President Lungu with Ms Ina Marlene Ruthenberg World Bank country Representative - Picture By Eddie Mwanaleza-Statehouse.
President Lungu with Ms Ina Marlene Ruthenberg World Bank country Representative – Picture By Eddie Mwanaleza-Statehouse.

The World Bank has advised the Zambian Government to remove subsidies as a measure towards making every Zambia count following the current economic slowdown.

This is contained in the seventh World Bank Zambia Economic Brief titled: Beating the slowdown: Making every kwacha count, released yesterday.
The report states that making every kwacha count should include the removal of fuel subsidies and moves to improve the financial sustainability of the power sector.

World Bank Country Manager for Zambia Ina-Marlene Ruthenberg said international experience demonstrates that such measures are best complemented by scaling-up cash transfer programs, both in terms of the amount household’s receive and the number of vulnerable households benefiting to protect the vulnerable during any transition.

Ms. Ruthenberg observed that although Zambia is facing tough conditions for growth, investment in mineral and non-mineral sectors in the country remains attractive.

“Zambia, like many other African countries, is facing external headwinds while domestic pressures have intensified. The external headwinds include slower regional and global growth and lower copper prices. Domestic pressures include a power crisis impacting on all sectors of the economy and repeat fiscal deficits that have made achieving macroeconomic stability harder,” the report said.

The report observes that GDP growth is forecast to remain close to 3.0 percent in 2016, assuming new power generation capacity comes on line and a better harvest is achieved.

The report says the medium-term horizon for the economy looks brighter and growth of the economy is forecast to improve in 2017 to 4.2 percent and again in 2018 to 5.0 percent.

“The outlook for the Zambian economy is underpinned by an assumption that copper prices remain soft throughout 2016 and 2017. However, if global copper supply better matches demand, and prices recover once again, improved growth could be achieved.”

It added, “The return to faster growth requires that uncertainty about whether persistent and growing fiscal deficits can be reined in is met with clear and credible budget policies toward a more sustainable fiscal stance.”

And World Bank Senior Economist Gregory Smith said the changes in the global conditions for growth require that countries in the region ensure any under-utilized resources are re-allocated to where they can have greater impact.

“There is a need to carefully look at the efficiency and effectiveness of public expenditure, and ensure that every kwacha counts,” he added.
The report observes that commodity price shock highlights the need for Zambia to reduce its dependence on copper.

It says the Seventh National Development Plan provides a good opportunity to set this agenda and set a path to clear impediments to private sector activity and improving the business environment.

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36 COMMENTS

    • The world bank maybe wrong! The subsidies which lungu has maintained to date are beer subsidies ,… that I know for sure, he is my friend

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    • Ms Ina Marlene Ruthenberg must be traumatised with Lungu’s level of ignorance….and Question….bushe imwe mwaba mupepi na ba Lungu, balileka ukufuma amate pakulanda?…I am scared for all those people around him….balasamba bonse!!

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    • If Chakolwa wins the August elections then expect a 1980s Zambia that would be a slave of the World Bank. PF have ruined the economy to the extent of being bullied around by threse institutions. Chakolwa has lost it. He just has to do as told by his masters.

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    • Which subsidies? Does this felle from the World Bank know that fuel in Zambia is already expensive with anyone pretending to be an intelligent economist to tell us stupid things.
      Ndobo get serious for once.
      Buck Teeth ever stupid comments

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  1. This is like speaking Greek to a man like Lazy Bum Lungu, him he just wants WB to tell him where to sign for a loan.

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  2. This is like speaking Greek to a man like Lazy Bum Lungu and his empty tins, him he just wants WB to tell him where to sign for a loan.

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  3. Interesting….so govt shud allow The Post to continue operating minus paying taxes. Meanwhile got shud make every kwacha count?

    Jay Jay..why is it tongas and UPND supporters are always bitters???

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  4. Even in western counteies the have subsidies, unemployment benefits and many other pay outs.
    Only a strong government can resist such. Be assured that should Lungu rig and win these elections, he will be forced to increase fuel prices, electricity, water and many other levies and fees. Thats when Zambians will realise what a conman we have as a leader. There will be no so-called infrastructure development as the money has finished and world bank cannot give money only to be given to Chinese contractors

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    • @Joseph, it is like a chicken-egg story that; in the countries where subsidies subsist they do not get aid from some place else to support their shortfall in their national budgets. They are ruthless in their tax collection and do not even allow anyone to interfere in their management of tax laws and regulations. They are efficient enough to create surplus to support your sorry-ar.sed deficit-ridden budget making process.

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  5. This is what Lungu and PF have already put in their manifesto. To unbundle ZESCO and gradually introduce cost reflective tariffs so that there is more investment in the power sector! At least PF has been open about this one rather than those who want to “invite friends to come and build power stations” without explaining how businessmen can all of sudden come to invest without changing pricing levels for electricity. Though not communicated by government, one would see that fuel subsidies were re-introduced keep down prices due to the depreciation of the currency. Removing that can only worsen the hardships people are facing but going by logic that can be done gradually and believing that they procured fuel at cheaper price from S.Arabia should help.

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  6. That’s why we need crooked Mmembe to pay taxes so that the government can account for every kwacha.

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  7. World Bank is saying we remove subsides and HH is saying the opposite that he will introduce free fertiliser, free education… What a load of used toilet paper.

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  8. In fact Zambia has the lowest fuel price in the region hence the rampant smuggling of the commodity

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  9. With elections and the attendant huge govt expenditures means that the Fiscal Deficits have sharply increased raising serious financing problems. The other day Lungu was saying that the Zambian economy is in good shape and does not fixing. He was wrong and soon after elections are over the new govt will need to fix the economy. To do so the new govt will require huge foreign financing. For this reason it is pertinent that Zambia holds free,fair and credible elections on 11th August 2016. An illegitimate govt in Zambia will fail to attract multi-lateral and bilateral funding and grants from Donor Aid Agencies. Lungu should be aware that blatant rigging of the upcoming elections have serious consequences. Even the IMF which had promised to help could stay away from Zambia if elections…

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  10. We advised this 2016 most incompetent and idi0tic president of the millennium Edgar chakolwa Kaloba vodka Wrungu to stop borrowing unnecessary but he didn’t listen because he was only interested in filling his own pockets now our economy will be controlled by World bank.

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  11. LUNGU IS NOT STUPID TO INCREASE JUST. BEFORE ELECTIONS.
    MMEMBE SHOULD PAY TAXES TO STRENGTHEN KWACHA. QQ1

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  12. In 2011 you unwisely elected PF neanderthals to run the economy and what followed was fuel scarcity,kwacha depreciation,Fitch downgrades ,poor 3.5% growth,inflation rose ,power generation went down,mines closed,export revenues dropped and and our record forex plus bumper harvests went south.

    If all that reads like Zambia is on life support then think again this coming elections…poverty is afterall a choice and you chose that unwise path in 2011.Make a change-vote with your heads this time.

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  13. Now Mr World Bank, don’t get me confused. Every kwacha counts? I thought that I understood at least a bit of economics. So you are saying that Mmembe should pay every single kwacha of his taxes?

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  14. World bank, that is very thoughtfull of you guys. So now do you want to help us educate the US and the EU then? And Mmembe& HH.

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  15. @16 Mzambia wa zamani, reading your first paragraph I think it is you who should change and start thinking with your head. Have you read the analysis by the world bank? The impact of external shocks? The copper prices? The low water levels for power generation? Especially the positive outlook for the economy? We have been through this before such that even HH now acknowledges all the problems.

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    • We are broke and the economy is on its knees because Chakolwa stole all the money. That’s why he is rich and we are broke. He is even hiding his whorehouses under Ndozo lodge. Let Chakolwa pay out of his pocket the fuel subsidies that the World Bank want to introduce.

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  16. Free education from Primary to Tertiary and 8 bags of fertilizer involve huge subsidies in addition to fuel subsidies already in place. With such statements from those who give us the money, the World Bank, just how credible is Hbufi Hbufi’s promises. BUBELA!

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  17. Taking advice on debt from the World Bank is like taking advice from wino on sobriety. The WB/IMF should be prosecuted under the RICO act. They have massive conflicts of interest.

    First of all, they loaded up the country with debt. They never objected to the Eurobonds. Now they say that peopl in Zambia are getting too much money from their government. Let’s reduce subsidies on fuel, and later fertilizer, food prices, etc. What follows is a hugely affected standard of living, which leads to what former WB Chief Economist called the IMF Riots. Or create the MDC in the case of Zimbabwe.

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  18. That won’t happen in the midst of elections!! WB are very foolish. They want us to lose elections to Hichilema their preferred candidate by release such information or advise? Very stupid!!

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  19. YES World Bank,claim your money you gave these fools tool.50/50.Lets wait for more companies and countries to claim there money from this PF government too.Closing the post is self murder.Tailayamba bola bane,wait,more and more foreign companies will come on board to claim there dues also,just like PF is doing.I dint smile when they closed the post,Now i can relax and smile-hehehehehhehehe.We were born winners!

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  20. why is world bank and IMF so interested in Zambia. they led greece into the mess it is in today they want to come and control us. mwansawasa put these guys in their right place but they have now seen an opportunity to sell our Zesco for a song all because of the happy to get loans and build unplanned roads by this economically clueless PF gang led by ECL, who will be hurt the most from the removal of subsidies honestly is it not the poor Zambian who gets on a bus with fates already already at k5. the people people are been mocked day in and out by conductors cause they always want to negotiate that they have a short fall before boarding a bus. ECL have a backbone and do the right thing for once, we all know the bulk of the 23 million you hav today came from the road constructions.

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  21. Wait a minute, I thought we were promised cheap fuel by end of June. A lot of noise was made about it by chief poor failures vuvuzelas. The economy really needs fixing, although ostrich thinking we bury our heads in sand hoping nature will take care of all and sundry.

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