(Xinhua) -- Zambia’s economy has
started showing signs of improvement after the economic meltdown
of 2015 and 2016 caused by falling commodity prices and a power
deficit due to insufficient rains.
economy has started picking up from the economic downturn with
the country’s central bank projecting that growth prospects
would improve over the medium-term, with Gross Domestic Product
(GDP) for 2017 and 2018 projected at 4.2 and 5.0 percent
respectively from 3.8 percent recorded last year.
Already, the economy has grown by 3.1 percent during the
first three quarters of 2017, according to preliminary figures
released by the country’s statistics agency.
This is due to good performances in the construction,
manufacturing and electricity generation industries.
However, attacks on plants by armyworms, which have been
reported in various parts of the country, as well as delays in
the distribution of farming inputs to smallholder farmers under
a government subsidized program, may affect agricultural
production, according to analysts.
The failure to reach a bailout agreement with the
International Monetary Fund (IMF) was a major hallmark of the
The government said in September that it would resume talks
on an IMF aid program in October and was hoping to get an aid
package before the end of 2017.
But so far, indications are that the aid package will not be
concluded this year after IMF expressed concerns over the
country’s rising public debt situation.
The IMF has already stated its concern over Zambia’s public
debt which it said was growing unsustainably and putting the
country at high risk of debt distress.
According to IMF figures, public guaranteed debt increased
from 36 percent of gross domestic product at the end of 2014 to
60 percent as at the end of 2016.
The two parties have since agreed to chart a new path towards
debt sustainability while the government has come up with a debt
management strategy which has become a center of the talks.
Felix Mutati, the country’s finance minister, has assured of
the government’s resolve to deal with the rising debt problem.
The minister, who acknowledged that the country’s debt was
approaching unsustainable levels, said the government was
slowing down on borrowing in order to curtail the rising the
"In order to ensure continued debt sustainability, government
has finalized a medium term debt strategy that provides a
framework for prudent management.
"Further, regular debt sustainability analysis will be the
guiding principle for future borrowing activities," he said in a
statement presented in parliament.
According to government figures, Zambia’s public debt stood
at 12.45 billion U.S. dollars in August 2017, representing 47
percent of gross domestic product (GDP), with the external debt
standing at 7.5 billion dollars.
On the other hand, the revelation by the 2016 Auditor
General’s report that there was increased misappropriation of
public resources received a backlash, especially during a time
when the country was trying to tighten public expenditure which
has resulted in a budget deficit.
While the government moved in quickly to assure citizens that
culprits cited in the report will be dealt with, stakeholders
are not convinced as the trend has been the same over the years.
"The rate at which public resources are being misappropriated
and stolen for personal gain by those in authority today is
unprecedented, worrying and has reached alarming heart breaking
levels to ordinary Zambians," said Maxon Nkhoma, Coordinator of
the Civil Society for Poverty Reduction (CSPR), a local
organization involved in poverty fighting programs.
"If left unchecked this has potential to make the national
treasury bankrupt," said Nkhoma.