In a press briefing held on 27 March, Zambia’s Finance Minister revised the red metal producers growth rate to below 2% from the earlier target of 3.2% on account of COVID19 impact on the economy. Dr. Bwalya Ng’andu in his address said Zambia’s growth pace will be dependent on the severity of the COVID19 duration.
COVID19 has added another layer of pressure on the Zambian fiscals that already grapple with energy bottlenecks and fiscal vulnerabilities. Zambia will be looking to tap into multilateral pools of funds such the IMF which will be made available to nations fighting COVID19.
The Minister highlighted business disruption in trade flow which has started to and will continue to weigh revenue collection through customs, toll fees and tourism levies. Exchange rate depreciation will burden the external debt repayments which widen the states fiscal posture and will continue to threaten inflation above the upper bound of the 8% targeted range. Dr. Ng’andu acknowledged that industry non performing loan stock will be under pressure as credit quality of counterparties deteriorates on effects of coronavirus.
The Kwacha Arbitrageur