56. NKOLE
    The point you are putting across is valid and I commend you for sharing economic knowledge with the bloggers.
    However , as an economists you must understand that it is relatively fair to have a cheaper but stable national currency for a number of reasons . Firstly, It builds confidence on the current investors and makes it possible to make forecast of economic gains ( cost -benefit ) in the future as the value of liquid assets remains unaltered by currency instability. Zambia has a high Investment premium risk like those of civil war countries because our currency is so unstable such that the value of liquid assets cannot be the same in two years time. We are still struggling to attract viable investors due to high premium risks the country poses.

  57. But pa Zed paliba ubu fontini and ignorance. 80% of the bloggers here have shown clear luck of understanding of what Forex reserves are…. just commenting ma rubbish keka yeka! Ubupuba pa zed ebwafya!

  58. Pipo be grateful that BOZ in able to reveal this INFO…… the question is where is the government taking this mula???

    Zambian living standards have been reduced to nothing over the years.

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