By Nawa Mutumweno – The performance of the Zambian economy has been good with real domestic product growth projected at 6.6 percent in 2010 boosted by the record maize harvest, a rebound in tourism and a continued increase in copper and construction output, according to the International Monetary Fund (IMF).
The Bretton Woods institution’s mission chief George Tsibouris told journalists recently that the Government’s diversification programme coupled with the bumper harvest recorded during the last farming season has had positive impact on the country.
“This year, the bumper maize harvest and the strengthening of the Kwacha have helped bring inflation down and the Bank of Zambia (BoZ) is targeting a further reduction in inflation to seven percent by end of 2011,” Mr. Tsibouris highlighted.
He was also happy that the country’s international reserves had been strengthened, standing at an impressive $1.9 billion.
“The Government is to be commended for its handling of the economic policy so far in 2010. Fiscal performance in 2010 has been broadly in line with expectations though there has been the need to finance the maize surplus. BoZ has managed the monetary policy well with a view of reducing inflation,” he added.
Growth for 2011 was expected to be stronger at 6.4 percent and that next year’s budget was in line with the upholding of sound macro-economic policies.
Zambia and the IMF have reached an agreement on the Extended Credit Facility (ECF) structural measures.
The ECF was created under the newly-established Poverty Reduction and Growth Trust (PRGT) as part of a broader reform to make the Fund’s financial support more flexible and better tailored to the diverse needs of countries.
Mr. Tsibouris advised that Zambia should not veer from the sound fiscal measures that have culminated in positive economic growth even in the face of the coming presidential elections in 2011.
“Elections always bring about complications but we don’t expect this to divert Zambia’s consistence on macro and fiscal discipline that has influenced the current levels of growth,” Mr. Tsibouris pointed out.
And Secretary to the Treasury Likolo Ndalamei said Zambia has continued to perform well and sustain economic stability.
The local currency has been stable and with the continued higher copper prices, Zambia’s economy is poised to become even more robust.