President Lungu with Vice President Mrs Inonge Wina at KK international airport left
President Lungu with Vice President Mrs Inonge Wina at KK international airport left

WHEN MR. HICHILEMA WAS HAPPY WITH NUMBERS

Almost everywhere, ruling Governments often face towering criticism about the governance of their countries and economies. Nowhere are they left scot free. When they try to list some achievements, they are told that people cannot eat numbers which they use to back their achievements. Of course, numbers do not feed anyone. Economists invest their claims of economic achievements in numbers and we always criticize them arguing that low inflation or macro-economic stability is not enough to feed the Zambian family. But numbers help us to say and understand many things. They provide useful indications of performance which, sustained over many years can lead to better things. That is why numbers are useful and cannot be ignored or belittled simply for that sake. But they can upset of make you happy. When we use them against other people, we are happy, and they are unhappy and vice versa. When Mr. Hichilema, leader of UPND stated the other day, “I have been vindicated by IMF on Zambia’s debt,” and that he had been advising Government against excessive borrowing, he was referring to numbers. On 26 February 2016 Mr. Hichilema was happy to also state, “With figures for February showing a further rise in prices and inflation at 22.9% – the highest level since 2000 – here is a reminder of our statement from earlier in the year on ‘Combatting High Inflation – The UPND Way’. The rate of inflation has risen from around 7% when President Lungu’s was elected to 21.1%. A rate we have not seen in Zambia for more than 10 years.”

If we want others to hear our numbers, we must also hear their numbers. Even we author of articles that sometimes criticize the ruling Government have a governance obligation to recognize and show numbers that show achievement even if they will not feed anyone but are pointing in the right direction. And it is high time we heard the ruling Government’s numbers, not from them but from us.

REMARKABLE ACHIEVEMENTS BY GOVERNMENT SHOULD MAKE HIM HAPPY

In this article, we look at only three numbers or statistics to show trends in growth of (i) Zambia’s GDP; (ii) of Gross Capital Formation and (iii) Zambia’s international trade in goods and services to illustrate remarkable achievements of the ruling Government, which no one wants to show to the people of Zambia yet, they deserve to know even if numbers cannot feed them.

Before doing so, let us be reminded that inflation that Mr. Hichilema refers to is a subset of the bigger economic picture. When it is as low as zero, we all must celebrate because it provides a good basis for economic development although on its own it is not development. When it was 22.9% as stated by Mr. Hichilema above, of course that was not good and we all must have been worried. But there are better economic pictures illustrated by numbers too, that must be disseminated just as when they are bad, we will also disseminate them.

Number one, Growth Trend of Zambia’s GDP

It is 50 years since Zambia obtained independence. In this period, the country has been ruled by different political parties. If we wish to track their economic performance, we can even if statistics may not exactly tell the story, given that there are other factors to consider. During the period 1970 to 2005 or about three decades, Zambia’s gross domestic product (GDP) grew steadily, from about $1.5 billion in 1970 to $8.3 billion in 2005. But compared to the short period between 2011 and 2015 as Figure 1 below shows, this growth of 34 years was not phenomenally significant. It is the last five to six years that growth surged to unprecedented heights, reaching the highest mark of $12.7 billion in 2006 and $21.2 billion in 2015. I don’t have figures for 2016 but if this past five year-trend continues uninterrupted, this growth trend is likely to be a boon in the next twenty years. Ladies and gentlemen, bad guys and girls can say what they want. And they may be right because, again, numbers alone do not feed anyone. But they provide a basis, and this number does provide a strong basis for optimism, again, if things are done well. According to the image below, the growth that you see in the first 34 years was flat and timid wavering below $5.0 billion for so many years. Of course, we cannot ignore previous Government’s contribution. But more importantly, why would we ignore the ruling Government’s such huge contribution when the surging statistics clearly stand in the period during which they are presiding?

I don’t know where the communications department of the ruling Government is located but I hear it is in the Ministry of Information. If it is not communicating these numbers to the public and political foes. Again, numbers alone do not feed Zambians, but you can’t fight them either.

Number two, Growth Trend of Zambia’s Gross fixed capital formation

Economists and financial experts will know better how the Gross fixed capital formation functions and why its growth is important to the Zambian economy. But it simply “refers to the net increase in physical assets (investment minus disposals) within the measurement period (Financial Times).” Experts would argue that Zambia needs capital goods and to replace current assets to expand the economy that are used to produce goods and services. When this is done on a large scale and capital formation is higher, it means the economy can growth fast and better. Countries need capital goods to replace the current assets that are used to produce goods and services, and if a country cannot replace capital goods, production declines. Generally, the higher the capital formation of an economy, the faster an economy can grow its aggregate income. All this requires continuous growing savings and investments which, for Zambia are quite low in comparative terms with other countries. For example, Table 1 below shows Zambia’s gross fixed capital formation in comparison with Asian countries. You can see that Viet Nam’s is about fivefold higher than Zambia’s. Indonesia’s $286 billion is the highest in the Table. To grow substantially, Zambia needs to expand its investment.

Table 1: Gross Fixed Capital Formation in $ Millions

2015
         Indonesia 286,045
         Viet Nam 47,645
         Zambia 9,118

Source: Unctadstat

However, despite its small size, the speed and size, in the Zambian context at which gross fixed capital formation has grown, again in the last six years, all connected with the GDP is quite commendable in comparison with previous leaderships. Again, unlike the issue of inflation, there has been a sudden surge of growth of gross fixed capital formation, rising from $234 million in 1970 to $2.9 billion in 2006 and then $ 9.1 billion in 2015 (Figure 2). Again, in terms of size, this is only $9 billion hence not much to write home about. However, judging by the significant size compared to the last 40 years, this growth of the last 5 to 6 years is unprecedented. This growth is also characterized by the upward trend despite external vulnerabilities.

Number 3, and finally, there is remarkable performance in international trade in goods and services

Finally, the graph below shows similar pattern of remarkable international trade performance during the period of the PF Government between 2011 and 2015. You can argue what you want, that they are a reflection of the past leadership, that growth takes long and we cannot make judgement now. But, again, the highest growth shown in the image below in Figure 3 is concentrated in the period of the PF rule. And, in comparison to years before, surely, it is much higher, leapfrogging from about $10.2 billion in 2011 to $12.3 billion in 2013 and 2014. Of course the external factors on copper exports in the last four years also explains why this massive growth started taking the downward turn. The message is to ensure that the 2013 or highest growth period should come back and if this growth can continue in the next twenty years, Zambia will get into the development path. The point is that you cannot grow a country by images shown between 1970 and 2006 when exports and imports are so low.

CONCLUSION

In conclusion, we cannot eat numbers. But they have a special message to deliver. And if we have used them before to make a point on others, we must also listen when others come back with them to explain their achievements. Sometimes they look small but when compared with others, they certainly send a strong message. Finally, improved numbers do not mean that the ruling Government now sits and does nothing. It must do more for that is what it was elected for. As said earlier, although some numbers like ones in the foregoing look good, we cannot eat them. We need a strong translation of numbers into three meals a day for each family. But good numbers should also not provide a tool for showboating or telling off opponents. No. But they should perform the purpose for which they were invented.

By Economic.Governance

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63 COMMENTS

    • The Devil you know, is BETTER than the one you DONT

      I like HH and someone OUGHT to tell me one one damn REASON why he would be better than LUNGU

      Who else if it is NOT lungu

      Nam names

      If not we stick to the Devil we know

      Men lie, Women lie, NUMBERS dont lie – PF have been AWESOME for all of us
      Which REGIME was better than this – NONE

      We stick to this PF Regime

      They say if it aint broke, dont fix it

      I have a PhD

      Thanks

      BB2014,2016

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    • All those statistics are useless look at this and you will see how backward Zambia has become… reflected in the quality of comments on this site

      Country Literacy Rate
      1.
      Zimbabwe 90.70
      2.
      Equatorial Guinea 87.00
      3.
      South Africa 86.40
      4.
      Kenya 85.10
      5.
      Namibia 85.00
      6.
      Sao Tome and Principe 84.90
      7.
      Lesotho 84.80
      8.
      Mauritius 84.40
      9.
      Congo, Republic of the 83.80
      10.
      Libya 82.60
      11.
      Swaziland 81.60
      12.
      Botswana 81.20
      13.
      Zambia 80.60

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    • Literacy can be defined as the ability to read and write at a specified age (15 and above), the following is the list of African countries basing on literacy rate and their ranking order.

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    • how come figure 3 only goes up to 2014? this is trecherous.

      comment approved by:
      ZEUS AND HERA.

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    • Zambia universities rankings in Zambia, Africa and the world: UNZA is 2,630
      Ranking in Zambia Africa Rankings University
      2 239 Copperbelt University
      3 436 University of Lusaka
      4 504 Zambian Open University
      5 523 Mulungushi University

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    • Zambia universities rankings in Zambia, Africa and the world:
      Ranking in Zambia Africa Rankings University

      1. 630 UNZA
      2. 239 Copperbelt University
      3. 436 University of Lusaka
      4. 504 Zambian Open University
      5. 523 Mulungushi University

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    • Zambia has now been ranked 145 out of 178 countries in the world as one of the worst places to be a mother, according to the 2016 report published by Save the Children, an international Non-governmental organization concerned with welfare of children.

      With that ranking, Zambia is even worse than economically ravaged Zimbabwe that is ranked 141 while formerly war torn countries like Rwanda is ranked far better than Zambia at 121.

      At the ranking of 145, Zambia is probably the only country in that category but that has never been in civil war and only beats war torn Afghanistan by one place which is ranked 146.

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    • World Health Organization Ranking; The World’s Health Systems:

      166 Congo
      167 North Korea
      168 Namibia
      169 Botswana
      170 Niger
      171 Equatorial Guinea
      172 Rwanda
      173 Afghanistan
      174 Cambodia
      175 South Africa
      176 Guinea-Bissau
      177 Swaziland
      178 Chad
      179 Somalia
      180 Ethiopia
      181 Angola
      182 Zambia
      183 Lesotho
      184 Mozambique
      185 Malawi
      186 Liberia
      187 Nigeria
      188 Democratic Republic of the Congo
      189 Central African Republic
      190 Myanmar

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    • It is very clear from the data that sharp growth started under Mwanawasa economic reforms and started declining after the PF came into Power and have continued declining past 2014 where your data capture seems to end. So in actual sense this long article is confirming what HH and the other opposition have been saying. Thanks I dont have a PHD but I can SEE and FEEL.

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    • I am amazed that even with some people claiming PHD they cannot see that all the data presented confirm that MMD under Mwanawasa the policy reforms brought about sharp economic improvements as the your own data shows from 2002 – 2006 and we can comfortably say same policies continued driving the economy under RB. But you will notice from the very data provided that post 2011 you witness indicators stagnate and start dropping most of the data ends in 2014. We all know where we are now GDP in the 3%, High debt stress, barely no reserves. I DONT FOR THE LOVE OF ZAMBIA EVEN UNDERSTAND the WRITERS Motive to give PF a pat on the BACK when his own Data is pointing to the CONTRARY. I do not wish to use abusive language on the Forum but this is spitting in the Faces of People who can read and…

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    • Comments hereon that Believe and support that PF deserve a Pat on the back …. SHOCK me …. Really people even when the very data provided by the author points to the contrary. This is the case of the “Kings new clothes” You are the very people that congratulate the King of his nice clothes while in fact he is wearing None ….. SHAME! and you really want Zambia to Get somewhere ????

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    • Where is the graph on National Debt & the one for reserves?

      1. From ZERO ($0.00) debt in 2011 to $23-BILLION Debt.

      2. (wwwDOTbozDOTzm/statistics3.htm) – Total external debt service as % of Exports = from 3% to 4% before Lungu’s PF to 92.7% in 2016!!!!!!!!

      3. From $3 Billion reserves left by Mwanawasa to begging $1.3 Billion from IMF in 6 years of PF Govt.

      4. From Exchange rate of $1=K5000 when PF came into power to exchange Rate of $1=K10,000 today

      5. From 2 meals a Day to 2 days=1-meal

      Some people have no shame!!

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    • @Shameless your basis of analysis is myopic, what capital growth was there under Mwanawasa (or Rupiah) and do you really understand what is meant by GDP? Simply put, there is more economic activity under the PF government than before and this is the path we need to take if we are to bring meaningful development in the country.

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    • BUT THE TRENDS BEGAN BEFORE 2011, WHEN PF CAME INTO POWER.
      ONE CAN ARGUE THAT IT IS THE MMD THAT LAID THE FERTILE GROUND THROUGH ITS LIBERALISING OF THE ECONOMY AWAY FROM THE DEBILITATING UNIP SOCIALIST POLICIES. PF CONTINUED WITH THE MMD POLICIES. (OFCOURSE THIS WAS THE PRE-NEVERS MMD)

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    • “It is the last five to six years that growth surged to unprecedented heights, reaching the highest mark of $12.7 billion in 2006 and $21.2 billion in 2015.” How much is from copper and how much comes back.

      If we have all this money, why is the IMF saying we are useless.

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  1. Men lie, Women lie, NUMBERS dont lie – PF have been AWESOME for all of us
    Which REGIME was better than this – NONE

    We stick to this PF Regime

    They say if it aint broke, dont fix it

    I have a PhD

    Thanks

    BB2014,2016

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    • any good machine needs servicing, a good fixing is needed to maintain its peak performance.

      politically zambia needs new spare a new engine.

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    • ECL REMAINS THE MOST CREDIBLE OF ALL THE CURRENT ASPIRING 2021 PRESIDENTIAL CANDIDATES.
      THE ZAMBIAN ECONOMY HAS IMPROVED UNDER MMD AND NOW PF.
      OFCOURSE THERE ARE A MYRIAD PROBLEMS
      HH AND HIS TRIBALISTIC PARTY WOULD DESTROY

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  2. instead of cyber attacking him,hiding behind a keyboard why not set a dinner date with him on deadNBC and talk man to man.

    and only an i dyot would stick to a devil they know when you can look for an angel.as long as this word angel exist ,there are angels out there,no need to punish yourself ati shipikisha club,move out leave the devil and find someone angelic.

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  3. O dear, another smoke-Screen Analysis – econometrics is not political Food awisi, just Food-for-thought; Merkels’ metrics in Germany have the Brexiters, the EU and Donny the Tramp reeling…yet she’s lost it ! The car-industry is bleeding after diesel-gate, with stalwart Schäuble gone and an AfD rise there is storms on the horizon in post brexit-UK and EU and of course Donny’s cuckooland is going to hola-up !! One fact you have in this article: FOLKS DON’T EAT STATS !!

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  4. The analysis is good but you have to take into account the years of focus. Zambia’s challenges has been 2015, 2016 of which you have avoided. Show us for these years then we will conclude that we are on the right direction or we are reversing the trend

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  5. Economic Governance you are spot on.This article is a bitter pill to swallow to UPND who don’t want anything positive to happen to this economy as this will push them away from the state house, all that they want is bad things to befall this country for them to score some cheap political mileage, no wonder they are labeled ANTI-ZAMBIA. But well meaning Zambians, regardless of their political affiliation, do give the government credit where it is due and criticize the same government constructively. Unfortunately our hopeless opposition, UPND in particular, is good at negative criticism, character assassination and insults without offering solutions to the government. With this kind of behavior, they will just rot in the opposition, they will NEVER rule.

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    • The first MMD government is the one which boldly laying the foundation for economic rehabilitation, not fat john.fat john just found the things in place, kaunda destroyed from 1965 to 1991.The only development rupiya banda left was the easing of tension fat john created with hateful cohorts in form of fighting corruption, which was selective and institutionalising of nepotism

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    • Very true, Roka. These people want to make it look like Mwanawasa is the olny one who worked. That foundation for economic rehabilitation with high copper prices is what really boosted Levy. Aboutthe task force, you are spot on!!

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  6. Yes there’s always something positive and negative to say about every regime. Even in the most developed economies like USA there’s always something negative to say about every government of the day

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  7. Check the graph for GDP between 2011 and 2015. It will tell you a very sad story contrary to what the article is trying to justify. The author is fishing hard to try and find some glimpses of positives to emphasise but it’s really hard if you are playing with numbers. The economy does very well 2006 – 2011. From 2011 towards 2015 a very sharp decline follows. This signifies a downward trend of a seriously troubled economy. We can’t tell when the bottoming is gonna happen. Given other factors such as increasing and maturing debt, we shall spend some significant number of years servicing debt. This will prohibit us from investing in capital projects thereby erroding the gains in capital formation which the author is trying hard to project upwards.
    It’s a gloomy picture fellow citizens and…

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    • Fig 1 show gdp hitting $20bn in 2011. About 2013 it hit an all time high of about $27bn before dropping back to about $21bn after the commodity rout. Unless you are saying you are seeing a different graph from the rest of us??? What you are tring to justify is that it was all good under Mwanwasa and that PF destroyed everything. Off the mark, my friend, try and live in reality!!!

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  8. The author seems to have a narrative contradicting his graphs. Look at the Export, Import and Trade balance graph. All the three indicators have a consistent downward movement from a high in 2011 to lower and lower in the following years (2012, 2012,2014, ….). Citizens’ ability to import and export is dwindling further and further, all signs of a stressing economy. This is the whole reason Govt has been frantically chasing an IMF bailout for balancing of the the balance of payment terms. The IMF package has also proved elusive because the Fund doesn’t want to lend to a govt that doesn’t have a debt repayment strategy and continues to blindly borrow for unwise expenditures.

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  9. Just to educate the author who has elected to hide his/her identity. There is what is called purchasing power parity. A dollar today is much more than a dollar tomorrow. Thus, you can not compare dollars of 1970 to the dollars of 2005 in absolute. So, in such analyses, you adjust all future figures using your BASE YEAR so that we compare like with like.
    Thus, your entire analysis is meaning less and can not be relied upon.
    lastly, use human development indicators and you will see that Zambians are poorer today than they were 40 years ago.

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  10. As an economist and Maths teacher sport on Zambia is going on right direction non Partisan.

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  11. Indeed another one throwing around numbers while not acknowledging the standard of living for Zambians has droped to where UN bodies clarify Zambia as one the most hungrier places and rural Zambia with widespread children’s growth compromised by poor diet……ministers and pf officials will agree with what he is saying because they are getting richer….ba koswe…..

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    • @Spaka, my friend, at least in Zambia you have a Hut and Yard of Land you own in your name. In the West, here most ordinary citizens have no homes with their names on them. Zambia is not too bad really, given it’s on the African continent.

      Poverty is worldwide. We must be more objective in our analysis of economic matters.

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  12. Corruption, thieving, bad governance, police brutality and trampling of on freedoms gloss over the numbers however good the numbers look, they negatives paint a gloomy picture of the country.

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  13. You say that the PF Government deserves a pat on the back? Why? The slide downwards has been unstoppable since 2013. What a free fall it has been! And for that you want a pat on your back? How ridiculous. It’s like adding salt to injury – very disgusting.

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  14. Analysis from a very learned fimofimo but trying hard to justify ama P failiers lets say zambia is in a class of say 210 pupils(countries)and then after an exam zambia comes out number 178 its very hard to give zambia a pat on the back and say mwabombeni !chikopo period.
    What the writer is saying is that in 10 years zambia deserves a pat on the back because it was getting 9% now it is getting 12% .Lets put it this way no parent would condone such pathetic results.
    Solution with whatever resource that are left lets buy utuliba and trap koswe uyu wasupa mumpoto.

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  15. What ***** wrote this? did you not see the numbers in the IMF report? are we in 2014? this is taking people for granted

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  16. While others are bring up numbers which we can’t even understand, Our cry here in our small village is FRA to pay plus for the Maize we supplied in August so that we can buy farming inputs

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  17. Trash it. It is casket material – not worth a dime! How may anyone ever be so dull as to write an article?

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  18. One great achievement is the creation of vending jobs in the streets of Lusaka. Lusaka looks great with all the wooden shelters and heaps of garbage. Shame upon us.

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  19. The only things upnd knows to well is when one has been short died ,one has gone two days without eating,one has been badly beaten, then upnd minions and there big mouth they will come out like loud speakers now i dont know why this part rejoyce in every bad thing happen to zambian whom they pretend they want to lure ,and always want to paint pf as a very bad gorv just cool tafisanga meno yamukanwa

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  20. This article is rhetoric and a shear west of time and space. If PF has achieved such growth, then why are Zambians hard hit economically during this Lungu’s governance? Why is money not in circulation? Why are Zambians taxed everywhere? Why is there a lot of corruption and milking the public in government offices of all government departments and no one cares? Plot 1 caretaker is sleeping on duty. Zambia is in a mess! Period!

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  21. Let’s argue with our brains and not hearts. Insults because I divergent opinion or analysis is a sign of lack of analytical depth. If you can’t argue beyond a certain level just listen and learn. This platform should be mature. Statistics are a basis for arguments than personal opinions and conjecture.

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  22. Those figures given in the article don’t mean much without taking into consideration the population growth rate and percapita incomes despite the growth figures.

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  23. If our outlook is this good, then why are we begging from IMF and borrowing for literally every significant undertaking by the government?

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  24. For all the smarty pant ranting of @ts above with his fancy foot worked stats, it has to be said Zambia has really won in the Peace and Stability of most African countries providing an environment for real economic growth and impressive international Investor Partner.

    Under PF, especially under His Excellency President Lungu, Zambia has been on a knife edge fast ride; balancing Political turmoil and effects of International Markets. We have successfully battled international Market dips. Our worst enemy are greedy Opposition politicians who use violence and unsettling tribal type of politics affecting the ability of citizens to work together for common good. Show us @ts which Western economy isn’t wobbling at the moment.

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