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Sunday, 15 November 2015

On Break!

I am currently taking time off writing to renew my batteries and spend some time thinking around various issues on the ground. Will resume in December.

God willing we will have much more consistency and comprehensive writing than has been possible over the last few months due to limited time on my hands!

Many thanks for your unwavering support! 

Tuesday, 13 October 2015

Zambia Budget 2016

Finance Minister Alexander Chikwanda delivered the Budget Statement 2016 on Friday. A fairly boring budget with nothing new really, which is as expected given the chaotic fiscal and monetary situation Zambia has found itself in. The only surprise is that Alexander Chikwanda has continued his overly optimistic forecasts of the fiscal deficit. It is a surprise because one would have thought a dose of realism would have set in by now. More discussion on some of the proposals in due course.

Thursday, 1 October 2015

Zambia is downgraded again!

Editor's note : The ratings agency Moody's recently downgraded Zambia's credit rating from 'B1' to 'B2' based on "sustained deterioration in fiscal and debt metrics" in the context "lower growth environment" due to weaker copper prices and electricity shortage. The outlook has been revised to stable from negative, suggesting it is unlikely to experience another downgrade over the next 12-18 months.
Moody's Investors Service has downgraded Zambia's government issuer rating to B2 from B1 . The outlook on the rating has been changed to stable from negative.

The key driver for the downgrade is our expectation of a sustained deterioration in fiscal and debt metrics that is unlikely to reverse over the course of the 3-5 year rating horizon given the challenges stemming from a lower growth environment amid an extended period of weak commodity prices, constrained copper production, and domestic electricity shortages constraining business activity.

Sunday, 6 September 2015

Zambia's economic woes goes viral

We recently shared this post on Facebook which has gone viral. it has been wonderfully exciting to see it re-shared countless times. Most importantly it has generated interesting discussions about how to tackle the changelings ahead .

There are essentially nine big economic policy challenges facing GRZ :

(1) Very weak copper prices (lowest in 5 years)
(2) Rising debt levels (Highest since HIPC)
(3) High fiscal deficit (likely to get even larger soon)
(4) High youth unemployment
(5) Power deficit (possible blackout in October)
(6) Volatile and falling Kwacha ($1 per K10)
(7) Poor policy credibility
(8) High and rising cost of private borrowing
(9) High poverty levels (80% poverty in some areas)

Saturday, 5 September 2015

Zambia Kwacha Chaos : State House Response

Editor's note : President Lungu has issued a formal statement on the rapid depreciation of the Kwacha. The Kwacha today was trading above K10 per US$1. The Bank of Zambia Governor Denny Kalyalya yesterday indicated that he has no plans to halt the depreciation, "It is very clear what our policy is, we are going to maintain a flexible exchange rate". His statement has fuelled further panic with with no end of "bottoming out" in sight. Here is the statement released by State House pertaining to Kwacha issues. It largely repeats what BOZ said recently.
Following the deterioration of the currency and energy situation in the country in recent months, His Excellency Mr. Edgar Chagwa Lungu, President of the Republic of Zambia has intervened to guide monetary and fiscal policy measures designed to stabilise the markets.

The continued difficulties in the global economy and the unprecedented strengthening of the US Dollar has sent all currencies including our national currency, the Kwacha on a downward spin.

Friday, 4 September 2015

Zambia in Figures (1964 - 2014)

A very helpful statistical pack covering key figures since independence. This should hopefully help eliminate confusion over competing figures quoted in the media.

Chola Mukanga
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