Zambia sees ’06 economic boom

LUSAKA – Zambian economic growth will edge higher this year fuelled by growth in copper production, tourism and financial services, the Treasury said on Tuesday.

Treasury data showed that real gross domestic product, the measure of economic output, would expand by six per cent in 2006 from 5,4 per cent last year. Debt relief to Zambia by global lenders had also helped the government to expand spending on infrastructure as it tried to get more children to school and construct hospitals in remote rural districts, Finance Minister Ng’andu Magande said.Magande told Reuters in an interview that Zambia’s fiscal policy had won the hearts of donors and would lead to the country receiving millions of dollars in development grants, after the bulk of its foreign debt, which was estimated at US$7,1 billion in June last year, is cancelled by lenders.”Prospects are looking very good for our economy …Our aim is to lower inflation to a single digit and stabilise the exchange rate,” Magande said.Treasury data shows that annual inflation declined to 15,9 per cent last December from 17,5 per cent in the same month in 2004.Tourist numbers jumped 26 per cent last year to 650 000 and could rise faster in 2006 as mainly European and American visitors opted for Zambia’s side of the fabled Victoria Falls, a gem shared with Zimbabwe, which is facing economic decay and political instability.Analysts said Zimbabwe’s problems were to Zambia’s gain.”The political problems in Zimbabwe created an opportunity for Zambia to boost its tourism,” CitiBank Zambia treasury head Ignatius Chicha told Reuters.”Tourism now ranks as one of the areas of economic growth,” Chicha said.He also expected a huge jump in agricultural production due to a surplus expected in maize and other crops.Copper production is expected to expand to 600 000 tonnes in 2006 from 466 799 tonnes last year, the Treasury says.”Copper mining will do very well after the recapitalisation in most mines last year,” CitiBank’s Chicha said.Chicha saw construction weighing in on growth.He cited state power utility Zesco’s plans to construct two power plants at a cost of US$1,2 billion and a project to build 5 000 new urban homes in Zambia with cash from the US government.The projects are due to be launched this year.Analysts say Zambia must launch a second wave of economic reforms – reducing the cost of doing business, improving access to computers and streamlining telecommunications to tap foreign direct investment and grow the economy faster.Zambia had to do more to help the private sector thrive, and maintain transparency and efficiency in management of public resources to inspire foreign investment, an official from the International Monetary Fund said.- Nampa-ReutersDebt relief to Zambia by global lenders had also helped the government to expand spending on infrastructure as it tried to get more children to school and construct hospitals in remote rural districts, Finance Minister Ng’andu Magande said.Magande told Reuters in an interview that Zambia’s fiscal policy had won the hearts of donors and would lead to the country receiving millions of dollars in development grants, after the bulk of its foreign debt, which was estimated at US$7,1 billion in June last year, is cancelled by lenders.”Prospects are looking very good for our economy …Our aim is to lower inflation to a single digit and stabilise the exchange rate,” Magande said.Treasury data shows that annual inflation declined to 15,9 per cent last December from 17,5 per cent in the same month in 2004.Tourist numbers jumped 26 per cent last year to 650 000 and could rise faster in 2006 as mainly European and American visitors opted for Zambia’s side of the fabled Victoria Falls, a gem shared with Zimbabwe, which is facing economic decay and political instability.Analysts said Zimbabwe’s problems were to Zambia’s gain.”The political problems in Zimbabwe created an opportunity for Zambia to boost its tourism,” CitiBank Zambia treasury head Ignatius Chicha told Reuters.”Tourism now ranks as one of the areas of economic growth,” Chicha said.He also expected a huge jump in agricultural production due to a surplus expected in maize and other crops.Copper production is expected to expand to 600 000 tonnes in 2006 from 466 799 tonnes last year, the Treasury says.”Copper mining will do very well after the recapitalisation in most mines last year,” CitiBank’s Chicha said.Chicha saw construction weighing in on growth.He cited state power utility Zesco’s plans to construct two power plants at a cost of US$1,2 billion and a project to build 5 000 new urban homes in Zambia with cash from the US government.The projects are due to be launched this year.Analysts say Zambia must launch a second wave of economic reforms – reducing the cost of doing business, improving access to computers and streamlining telecommunications to tap foreign direct investment and grow the economy faster.Zambia had to do more to help the private sector thrive, and maintain transparency and efficiency in management of public resources to inspire foreign investment, an official from the International Monetary Fund said.- Nampa-Reuters