Country Report Zambia October 2009

Outlook for 2010-11

• The presidential and legislative elections due in 2011 are likely to be close-run affairs, but strong powers of incumbency make Rupiah Banda and the Movement for Multiparty Democracy the favourites.
• The government hopes to place Zambia in a position to best take advantage of any recovery of the global economy, singling out diversification and lowering the cost of doing business as priorities.
• Economic policy stagnation is a risk as rising political tensions ahead of the 2011 elections slow reforms.
• Economic growth in 2010-11 should begin to recover after the trials of 2009. Increasing copper and agricultural production will lead growth. However, a potential stutter in the global economy in 2011 could harm prospects.
• Real GDP growth is forecast at 4.2% in 2010 and 4.6% in 2011.
• Moderating food and fuel costs will be offset by increased imported inflation and higher utility prices. Average inflation is forecast to come down only slowly, to 10.5% in 2010 and 9.5% in 2011.
• Increasing copper production and prices will be offset by a deterioration of the invisibles deficit. As a result, the current-account deficit is forecast to increase slightly to 3.3% of GDP in 2010 and 3.5% of GDP in 2011.

Monthly review

• The fallout from the acquittal of the former president, Frederick Chiluba, for corruption has continued. Donors are apparently unhappy that the government's commitment to fighting corruption appears to be waning.
• Mr Banda has fought back, releasing a new anti-corruption strategy, although critics remain sceptical that it is anything more than government rhetoric.
• The National Constitutional Conference, tasked with preparing a draft version of an amended constitution for Zambia has had its deadline extended to November after debate on some issues became bogged down.
• The Ministry of Finance and National Planning published a new Medium Term Expenditure Framework (MTEF) covering the period 2010-12.
• Energy generation continues to lag behind demand, with increasing production at the copper mines placing strain on supplies. Government projects to boost supply may prove insufficient.
• There has been concern that problems in handling the bumper maize crop harvested in 2009 could put farmers off increasing production next year.

Source: Country Report

This report covers the following industry codes:
SIC Code: 53;37;89;60;49;20;1
NAICS Code: 44;336;81;52;22;311