By JUDITH NAMUTOWE –
THE year 2016 is likely to be another difficult year economically and best prospects are for stability as the overall economic recovery remains unlikely, the Credit Rating Agency (CRA) has predicted.
“The year 2016 is unlikely to be a much easier year than 2015. The best prospects are for stability rather than overall economic recovery. The latter may start taking root in the last quarter of 2016 after the presidential elections,” CRA executive director strategy and business development Chishimba Yumbe said.
He further predicted the inhibited economic growth rate of between 3.5 and four per cent due to low copper prices, energy deficits, election fever and poor rainfall pattern.
Mr Yumbe said in a statement that the El Niño expected to last into the first quarter of 2016 would primarily impact the Gross Domestic Product (GDP), food inflation and maize exports.
“It will be imperative for both the Ministry of Finance and the Central Bank to maintain confidence through their policy pronouncements and actions.
The fiscal space was expected to remain tight in 2016, while the fiscal budget would grapple with diminished tax revenue prospects due to the constrained copper industry and other influences.
Mr Yumbe said the expenditure side would deal with pressures from the unions for increased civil servants salaries and expanded debt servicing costs due to additional contracted loans and the depreciation of the Kwacha.
He said the CRA was, however,  confident that Zambia will  endure the challenges.
“Government is resolved to institute austerity measures in its fiscal management. The 2016 Budget, with its theme of “Fiscal Consolidation to Safeguard our Past Achievements and Secure a Prosperous Future for All”, amply underscores this.
“Capital spending should be scrutinised for economic viability and elimination of excesses through the Zambia Public Procurement Authority ,” he said
In the medium to long term, Mr Yumbe said  Zambia’s economic future remained  bright with the greatest potential for sustainable  economic recovery lying with the private sector.
“Zambia’s vast resource endowments still present viable  investment opportunities in mining and quarrying, agriculture, manufacturing, tourism, infrastructure and energy.”