World Economy

Removal of Gov’t Subsidies Triggers Growth in Zambia

Removal of Gov’t Subsidies Triggers Growth in ZambiaRemoval of Gov’t Subsidies Triggers Growth in Zambia

Barclays Bank Zambia Managing Director Mizinga Melu says the removal of subsidies by government has sparked economic growth in the country. She says removal of subsidies has also led to a reduction in inflation and interest rates on the market.

Speaking during a breakfast meeting with journalists in Lusaka, Melu also noted that the positive partnership Barclays has enjoyed with government has led to positive results in the agriculture sector, local media reported.

She said Barclays continues to work with government in areas such as input distribution under the Farmer Input Support Program through the e-voucher system where it dealt with around 80,000 cards. Melu said this demonstrates government’s support toward the sector.

She is also happy that government has started looking at various forms of crops in agriculture beyond maize such as cassava which has various benefits. She added that the bank performed well in 2017 introducing new products and registering growth in profits.

CITI Bank said Zambia’s inflation rate will remain subdued this year while growth is likely to continue to pick up. The bank, however, notes that Zambia’s fiscal outlook remains challenging, the reason why the International Monetary Fund deal will be an important anchor to fiscal consolidation and reducing debt service costs.

The bank states that all eyes will be on Zambia early this year to see whether government can eventually reach an agreement with the IMF on a new program.

“This is largely a political decision and will depend on the president throwing himself more firmly behind one of the current factions in cabinet.

Meanwhile, former Bank of Zambia Governor Caleb Fundanga said earlier that the country’s economic outlook for 2018 looks positive. Fundanga says the high copper prices will contribute to the country’s good economic performance in 2018.

He however warned against excessive acquiring of expensive loans as this may have a negative effect going forward. Fundanga says the country can overcome economic challenges just like it has done in the past.

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