THE World Bank says Zambia’s economic growth numbers “are not exciting”.

And World Bank country manager Ina-Marlene Ruthenberg has tipped Zambia to exploit its enormous potential in the agriculture sector.

Speaking during the launch of the 11th Zambia economic brief at Hotel InterContinental in Lusaka this afternoon, Ruthenberg explained that “on the broader macro-economic front”, Zambia’s economy was still expected to grow this year.
“But frankly, the growth numbers are not exciting. Zambia needs to grow by seven per cent per year to reduce poverty and that’s what we all want for Zambia. In the present, you are hovering around half of that. So, that’s not really where we want to be as Zambia. We all know [that] most of the challenges are related to the fiscal and debt situation – it impacts so many things and above all, it impacts job creation,” Ruthenberg observed.
“So, the challenges…Zambia is not only facing [them] alone. There are a number of countries who face very similar challenges. But what we would like to point out is to recognise the challenges and to really take them head-on, to be bold about them. The government has announced some bold measures for fiscal consolidation and we felt that was a very important step – we very much welcome that announcement. So, what are we waiting for now? Well, the obvious – the implementation.”
Ruthenberg noted that the “bold” fiscal measures, as announced by finance minister Margaret Mwanakatwe on June 14, need to be implemented speedily.
Mwanakatwe, in a press statement, announced that President Edgar Lungu had ordered cancellation of some existing loans, banned the issuance of letters of credit and guarantees to State-owned enterprises, terminated financing of development projects that are below 80 per cent completion and cut down on ministerial travels with immediate effect.
Mwanakatwe stressed also that nobody but her was mandated by law to sign any form of loan agreement on behalf of Zambia and further banned all government officials from making public statements on economic matters and debt contraction, going forward.
The minister further stated that upon completion of the debt sustainability analysis (DSA) and a full reconciliation of Zambia’s debt stock, the exercise confirmed that: “We need to undertake measures to bring debt risk to moderate from the current high risk.”
“Total public external debt as at end of March 2018 amounted to US$9.3 billion from US$8.7 billion in 2017. The domestic debt stock (government securities) amounted to K53.5 billion from K48.4 billion over the same period. Let me again, emphasise that we have reconciled all the debt with all our creditors and hereby confirm the debt position,” stated Mwanakatwe.
And Ruthenberg noted that successful implementation of the announced fiscal measures would be ideal.
She also pointed out that Zambia needed a budget that would allow funding for public service delivery “even in the remotest villages.”
“[But] debt servicing at the moment takes nearly 30 per cent of domestic revenue [and] there is a high risk of crowding out investments for development. Another very important aspect is that Zambia needs to create jobs; a lot of young people you can see them everywhere. The fiscal/debt situation impacts interests and they are too high for the private sector to borrow and invest for job creation,” she explained.
Ruthenberg, however, underscored that it would be imperative to “look beyond the challenges” the country was facing and focus on its potential.
“I think you all feel here in Zambia [that] Zambia is full of potential. [There are] a lot of opportunities and yes, it’s around agriculture…. I’m travelling around the country quite a bit and it strikes me each time; this country has vast areas of water and land – very good soils and good weather. Actually, with irrigation you can have several harvests a year! Zambia has abundant water and actually, Zambia hosts nearly 50 per cent of fresh water resources of sub-Saharan Africa. That’s a huge asset the country has. So, it’s about exploiting the potential for agriculture,” noted Ruthenberg.