Economy on track – Chikwanda

FINANCE Minister Alexander Chikwanda says Zambia’s economy is performing well although it has experienced some externally-induced shocks.
Mr Chikwanda says just like many other economies globally, the local economy has also experienced some stagnation.
Giving an update on Zambia’s economic performance at a media briefing in Lusaka yesterday, Mr Chikwanda said the growth rate in most economies has been slow.
“Most of the emerging economies have had problems with the growth rate,” he said, adding that budget deficits are not new to the country’s economy.
He said the country’s annual economic growth rate of about six percent is tremendous, compared to the two per cent growth rate in most countries in the region.
“This country has had budget deficits before and there is no single year that this has not happened,” he said.
Mr Chikwanda said there is no need for anyone to cause alarm over the country’s economy.
He said Government will not resort to international borrowing to finance the budget deficit but will rely on treasury bills and bonds among other initiatives.
“We are managing to reduce donor dependency but bond markets should be the other way out for Zambia, as we did when we raised the US$750 million Eurobond and such resources that should be channelled to capital projects including roads and power generation as we are doing,” he said.
On speculations that by-elections are to blame for the budget deficit, he said: “It is not true that by-elections have contributed to the budget deficit.
“A deficit of about K5 billion is not something that should worry anyone”.
He said by-elections are budgeted for, adding that there is no way a budget deficit can be attributed to by-elections.
Mr Chikwanda said salary increments for civil servants could be one of the reasons for the budget deficit.
Government has put measures in place to ensure the country does not over-borrow as over borrowing could easily harm the private sector which is an important part of the economy.
Mr Chikwanda said it is not Government’s intention to keep the nation in the dark about how the economy is performing.
He also said there is need to diversify the economy by enhancing production in the agriculture sector.
Zambia is the only country in the region that recorded a surplus in maize production last season.
He appealed to players in the agriculture sector in need of financing to make proposals for possible funding.
Last Friday, Forum for Democracy and Development president Edith Nawakwi alleged that the country is headed for a K5 billion budgetary deficit which she blamed on by-elections and other expenditure.
Speaking at the same function, Bank of Zambia Governor Michael Gondwe said the new Statutory Instrument number 55 would yield intended results in terms of ensuring that foreign-owned companies especially in the mining sector do not externalise earnings, without adhering to tax obligations.
He said the Bank of Zambia and the Zambia Revenue Authority were closely monitoring the trends in the mining sector as regards tax obligations and ensure they were met.