The Business Confidence Index – BCI for the second quarter (Q2) of 2019 has shown a further decline from the first quarter (Q1) of 2019 mainly due to the depreciation of the local unit, the Kwacha, leading to negative sentiment among the business community.
According to the Zambia Chamber of Commerce and Industry – ZACCI business confidence survey conducted on over 300 members of ZACCI across all sectors, the recorded BCI of 51.3 points is lower by 100 points hence signifies negative sentiments about the business climate in quarter 2 of 2019.
Addressing the Media in Lusaka on September 6 2019, ZACCI president Chabuka Kawesha explained that recorded negative sentiments we’re mainly due to the depreciation of the Kwacha, low sales due to reduced demend, delayed payments by Government, Poor liquidity, increased competition from foreign goods, policy uncertainities, uncertainities around the introduction of sales tax and the initiated liquidation process of Konkola Copper Mines – KCM on the Copperbelt.
The survey further revealed that the performance of business did not record an improvement in Q2 of 2019 compared to Q1 of 2019 due to the cited reasons and that most businesses experienced decreased demand for their products in the period.
“Additionally, the survey reveals that the general cost of doing business increased in Q2 of 2019. Further, that businesses expect the overall performance of the economy not to grow from the current level,” he said.
ZACCI has however called on government to quickly address the uncertainty surrounding sales tax and maize adding that there is need for new investments in the energy sector both for off-grid and on- grid clean or renewable energy. Meanwhile, the ZACCI president recognized and applauded government on the promotion of the fish farming and processing industry and the increased interest nationally.
Zambian authorities have struggled to manage the Kwacha to US dollar exchange rate pair due to lack of a clear policy and accountability among the various government wings on who should take leading responsibility.
The devaluation of the Kwacha is so pervasive that it seeps into the core of the economy, not only wiping out value for Kwacha savings but driving imported inflation. The Central Bank who the public defaults to think are the custodians of the value of Kwacha value and savings preaches that it practices a free market economic policy, leaving no clear accountability on who is responsible and accountable.
