Economic fruits begin to ripen: Zambia recent economic performances have been impressive especially as the non-mining sectors, such as construction and manufacturing have continued to expand. The growth momentum, writes Nawa Mutumweno, is expected to gather pace this year.

Author:Mutumweno, Nawa
Position:Zambia
 
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THE OUTLOOK FOR THE Zambian economy remains favourable in the medium term, underpinned by robust growth and single-digit inflation. The economy is projected to grow 7.3% in 2013, albeit with vulnerability to external shocks on the backdrop of a sluggish global economy recovery. Growth indicators appear favourable anchored on sustained expansion in agriculture, construction, manufacturing, transport and communications, and a rebound in mining. However, some economic analysts have contended that maintaining investor confidence has emerged as a key issue after the government reversed the privatisation of Zamtel.

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Agriculture has been robust in recent years, producing bumper harvests since 2009, with maize doing particularly well. Non-maize production, however, is gaining momentum, reflecting increasing diversification in the sector. To address infrastructure deficiencies, the government has increased the agriculture budget allocation, with the bulk of the funding going to the Farmer Input Support Programme (FISP) and crop purchases for the strategic food reserve. Other key areas worthy of mention are development of irrigation infrastructure, and livestock, fisheries and aquaculture. Output in the mining and quarrying sector fell 0.7% in 2011 as uncertainty over the outcome of presidential elections saw investment decisions on major projects deferred, according to the Africa Economic Outlook 2012. As a result, copper output dipped 2.2%. With the elections having gone smoothly, mining investment have now picked up. The mining sector subsequently grew 10.6% in 2012 and is expected to be at 10.3% in 2013.

The construction sector has been pivotal to Zambia's growth in recent years, accounting for about 21.1% of the economy. With the continued rebound in mining activity and increased public expenditure on infrastructure, the sector's growth rate is pegged at 17% in 2013.

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Growth in transport and communications slowed to 12.7% in 2011 from 15% in 2010, mainly due to problems with railway infrastructure and slower growth in air transport and communication.

A plus for the sector comes with the recapitalisation of Zambia Railways Limited and the opening up of regional flights by Proflight. Fortunes for the sector should improve for the better if plans to establish a national airline mature.

Strong growth in manufacturing

The country's prospects for sustained growth depend on increased...

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