IMF sees Zambia’s 2016 economic growth steady at 3 percent

November 1, 2016 9News Nigeria Africa, African Economy, Zambia 0

LUSAKA (Reuters) – Zambia’s economy should grow by 3 percent this year, largely unchanged from last year as electricity shortages and subdued private sector investment weigh, the International Monetary Fund (IMF) said on Tuesday.

The IMF’s forecast was similar to the government’s own growth estimate for 2016. The economy expanded by 2.9 percent in 2015.

The IMF Mission Chief to Zambia Tsidi Tsikata said resolute policy action such as the removal of fuel and electricity subsidies could help Zambia overcome its economic challenges.

“These measures, if coupled with structural reforms to reduce inefficiencies and increase capacity utilisation in the energy sector would go a long way towards increasing Zambia’s growth potential,” Tsikata told journalists.

Zambia began talks with the IMF in March about a potential aid package after agreeing the budget deficit was not sustainable. The government hopes to conclude a programme with the IMF in the first quarter of next year.

“The mission will return to Zambia in early 2017 to discuss a possible programme. We are going to discuss the elements that will form part of the programme,” Tsikata said.

Finance Minister Felix Mutati said in September Zambia must be prepared to endure economic pain before any gains are felt from an IMF aid programme.

(Reporting by Chris Mfula; Writing by Olivia Kumwenda-Mtambo; Editing by James Macharia)

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