Zambia’s newly re-elected President Edgar Lungu faces an uphill battle to revive an economy reeling from a slump in copper prices, with a free-falling currency and widening budget deficit.
After winning last week’s disputed vote, Lungu moved to assure supporters that a new government will work to improve the welfare of Zambians grappling with high inflation and rising food prices, AFP reported.
A drop in copper prices of almost one-third from their peak in February 2011 has resulted in thousands of job losses in the mining industry, where most companies are owned by foreign, notably Chinese investors.
The crisis saw some companies suspend production, dealing a further blow to the southern African country’s top export.
“The new government needs to work hard to restore economic growth,” said Oliver Saasa, the chief executive of business consultancy Premier Consult.
Saasa believes that Lungu, who first took office in January 2015 after the death of president Michael Sata, had been restricted by policies of his late predecessor.
“A government policy shake-up is needed in order to turn things around and inspire confidence in the system,” he told AFP.
“We cannot always rely on copper, the economy needs to diversify.”
Zambia previously enjoyed a stellar period of growth, peaking at 10.3% in 2010.
But the falling copper price has put the economy “under intense pressure”, according to the International Monetary Fund.
In 2015 the country recorded gross domestic product growth of 3.2%—its lowest since 1998—and the rate is forecast to slip to around 3% this year.
