Zambia’s economy continues to register robust growth rates, averaging 7.8% per annum in real terms since 2005. This is according to the latest report on Zambia by rating agency Moody, quoting Matt Robinson, senior credit officer at Moody’s, the economic growth is expected to remain at around the same level in the coming years, supported by the development of infrastructure projects.
However, the rating agency warned of increased deficits and dependence on a single export commodity, copper.
“The government’s fiscal position is also strong, though deficits have increased and high dependence on a single export commodity, copper, leaves Zambia exposed to adverse price movements
Below is the full Report
Moody’s: Zambia’s credit rating balances growth prospects and a healthy government balance sheet against narrow economic base and institutional constraints
London, 09 December 2014 — Strong economic growth and robust government fiscal strength continue to support Zambia’s (B1 stable) credit profile, says Moody’s Investors Service in its annual Credit Analysis report, published today. However, the rating agency notes that the small size and relatively undiversified nature of Zambia’s economy mean that it is vulnerable to adverse conditions in the agriculture sector and volatility in global copper prices.
The rating agency’s report is an update to the markets and does not constitute a rating action.
“Zambia’s economy continues to register robust growth rates, averaging 7.8% per annum in real terms since 2005. We expect that economic growth will remain at around the same level in the coming years, supported by the development of infrastructure projects. The government’s fiscal position is also strong, though deficits have increased and high dependence on a single export commodity, copper, leaves Zambia exposed to adverse price movements,” says Matt Robinson, senior credit officer at Moody’s.
With nominal GDP estimated at $26.3 billion in 2014, Zambia’s economy is on par with the Sub-Saharan Africa median, but ranks below the median for B1-rated sovereigns globally, according to Moody’s. Zambia’s GDP was rebased to 2010 prices in February 2014, and preliminary estimates suggest that the economy is now 25% larger than previously thought.
Although high poverty levels, income inequality and limited economic diversification — with agriculture, forestry and fishing accounting for more than 70% of employment — continue to constrain Zambia’s credit quality, ongoing government efforts look to address the country’s infrastructure deficiencies. These include projects to develop connectivity, raise power output, and to improve productivity in the agriculture sector.
As a result, Moody’s expects that Zambia’s real economic growth will likely remain strong, rising above 7% in 2015, slightly higher than the government’s estimate for 2014 of more than 6.5%.
Copper production and related sectors contribute 25-30% to the country’s GDP and generate the majority of current account receipts. This leaves it exposed to adverse copper price movements and a slowdown in Chinese growth, as China accounts for the majority of copper exports, says Moody’s. In addition, facing growing pressure from the population for a greater share of mining sector wealth, the government’s approach and recent policy actions, such as a change in the mining tax regime, run the risk of deterring foreign investment.
Nonetheless, Zambia’s fiscal strength remains fairly high, supported by a balance sheet carrying a moderate level of public sector debt at around 32% of GDP. An expansionary fiscal policy since 2011 has put Zambia’s debt on a strong upward path, with a 6.7% of GDP deficit in 2013 sharply contrasting with the deficits of below 2% on average for most of the decade up to 2011, though the government has committed to slowing expenditure growth and the rise in the public debt burden.
According to Moody’s, so far, the government’s commitment to fiscal consolidation is holding. The fiscal performance through the first half of 2014 was roughly on par with budget, though the original deficit target of 5.2% of GDP has since been relaxed to 5.5% in the 2015 Budget delivered in October. But pressure on the fiscal position will continue amid growing demand for higher public sector wages and development expenditure, particularly in the areas of education, health and infrastructure. Beyond the immediate presidential by-election in January 2015, these pressures will undoubtedly be amplified in the lead up to national elections in 2016, says Moody’s.
The rating agency also notes that Zambia’s increasingly noisy political scene, which despite relative stability over the past five decades, presents rising risk to policy predictability, the investment climate, and FDI.
PF please stop dreaming. Your time has expired.
Give credit where it is due Mei Matumbo!
PF has nothing to do with rating agencies reports. Some of you should stop living in denial.. there are other thing to do in life than politics.. mukafwa na BP
@Mei ur the one dreaming! Moody’s is reality. They are not PF cadres. This shows that Zambia is in safe hands. But being a bitter UPND cadre, u will claim that they are frends to Guy Scott. That explains their postive attitude
The other side? tell em!. this thing of cartel that cartel this, bemba that , tonga this will not develop zambia.. start doing something for your country
Hahahahah! desperation by the pathetic fools! Who are you cheating? We are able to see, feel and experience the economic hardships as a result of poor governance. Stop comforting yourselves this time you wont ride on the ignorance of the Zambian people. The people are fed up period!
This analysis dates back to 2005 and can only mean that the leadership at that time set up a good strategy and foundation for the country’s economic growth. The PF picked up from where their predecessors left and this is their only saving grace, that the foundation was already laid. We do not want over dependency on a single commodity; we need to diversify into agriculture, tourism, etc. But how do we diversify into agriculture when farmers at the moment remain unpaid and lack support in terms on inputs?
@1.2 Other side:
We are not blind my friend. Moody looks at global numbers, nationally and not at the nit grit. Much of the wealth which good old Moody wants us to see in this report is concentrated in the pockets of a few PF politicians and cadres. Now 50 years after independence, an average Zambian still wallow in abject poverty, way below imaginably acceptable standards! For a country that has been so well endowed with an abundance of natural resources, that is UNACCEPTABLE. Moody may well have to concur with my sentiment here.
Moody’s analysis of the Zambian economy could be correct as a measure of how much ZRA is able to collect to boost governments’ coffers. PF collects enough money from various economic activities across the country but has failed to make sure that money benefits the majority poor.
Moody’s analysis has just confirmed what HH has always been saying that Zambia has enough resources to improve the lives of the majority poor through deliberate policies aimed at creating employment to empower the youth.
This reports vindicates most of us who have consistently said HH’s plans are deliverable because Zambia has enough money to fund HH ‘s plans if managed properly.
Unfortunately Zambians are not benefiting from all this economic growth because PF is busy stealing and sharing the…
What this article is telling us is that PF is busy stealing the money mean’t to pay the farmers, and students.
There is no any other plausible explanation as to why, PF is failing to honour its financial obligation on the back drop of this healthy financial status of the country as shown by moody’s.
When we tell you PF is a bunch of thieves you refuse to believe us.
When we tell you HH’s plans can be delivered, you say where will money come from? Well Moody’s has just confirmed that Zambia’s economy is generating enough money to implement HH ‘s plans without much borrowing at all.
This report is goooood news to HH and UPND. He will use it to tell the nation, what a sum PF is. He will explain why, we in UPND think PF is stealing huge amounts of money for themselves and…
Truth be told
To atribute this economic growth to PF would be a huge mistake, because the country is in auto pilot and has been in auto pilot since PF took over.
PF is taking advantage of this health growth to enrich its top officials as much as possible before its booted out.
PF has sponsored over 300 relatives of its top officials to study abroad on £15000 per year free education bursaries funded by GRZ, and yet a PF minion has the guts to lie that GRZ can not manage to offer free education. How bizarre!
Vote PF for further improved economic performance and national unity free of tribalism…
Vote HH and UPND for theft of public resources, underdevelopment, tribalism, disorganised planning and management…e.g Mazabuka, Choma and Kalomo all are the dirtiest towns in Zambia with no proper management in place they are case studies of the poor management styles of UPND and what you can expect if they God forbid win which God forbids them to both in 2015 and 2016…
****VIVA EDGAR LUNGU 2015****
WHAT HAS PF TO DO WITH CREDIT RATING. I WONDER WHY MOST ZAMBIANS IN THE US ARE SO DULL. DON’T JUST WORK IN PLANTATIONS WITHOUT READING NEWSPAPERS AND FINANCIAL PERIODICALS. HAVE A READING CULTURE AND UNDERSTAND WHAT RATING AGENTS DO AND WHO THEY ARE.
Excellent report, go PF! Teach the former plunderers and future wannabes a lesson on good economic management. Vote PF Jan 20!
Kudos
we are home and dry,,,dont even worry yourself
Watch out for Mongu Town on Saturday….Liyambai hotel fully booked and most of the small lodges
2015 vote PF (Edgar)
I thank you
With proper management Zambia is in a better position to register better growth which is able to touch the common man on the streets and villages. At the moment this growth is only for the people with correct standing with the ruling class
Kudos, Gen………
Thank you for your fair comments. That is how it should be rather than insulting and threatening HH, a fellow Zambian. You also ought to appreciate that HH is one powerful business person who has been contributing to Zambia’s economic performance through his businesses.
Please, continue to campaign normally. Zambians can still vote for the party you support without the hate speech you have used in the past.
Obviously the so-called economic manager at UPND and his minions will not be happy with this update from Moody’s!
In 2011 we had the same good news by these agencies which the MMD (RB) used for campaigning but it never worked. This means nothing to the common man, the unemployed youth and the farmers waiting for their money
The fever is already catching-up with PF. They are beginning to get desperate. Please, don’t start telling us fiction. We know better.
When did UPND cadres become this dull? What happened? Moody’s is NOT an economics department at PF’s Matero University. This is a reputable international rating agency. Sometimes try to google before you embarass your party in your deperation to get to State House
I wonder who lied to you that to get to State House, you have to behave the way PF cadres behaved in 2008..as illiterate I D I O T S
@4.1 MMD Chief Bootlicker:
Chief Bootlicker, I can see that PF have just hijacked you from MMD. Welcome to the world of the disillusioned.
For your information, Moody looks at global numbers, nationally and not at the nit grit. Much of the wealth reflected in this Moody report is concentrated in the pockets of a few PF politicians and cadres. Now 50 years after independence, an average Zambian still wallow in abject poverty, way below imaginably acceptable standards! For a country that has been so well endowed with an abundance of natural resources, that is UNACCEPTABLE.
Check your statistics on the disparity of wealth distribution in Zambia and you will begin to shed tears. I trust you love Zambia, and not just your individual pocket. PF only care about their pockets.
Well, lets give credit where it is due. Looks like one Michael Sata was a genenuis after all and three years on and the economy is holding up and looks to be in pretty good shape. Well done PF. As I have always said in the past, the numbers don’t lie and I think you have scored here, keep it and push the growth to 10% so the effects can be felt among the common people.
Good job and keep it up
PS: Please UPND cadres, Moody’s is NOT an Econimics Department from PF’s Matero University or their sister school of economics at Kulima Tower. This is an International rating Agency we are talking about. Please, sober up and behave as educated as you claim to be. This is not about politics , but about our country.
ikali iyo ba chief bootlicker! twaitemwa!
Statistics don’t lie, but you must interpret them correctly. These statistics are meaningless to the majority of poor Zambians. You are being very simplistic in your interpretation of what Moody’s are saying! Just try to relate these statistics to what is obtaining on the ground. Pick any township and you will realize we have a lot of work to do. When you imagine that the key players in the PF team are Edgar Lungu, Kambwili, Yaluma, Chenda, Mukanga, Given Lubinda, etc, in all honesty, the load of turning Zambia around is beyond their capabilities. One of them got a first degree recently from a University in Nkana West.
MMD Chief Bootlicker, all this is not surprising as the PF merely continued with the MMD policies. And unfortunately as in the MMD days the beneficiaries remain the big international corporates in the copper business. And now I guess the PF insiders from road/ infrastructure projects.
It’s really sad that PF choose not to focus on helping small farmers, a certainty to alleviating poverty. Instead they removed the subsidies and diverted funds meant to pay farmers by FRA. And there may be some truth in the fact that FRA does pay the transporters because they are connected.
Perhaps this is one priority for HH. PF have not said anything on it yet. RB was a bit on cue, but does State House have to continue to be a one patient hospice?
It seems the so called bootlicker has lost direction together with his party going into oblivion. Who says everyone not agreeing with this rating agency is supporting UPND! Oh maybe the heat coming from UPND is too much to bear hence the reaction. I thought you read all of this report but it seems you just jumped into commenting. Is not that transition operation catering beyond the PF regime alone with more of the MMD period. Stop beating the bush Know you are no longer MMD so change your name to Chief PFbootlicker. Oh i cant say much your name sums it all afterall its all about bootlicking. who knows how many booties you have licked.
Take it with a pinch of salt. Umusungu na ishiba epo eminine.
Dante Saunders has conceded defeat already!
2015 vote PF(Edgar)
I thank you
These statistics are meaningless to the more than 80% of Zambians living in abject poverty and who cannot find jobs. The IMF and the World Bank know this basic fact. Zambia needs to record double digit GDP growth rates consistently for 10 years to address poverty. Anyone, including Moody’s, who wants evidence of high poverty levels in Zambia just needs to pick any township at random and they will be amazed at the high poverty levels. The PF with their policy inconsistencies, quarrels, confusion, hooliganism, etc, do not have ability to deliver double digit growth rates that can reduce poverty. PF KU YA BEBELE!
Excellent free material for pro-PF bloggers. Used wisely this could raise the quality of discussion concerning presidential elections.
Well done pf,atleast we on track
The developed world have endorsed Edgar Lungu and PF.
“Zambia’s economy continues to register robust growth rates, averaging 7.8% per annum in real terms…..the economic growth is expected to remain at around the same level in the coming years, supported by the development of infrastructure projects.
Ma mama its all over for UPND!!!!
Meaningless stats. It’s not like Zambia will soon be hopping into G20 or even BRICS category any time soon. Why do we need to be fed with such statistics? ‘IN REAL TERMS’, ha, ha, ha; what is the rate of inflation in Zambia and what are the interest rates like? Why can’t we just get on with it. Stop thugs and thieves getting in positions of authority, get most of our technocrats back home to steer our great land forward, put systems in place that will stand the test of time by first changing our mentalities etc. I don’t care if it’s Moody, Morgan Stanley, FT or whoever tells Zambia how well they are doing.
Corruptionin in Zambia and now PF have even extended it to International organisation!!! hahah!!!! How on earth can moody measure Zambia’s economic factors when things are so bad. You don’t need university to see this!! Patriotic Fools (PF)
Zambians need to stop relying on economic ratings from Moody’s & co. and start believing more in themselves. We do not need to be told like kids everytime because we all know what we are able to achieve and what needs to be done to keep our economy strong. Basically, we need to regain full control over our resources (especially the mines), grow domestic industries and create our own markets with innovative and internationally marketable products “Made in Zambia”.
If any government is resolute enough to remain on this path, support and uphold these goals, I have no doubt that everything else will fall in place and we will rise our country to the top of the world.
@4.1 MMD Chief Bootlicker:
Chief Bootlicker, you are deluded. Moody looks at global numbers, nationally and not at the nit grit. Much of the wealth reflected in this Moody report is concentrated in the pockets of a few PF politicians and cadres. Now 50 years after independence, an average Zambian still wallow in abject poverty, way below imaginably acceptable standards! For a country that has been so well endowed with an abundance of natural resources, that is UNACCEPTABLE.
Check your statistics on the disparity of wealth distribution in Zambia and you will begin to shed tears. I trust you love Zambia, and not just your individual pocket. PF only care about their pockets. You like eating alone. That is your problem. Learn to share the national wealth.
Show me the money.
This isn’t good news to celebrate. It’s actually bad news. The whole economy is propelled and fueled by a single commodity, copper. The ideal situation is where all sectors are major contributors to growth, not just one. It’s like a family of 50 depending on only one bread winner. If she/he dies suddenly, retrenched, demoted or retired that will be end of that economy. That’s what it means in Zambia’s case, any depression on copper prices would instantly catapult the nation into poverty.
One only needs to cross over to Botswana or Namibia, two of Zambia’s neighboring countries, to see what unselfish leadership can do for the citizens of its country. In the context of the Human Development Index, even natural resources stripped Malawi far beats Zambia. As late as 1975 Botswana was still one of the poorest in Africa and in the world. You should go there today and see for yourself what has happened since. Zambians on the other hand, are worse-off today than they were back in 1964.
It surprises me that PF still have a face to show! After all that display of their gross incompetence and shameful tribalism which they practiced in broad day light? They are out there again, canvassing for fresh votes from the very Zambians they have been discriminating against!
BP will kill you, sober up.
@18.1 IYE:
I am more worried about you.
Again this is good for the pro PF, building on a good foundation from the MMD (or MMD’s foundation was resilient to enough to mitigate the PF era/error).
A foundation which a good management team can build on.
Didn’t know chaps in UPND were so dull! Why comment on the obvious? The world is saying PF has done so well and its candidate Edgar Lungu is winning without doubt, that’s the message in summary.
Viva Lungu
UPND is same as Liverpool. Too much noise and no results!!
Premium League
I agree with you…..
2015 vote PF(Edgar)
i thank you
For those defending PF’s “noble” record, please give me a good reason why pastoral farmers in Eastern, Southern and Western provinces are still among the poorest Zambians? Batswanas are largely pastoral. In Botswana pastoral farming translates into wealth while in Zambia it translates into poverty. Why?
Here is why – government policy. Zambia has maintained an active policy to keep pastoral farmers poor while Botswana has an active policy that supports pastoral farmers, irrespective of where they may be located in that country. At one time, foot and mouth disease nearly wiped out cattle in Zambia’s southern province. Such a catastrophe is yet to occur in Zimbabwe or Botswana. How much does PF care, if not just for more money in their pockets?
Leave these hyenas cheating themselves on the blog and lets go & do what we know best, scoring by showing people what PF has done for them. That’s what matters
Ni pa bwatooooooooo
Irony is why these applauded annual GDP growth rates does not result in reduction in demand-deficit unemployment. Question is what then is the essence of economic activity which is said to expand without a corresponding increase in wealth or reduction in abject poverty?
Bootlicker always seems to seek attention! Moodys and S & P ranked Spain and Greece AAA+ just BEFORE the financial crisis! Why?
Metrics-of-interest bwana…there is only ONE INDEX that is fair worldwide – HOW ABJECTLY ORDINARY citizens LIVE ! The last time I saw a semblance of economic movement in Zambia I was a pupil and KK was off-loading the family-silver on us and bakwao…before u knew it EVERYBODY APART FROM POLITICIANS was wallowing in poverty! Man of action came as LSK DG and all ululated; he started his quest for power! Today he’s gone and the megamess is rife, but still SOME see so-called CONTINUITY as a solution! Dear God, let my brethren go, drive the devil into obscurity !!
Flight HH2015, salvation – IF U WILL BRETHREN 🙂
Quite a masterpiece. Thanks.
On the balance of such positive economic assessments should be reality. No disrespect to economic indicators the Zambian situation is not all great in reality. This is pretty much like praising a child who is self harming at home in their bedroom on how well they are doing well ‘in their life in general’. Political events of the last few months will definitely have not had positive economic consequences which are clearly not factored into all this praise. MUSHOTA, BB2014, CIMA, PhD candidate, etc. would definitely have more to say here. MUSHOTA this is your moment let’s hear your expert opinion.
Is it the same Moodys that said AIG and other companies credit rating where good prior to the Global crisis hahahaha ive lost trust in them lairs.
Economic statistics can be good but do the social statistics i.e, poverty levels, school attendance, prices of food, transport etc reflect the same good picture?
What about governance issues, corruption levels, police brutality, refusal by government to give Zambians a new constitution, intra-party conflict, and general thuggery behaviour by party cadres, barring the opposition from campaigning during previous by-elections deliberately misinterpreting the public order act?
For your information, this site and others are not only for political party supporters and cadres. Non-partisans can also comment just as they also vote. Your careless comments regarding other parties and leaders can cost you supporters from those on the fence (undecided voters – and they are many, I can assure…
This is definitely the last nail in UPND’s coffin. .
Hard luck HH….there’s always next time…but this time is for Hon Edgar C Lungu
2015 vote PF ( Edgar )
I thank you
Some bloggers believe that online media is only for party cadres. Many Zambians who do not belong to any political party also read your comments and make judgements on your parties. Your can either attract or chase potential supporters for your parties. E.g the language used by Kudos and Gen. against HH made some of us symphathise with HH and UPND. Undecided voters tend to vote for the humble out of symphathy since they do not have a party to support per se. I also believe that the behaviours of Dora Siliya, Mulongoti, Winter Kabimba, may have cost their respective parties some votes during past elections. RB’s recent ousting of Nevers will certainly cost MMD votes. Careless statements by some former UPND members have left a stigma on that party. Mind your language, please.
Kwena uwalembele this article ni kabova sana. Lishilu lyakumyando.He was dreaming about abouy country,don’t worry guys.
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