Zambia’s GDP to exceed 3% as copper-producer steps up spending

Zambia’s economy will grow by more than 3% in 2020 from around 2% last year, Finance Minister Bwalya Ng’andu said on Wednesday, while the fiscal deficit is projected to drop to 5.5% of GDP.

Economic growth in Africa’s second-largest copper producer has been hampered by electricity shortages after drought hit hydropower generation, and the government is focusing on diversifying into solar and wind power to plug the gap.

Ng’andu said Zambia’s external debt had increased to $11.2 billion from $10.23 billion at the end of June 2019.

Zambia’s fiscal deficit this year was projected to be around 5.5% of GDP from 8.2% last year as the government enhanced revenue collection and dealt with rising debt, he said.

“The policy thrust of the government now is to reduce the fiscal deficit, ensure debt sustainability and dismantle arrears,” Ng’andu said.

Ng’andu said Zambia’s inflation was expected to remain high in the first half of 2020 largely due to higher electricity and fuel costs but would slow down in the second half of the year.

He did not give a figure, but President Edgar Lungu said on Jan 24 inflation would decrease to 6-8% by the end of 2020.

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