Recent Developments and Forecasted 2013 Macroeconomic Objectives
The Zambian economy has been classified as one of the fastest developing and most robust economies in Africa in recent times, having witnessed over a decade of rapid economic growth. A combination of prudent macroeconomic management, market liberalization and privatization efforts, investments in the copper industry and related infrastructure, and steep increase in copper prices helped achieve an average annual growth of around 6.0% during the last ten years. Foreign direct investment rose from approximately US$164.9 million in 2003 to US$1.73 billion in 2010 with most investments going to mining, manufacturing wholesale and retail trade. Annual inflation has also been much lower in the last six years, averaging around 10 percent compared to an average of 197 percent in the early 1990s. Due to a favorable macro-economic environment, inflation was recorded at 6.6 percent by the end of September 2012. Also during the year 2012, gross domestic product (GDP) growth was estimated at around 7%, with gross international reserves having reached to $2.6 billion as at end of September, representing 3.5 months of import cover.
Chief among the Government’s macroeconomic objectives for the year 2013 are to:
- achieve real GDP growthof above 7.0 percent;
- attain end-yearinflation of no more than 6.0 percent;
- achieve domestic revenue of at least 20 percent of GDP;
- limit the overall fiscal deficit to 4.3 percent of GDP, of which domestic borrowing will be 1.5 percent;
- maintain gross international reserves of at least four months import cover.
Recently, the World Bank also projected that Zambia’s economy was expected to grow by 7.3 percent in 2012, slightly higher than the 6.3 percent growth rate of 2011, observing that the Zambian economy had seen robust growth during 2012 in construction, transport and communication services, manufacturing and agriculture. The Bank also noted that the medium term economic prospects for Zambia still remained high.
The country is also poised to record a record merchandise trade surplus of $960 million in 2012. Non-traditional exports are projected to rise by over 50 percent to $2.5 billion in 2012 from 1.6 billion in 2011, with higher exports of maize, electricity, cotton, fresh flowers, burley tobacco and gemstones contributing to this increase.
The Vision 2030 (visit http://www.mcti.gov.zm/index.php/downloads/cat_view/37-policy-documents)
The Zambian people aspirations and vision is to make the country a prosperous Middle Income Nation by 2030. It is in this regard that the Zambian Government came up with a national long term plan known as the Vision 2030 which long term development policy scenarios at different points for the next 20 years. The Vision is being operationalized through the five year developments plans starting with the just ended Fifth national Development Plan (2006-2010) and annual budgets.
The socio-economic development objectives enshrined in the Vision 2030 are to: attain and sustain annual real growth of 6 percent (2006-2010); 8 percent (2011-2015); 9 percent (2016-2020); and 10 percent between 2021 and 2030. Other objectives include to attain and maintain a moderate inflation rate of 5 percent; to reduce national poverty head count to less than 20 percent of the population to reduce income inequalities measured Gini-coefficient of less than 40 percent; to provide secure access to safe water and improved sanitation facilities of 100 percent of the population across the country; to attain education for all; and to provide equitable access to quality health care to all by 2030.
The Sixth National Development Plan (SNDP) (Visit www.mcti.gov.zm/index.php/downloads/cat_view/37-policy-documents)
The Zambian Government in 2011 launched and started implementing the Sixth National Development Plan which aims at actualizing the Vision 2030 of becoming “a prosperous Middle-Income nation by 2030”.
The theme of the SNDP is “sustained economic growth and poverty reduction”. The objectives of the SNDP are to accelerate infrastructure development, economic growth, and diversification, rural investment and poverty reduction, and enhance human development. The Plan also focuses on policies, strategies and programs that will contribute to addressing the challenges of realizing broad based pro-poor growth, employment creation, and human development. Strategies will include addressing the constraints of infrastructure and human development, reducing poverty levels and promoting rural development, stimulating agriculture productivity and promotion of agro-businesses, improving the provision of basic services such as water and sanitation, health, education and skills development.
Investment in key economic infrastructure such as feeder roads, tourist access roads, electricity, water canals as well as cross cutting issues such as governance, gender, environment and disaster risk management will also be Government’s priorities.