Finance Minister Dr. Situmbeko Musokotwane has painted a mixed picture of the Zambian economy highlighting both progress and challenges.
In his recent statement to Parliament, Dr Musokotwane explained that while GDP growth remained positive in 2023 at 4.3%, it fell slightly from 2022’s 4.7%. The key culprit: a drop in copper exports, Zambia’s economic lifeblood, due to lower production and prices.
According to Dr Musokotwane this decline, coupled with high rainfall impacting mines, contributed to the Kwacha’s depreciation against foreign currencies.
However, despite the external pressures, the minister lauded the government’s fiscal discipline noting that revenue exceeded targets, and expenditures adhered to allocations, marking a positive change from past practices.
Notably, funds for crucial areas like education, pensions, and social programs were released without delays as well.
On debt restructuring, Dr Musokotwane reported significant progress on restructuring Zambia’s external debt, with the official sector deal already finalized and the private sector discussions advancing after clarification of “comparable treatment” clauses.
Furthermore, the Minister acknowledged the severe drought impacting the agricultural season and vowed to ensure food security for all citizens.
He said this will likely require adjustments to the 2024 budget to support vulnerable households.
Meanwhile, Dr Musokotwane said that The reliance on hydropower poses additional challenges with the drought.
The Minister stressed the need for exploring alternative energy sources to mitigate potential power shortages.
On a brighter note, Musokotwane expressed optimism about the future. He expects the return of Konkola Copper Mines (KCM) and Mopani Copper Mines (MCM) to full production this year, significantly boosting foreign exchange earnings and reviving the mining sector.
Additionally, expansions at existing mines and new ventures promise further economic growth in the coming years.
The Minister highlighted positive developments in tourism, telecommunications, manufacturing, and construction, hinting at broader economic diversification and progress beyond mining.
Dr Musokotwane expressed confidence that by 2026, the UPND government’s efforts will bear fruit, bringing tangible improvements to the lives of Zambians.
By Moses Makwaya
Kalemba February 24, 2024
