Economist Warns Liquidity Crisis Threatens Zambia’s Economic Growth
Lusaka – Economist Trevor Hambayi has raised alarm over Zambia’s persistent liquidity challenges, warning that the prolonged cash flow constraints are significantly impeding the country’s economic growth prospects.
Speaking in a business news interview, Mr. Hambayi noted that since 2015, government monetary policies aimed at curbing inflation have inadvertently restricted liquidity in the economy. While acknowledging the necessity of controlling inflation, he emphasized that the limited availability of funds has had unintended consequences.
“These policies, though well-intended, have squeezed liquidity to a point where the private sector is struggling to access capital needed for reinvestment and expansion,” Hambayi said. “This undermines the private sector’s ability to play its pivotal role in driving sustainable economic growth.”
He further highlighted that Zambia’s long-standing dependence on foreign direct investment (FDI) as the main economic driver is unsustainable. According to Hambayi, a more balanced approach is needed one that empowers local businesses and supports domestic investment through improved financial flows.
“The over-reliance on FDI puts us in a vulnerable position. We must stimulate internal economic activity by addressing liquidity issues to foster genuine, homegrown growth,” he said.
Mr. Hambayi warned that if the current liquidity constraints persist, Zambia risks facing prolonged stagnation in private sector productivity and broader national development.
Please tell them because according to them they are doing very fine and full of self praises. Totally disconnected from the situation and reality on the ground. But normally time of reckoning does eventually come by
Zambians are very lazy.. And this lack of money supply is due to the system having removed the tu ma saaka tawa ndlama..
Surely, how can such a lame excuse be propelled by UPND?
Can president Hakainde Hichilema, our seasoned economist, work on this tightened money supply; review the monthly fuel prices adjustments; and allow for reduced bank lending rates. Zambians are hard industrious workers, but some policies are not helping economic growth. Perhaps, the bonus is for the election year next year.
We need more in-depth analysis from financial experts (not necessarily economists), even successful business men with just primary school level eduction are well qualified to give their take on the economy and how load shedding, exchange rate depreciation and inflation are affecting business and the economy as a whole. Otherwise Zambia is in a complete mess in as far as the economy is concerned and there seems to be no clear direction on how to improve things.
The policy of inflation targeting has proven to have failed.. agreed on that but as an economist what’s your proposed solution? What’s your advice to government. How do we inject money in an economy whilst minimizing the risk of inflation.
There are just so many business ventures that the government should have been supporting. Instead of borrowing money only for refurbishing a Lusaka Ndola road, the boroowed money should have funded business entrepreneurs. They should be handed soft loans for Fishing companies in Luapula, Kariba the Zambezi plains. There are businessmen in Zambia who want capital to run football clubs like Nkana, Nchanga Rangers Mighty Roan. The leather business is a loafing but lucrative industry for small and large scale entrepreneurs, ZESCO should be excluded from Solar generation and this should be left to citizens etc etc All this and more yet we have loafing politicians who sleep in cabinet meeting as reported by the president.