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Saturday, 8 January 2011

GDP on the up!

We continue our post leave catch with this interesting projection from the Central Statistics Office (CSO) that the economy probably grew by 7.1 percent in 2010,  higher than the earlier forecast of 6.4 per cent. The growth is attributed to rise in copper production as demand for the metal surged. 
Economy expected to grow by 7.1 Percent in 2010, Central Statistics Office Bulletin, December 2010, Report:

The preliminary estimates of Gross Domestic Product (GDP), i.e., the total value of goods and services produced in the country, show that the economy is likely to grow by 7.1 percent in 2010 compared to the 6.4 percent recorded in 2009. The preliminary estimates of Gross Domestic Product are based mostly on data up to the second quarter of 2010. 

This is 0.5 percentage points higher than the 6.6 percent projected by the Ministry of Finance and National Planning at the beginning of the year. This growth is largely driven by increased output in Mining and Quarrying, Transport and Communications, Construction, Agriculture, forestry and fishing as well as Wholesale and Retail Trade.
 The Primary Sector, which consists of Agriculture, Forestry and Fishing as well as Mining and Quarrying, is expected to grow by 10.9 percent in 2010 compared to 12.4 percent in 2009. This is due to anticipated strong growth in agriculture and metal mining. Agriculture, forestry and fishing is expected to grow by 6.6 percent while Mining and Quarrying is expected to grow by 16.8 percent.
The Secondary Sector, comprising Manufacturing, Electricity and Water Supply as well as Construction, is also expected to register positive growth, although not as large as the primary sector. The sector is expected to grow by 5.8 percent in 2010 compared to a growth of 6.2 percent in 2009. Manufacturing is expected to record a growth of 4.4 percent in 2010 compared to a growth of 2.2 percent in 2009. This is spurred by the expected strong growth in Food, beverages and tobacco. Textile and Leather industry is expected to record a decline in growth for the seventh consecutive year. The Electricity and Water industry is expected to grow by 4.7 percent in 2010 from 6.8 percent in 2009. The Construction industry is also expected to record a growth of 7.2 percent, from 9.5 percent in 2009.

The Tertiary industries are expected to grow by 5.7 percent in 2010 compared to a growth of 3.9 percent in 2009. The relatively higher growth is due to the expected increased output in the Transport and Communications industry.


  1. Remains to see how meaningful is this growth in the lives of people. I drive on the Kafue road from Kafue to Lusaka everyday. It is shocking how those potholes are growing by day on this very important road to Zambia's economy.

    Yesterday, Sunday 9th January at the junction to York farms (between Makeni turn off and Vuma filling station) a team was filling in a set of potholes with some gravel. Today Monday, 10th Jan 2011, all that gravel has been washed away by the heavy rains and the potholes are back.

    As great minds such as Amatya Sen have argued, economic growth in itself is no measure of human development. People in Zambia are "Dying for Growth" as Paul Farmer would say. In the bid to grow our economy we are forgeting the very fundamental building blocks that sustain economic growth, human beings. In Zambia at the expense of economic growth we have ignored to invest in human capabilities that would in turn increase economic growth. Imagine in a country of possibly over 14million people (we wait the census results) less than a million people are employed formally.

    We watch in dismay as so called expatriate take over jobs in the mining and othe industries. Our brilliant, educated and experienced Zambians have left this coutry to go and contribute to the development of other countries simply because Zambia has failed so far to create siginificant opportunities for these geniuses to function and contribute to the development of Zambia.

    While there are no quick fixes to turn around the backle of poverty, government should be seen to invest in their citizens, to empower and create effective opportunities for citizens to drive their own development. I hope as we go to the elections this year, we will be voting for responsible leaders that will prioritise Zambian citizens and develop economic development programmes that do not just focus on growing the economy but translating the benefits that acrue into action and shifting focus from thinking of growth only to thinking local people driven development.

  2. Indeed, strong GDP growth does not necessarily translate to increased prosperity for everyone in an economy. But these figures are still encouraging.

    Further, if Zambia is following the Kuznets curve, then higher income inequality could be a sign of increasing income per capita, that will slowly decrease as Zambia becomes more developed. Although, i wouldn't want to make too much of that.

    Still the news from CSO is encouraging. Even more so as it is likely that they are underestimating GDP still, especially in the mining sector.

    Readers might be interested in another statistic that seems to be good news for Zambia.

    The Economist has forecast that Zambia will be amongst the top ten fastest growing economies over the next five years.

    Of course, when this growth is driven by exploitation of a non-renewable resource, the rate at which Zambia's natural capital wealth is decreasing should also be accounted for. This paper gives a great discussion and estimation on this topic:

  3. I definitely side with Chabu on this one. The numbers will always reflect a positive growth when the right sort of outliers are in place. The question to ask: Is who is made better off by this "economic growth"?

    Needless to say, development economics is a fine art that needs a steady hand.

  4. What does economic growth mean if it came out of Zambian soil and all went into a mining company's pocket? To the ordinary Zambian it means nothing. Its not sustainable because its a non renewable resource. It did not go into health, education or infrastructure because they dodge most of the little tax they are suposed to pay. So where is the benefit? Real growth would mean more people having enough food, more children completing education, more people in employment and so on. We are not seeing it.


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