Climate change to weigh down on Zambia’s 2019 economic growth rate – Mwanakatwe

Zambia’s economic growth in 2019 is projected to slow down due to continued adverse weather conditions which will negatively impact on agriculture production and the energy sector, says Minister of Finance Margret Mwanakatwe.

Mwanakatwe said the slowdown in the global economy is likely to weigh down on the domestic economy. Speaking when she officiated at the quarterly performance report meeting held in Lusaka on May 10th, 2019, attended by the Zambian Business Times – ZBT, Mwanakatwe stated that the country’s economic growth in 2018 was a resilient and that the GDB grew by 3.7 percent from 3.5 in 2017.

She explained that the key drivers to this growth included mining, electricity, manufacturing and financial services sectors. Mwanakatwe further noted that the poor climate conditions affected agriculture output which brings about the importance of adopting climate resilient agriculture practices and quickening the pace of implementation of the country’s economic diversification programme.

The Minister has also indicated that the country’s budget performance on the fiscal side over the first quarter of 2019 has seen domestic revenues collection of K14.99 billion, which were above target by 4.4 percent adding that this was mainly driven by higher non-tax revenue collections from declaring of dividends.

She added that domestic financed expenditure amounted to K12.8 billion below the budget projection due to depreciation of the exchange rate in the first quarter of the year. She said most expenditure items were constrained below budget projections except for interest payments on debt which were 16.2 percent higher than the projected at 5.0 billion.

“I wish to add that the bulk of the above projected performance in domestically generated revenues, amounting to K1.4 billion were utilized on meeting the shortfalls on maturities for government paper . And in line with the fiscal consolidation drive, government intends to front fiscal consolidation over the medium term, I will be outlining measure that we must undertake subsequently,” she said.

Meanwhile, the minister said government is aware of the challenges facing the economy and that it will remain committed to addressing these challenges so as to foster inclusive growth and sustainable debt management.

Zambia’s economic growth in 2019 is projected

Funds for GDP rebasing will be released – Mwanakatwe

Minister of Finance Margaret Mwanakatwe confirmed that her ministry has advanced and that its on her neck planning the rebasing of the country’s Gross Domestic Product (GDP), an exercise last conducted about 10 years ago.

The minister had last year during the budget speech announced that Government will undertake an exercise to rebase the country’s GDP this year 2019, an exercise last conducted in 2012.

Mwanakatwe stated that given what is happening with the country’s economy and what has happened in the last few years, the country should be able to see the improvement and growth in the economy once the exercise of rebasing of GDP is completed.

The minister said this when she responded to a question raised by the Zambian Business Times – ZBT during the Quarterly Town Hall engagement held in Lusaka on Friday, 10 May.

The minister said that her ministry has set aside some money for the rebasing exercise but that there is need to take stock of what GDP really is. “The ministry has set aside a budget meant for the rebasing of the country’s GDP an exercise last conducted 10 years ago. But before we do that, there is need to ensure that we understand the current status of the economy before the funds can be released. The ministry will soon release the funds for the exercise which will enable the measurement of the improvement of the country’s economy,” she said.

However, a source had last week told ZBT in an exclusive Interview that no funds have so far been set aside for the rebasing exercise as announced by the minister. “The pronouncement by the minister of finance that government has set aside funds for the rebasing of the country’s GDP is just mere word on mere paper. In reality government has no money and that the government should instead approach institutions such as the African Development Bank – AfDB to assist it with the required resources for the conducing of the rebasing exercise”.

Concerns on budget credibility and the rebasing of the GDP have arisen following the fact that some projects which were announced for completion in 2019 which need more than six months to implement have still not been funded by end of first quarter 2019.

Minister of Finance Margaret Mwanakatwe confirmed that

Zambia should set up cyber crimes incident response team – BOZ

Bank of Zambia – BoZ Deputy Governor says the country should seriously consider setting up a Computer Incident Response Teams (CIRTs) for various industries including the financial sector in order to curb cyber security crimes.

BOZ has since called upon the Bankers Association of Zambia to work with the central bank to ensure that this is achieved. The financial services sector is a key target by cybercrime criminals because it is the custodian of large amount of funds in the economy.

Deputy Governor – Administration, Dr. Tukiya Mabula-Kankasa was speaking during the Cyber security workshop. “I believe that the CIRT would not only assist in ensuring that all financial institutions are collaborating and working as one in mitigating cyber risks but also enable information sharing. The financial services sector has to see cyber security for what it is, a large scale operational risk deserving the utmost attention and thus develop the necessary systems and cultures throughout the sector to deal with this risk,” she said

Key to the development and operation of these systems and cultures is the need to nurture talent capable of addressing cyber security threats through prompt detection, investigation, reporting, prosecution and prevention.

She further stated that technology (ICT) has over the years permeated all aspects of our lives and in particular has become the mainstay of the world’s financial sector infrastructure. “While these ever emerging technologies such as Digital transformation, Artificial Intelligence, Internet of Things, Cloud Computing, Enterprise Mobility and Mobile Banking, have brought about efficiency and increased innovations, they have also exposed the financial services sector to cybercrime”.

”For this same reason, the financial services sector has to also deal with other types of risks, which among others include, fraud, extortion, money laundering, illicit financial flows, market manipulation, data theft, and currency attacks,” she said.

Bank of Zambia - BoZ Deputy Governor

LuSE signs deal with PMRC to re-energize growth of capital markets.

The Lusaka Securities Exchange – LuSE has signed a Memorandum of Understanding – MoU with the Policy Monitoring and Research Center – PMRC aimed at promoting increased levels of financial and capital mobilization for industrial growth at every level of economic activity.

Speaking during the signing of the MoU between LuSE and PMRC in Lusaka on 6th May 2019 attended by the Zambian Business Times – ZBT, LuSE Chief Executive Officer Pricilla Sampa said the partnership will energize the growth of the stock markets which will benefit the economy.

Sampa said much will be achieved in directing and promoting public understanding of the stock market through research adding that meaningful economic development and industrialization will be achieved.

Speaking at the same event PMRC Executive Director Bernadette Deka – Zulu said capital markets are important for inclusive growth specifically in wealth distribution and ensuring that capital markets are safe for investors.

Deka – Zulu said it is a well know factor that a well-developed capital market creates a sustainable low-cost distribution mechanism for multiple financial products and services across the country and further increases mobilization of savings and improve efficiently the volume of investors.

She said the partnership between the two will enhance understanding and comprehension of capital and financial markets as well as financial literacy among the citizenry. “In the financial sector we are aware that government policy is aimed at ensuring stability in the banking and non-banking sectors, including enhancing financial markets deepening to stimulate increased access to financial services to support economic growth, in this view we cannot overemphasize the critical role that capital markets play in any economy,” she said.

LuSE has struggled to attract especially small and medium enterprises – SMEs to list on its alternative investment market that was launched as an answer to capital raising which has been a major missing ingredient in Zambia.

The government in 2019 through the Industrial Development Corporation – IDC has announced that two of its state owned companies (Zambia State Insurance Corporation and ZAFFICO) will he listed on LuSE which is expected to breath some new levels of relevance into the local bourse. However, the challenge remains that its attractiveness remains questionable as seen by the low levels of listing and transaction volumes on already listed stocks.

More needs to be done by LuSE to join the league of frontier African bourses in South Africa, Kenya, Nigeria and Ghana. There is need for the management at LuSE to benchmark their performance against the leading African countries at the minimum to ensure that Zambia is not left behind in terms of financial markets development.

Many are the times that we talk of slower rates of private sector development and its institutions like LuSE that can act as game changers to the ability to efficiently allocate capital, that can then be applied to diversify the economy and improve exports for Zambia.

The Lusaka Securities Exchange – LuSE has

GDP rebasing risks failure to take off this year

The rebasing of Zambia’s Gross Domestic Product – GDP value this year may fail to take off due to slow implementation and delayed release of funds by the treasury,  a source has told the Zambian Business Times – ZBT.

GDP rebasing was lauded as a way to recalibrate and measure the current size of the economy as well as improve efficiencies such as revenue collection (tax to GDP ratio) as well as support key country ratios such as debt to GDP ratio that is used as a key parameter in assessing a country’s debt load.

Last year, Minister of Finance Margaret Mwanakatwe during the budget speech announced that Government will undertake an exercise to rebase the country’s GDP in 2019, an exercise last conducted in 2012. This exercise was later supported by institutions such as the Economic Association of Zambia – EAZ and some independent financial analysts.

“Mr. Speaker, in 2019 Government will undertake an exercise to rebase the Gross Domestic Product, an exercise last conducted in 2012. The rebasing of the Gross Domestic Product will provide reliable and updated information on the current size and structure of the national economy. The rebasing will also provide Government with an opportunity to update and develop appropriate social and economic indicators to measure progress in achieving the objectives under the National Development Plans and the Sustainable Development Goals,” she said.

However, a source whose identity has been withheld has told ZBT in an exclusive interview that no funds have so far been released for the rebasing exercise as earlier announced by the finance minister. The last update that the ZBT got was that about $5 million is needed for the rebasing exercise to be a successful and completed on time.

“The pronouncement by the minister of finance that government has set aside funds for the rebasing of the country’s GDP is just mere words. In reality government has not released the requisite funds. The source indicated that multilateral partners such as the IMF, World Bank or African Development Bank can be called upon to assist with the required funds for the conducing of the rebasing exercise before its too late,” the source said

The source stated that its un-disputable fact that knowing the accurate size and structure of the economy is as important as the economy itself. It is an invaluable input in national development planning and helps the government know whether or not the country is growing or contracting and which industries are the key drivers and which ones need tinkering.

In addition, knowing the size and structure of the economy helps government assess its performance by disaggregating the source of economic performance.

We may all recall that Nigeria’s GDP was rebased from about US$270 billion to US$510 billion for 2013 with the increase of about 90% attributed to new sectors of the economy such as telecommunications, movies & performing arts industry, and retail which were previously either not captured or under-reported. As a result of the rebasing, Nigeria is now the largest economy in Africa beating South Africa which had dominated the top slot for many years.

The rebasing of Zambia’s Gross Domestic Product