Zambian Economy To Grow 4% - President Hichilema

President Hakainde Hichilema has predicted that Zambia’s economy will grow at 4% per year in the medium term as the country benefits from more tightly controlled fiscal management under the New Dawn government.

Speaking at the opening of parliament on Friday, the President said, “We have put our economy on a positive growth trajectory in the last 12 months and project the economy to bottom up from this negative growth.”

According to the Bank of Zambia, the economy grew by 3.6% in 2021, following a contraction of 2.8% in 2020, when Zambia became the first African country to default on its debts during the Covid-19 pandemic.

Reflecting on the previous government’s legacy, President Hichilema said “Fiscal management was excessively deficient and was characterised by poor resource allocation and reckless borrowing, which increased the cost of debt servicing resulting, unfortunately … in a debt default.”

Since taking office, the President continued, the New Dawn government has managed to stabilise the economy within one year, including driving inflation down from 24.4% in August 2021 to 9.8% last month. This means that the money in ordinary citizens’ pockets is worth more as the price of goods is increasing far less quickly than this time last year.

The government has also managed to successfully negotiate a $1.3 billion bailout agreement with the International Monetary Fund (IMF), setting the stage for further negotiations with Zambia’s creditors. In all, the government is seeking some $8 billion in debt relief, in order to lighten the load on the public finances and free up money for essential services such as healthcare and education.  

All in all this paints a positive picture for Zambia’s future, with businesses and investors looking to pour more money into the country and grow its economy. The President’s prediction of 4% growth from next year places Zambia above the global predicted average of 3.6% and far ahead of the 2.4% estimated by the IMF for industrial countries.