. Gondwe

Zambia’s macroeconomic performance outlines that the country’s overall economic build up is on track despite relative fluctuations of the Kwacha in the face of other convertible international currencies such as the United States (US) Dollar for instance.

Depreciation of the local currency and inflation have been among the topical issues concerning the Zambian economy.

Latest Bank of Zambia (BoZ) data shows that in the first quarter of the year 2014, the Kwacha depreciated by 10 per cent to K6.09 from levels of around K5.10 per dollar.

This is largely attributed to among other factors, higher growth in imports relative to exports, investor sentiments about the country’s economic performance which have at times been on the negative side as well as, falling copper prices on the global markets.

According to BoZ, such downward movements in the value of the Kwacha does not indicate that the economy is not performing well but to the contrary, the Zambian economy has been doing very well in the last 10 years averaging 6.4 per cent per annum.

Central Bank Governor Michael Gondwe has alluded to the fact that, the country’s medium to long-term economic growth still remains bright with higher prospects of attracting Foreign Direct Investments (FDIs).

The Zambian economy recently described by the International Monetary Fund (IMF) as among the fastest growing African economies, is projected to grow at above 7 per cent in 2014.

This is expected to be driven by a host of factors such as agriculture, manufacturing, mining and construction with the agro and mining sectors expected to benefit immensely from increased capital imports.

If this happens, there will be increased capacity utilisation particularly in the mining industry.

With the acquisition of the US$1 billion Euro Bond, there will be robust growth, especially in infrastructure development which will help to attract more investments in various sectors of the economy.

The country also recorded an increase in Gross Domestic Product (GDP) which rose from $332 in 2000 to $1,784 in 2013.

In addition, real GDP growth recorded at 6.5 per cent in 2013, makes Zambia’s overall macroeconomic performance buoyant compared to other countries in the region and the world economy in general.

Inflation currently at 7.6 per cent, is also expected to drop to at least 6.5 per cent by the end of 2014, especially with the easing of seasonal inflationary pressures associated with high food and fuel prices as well as pass-through effects on the foreign exchange rate depreciation.

Although these figures sound impressive, there is need to employ more measures that will scale up production and exports of Non Traditional Exports (NTEs) if the economy is to remain stable for a considerable time.

With that having been achieved, there is as Dr Gondwe said, the need to do more to make growth much more inclusive, If it will have a lasting dent on poverty levels, depreciation of the Kwacha as well as inflation.

It will mean increasing value addition in agricultural products and gemstones to maximise exports in order to help distabilise the falling Kwacha.

This will in turn boost GDP growth, create massive employment for the hundreds of people, especially the skilled and semi-skilled population which will definitely contribute to the reduction of high poverty levels in the country.