By Buumba Chimbulu
ZAMBIA’S Gross Domestic Product (GDP) is expected to expand to 3.8 percent in 2017, 4.8 percent in 2018 and 4.7 percent in 2019 assuming Government continues to implement its economic reform programme, predicts the World Bank
These forecasts are however lower than what the Washington-based lender predicted in June of 4.1 percent expansion in 2017 and 4.5 percent in 2018.
On the other hand, prediction for 2019 has remained unchanged.
Following this development, the bank has emphasised the need for Zambia to implement a well crafted strategy to reduce the cost of borrowing, extend the terms and diversify the sources of debt funding.
This is according to the Zambia Economic Brief, How Zambia can borrow without sorrow,” released by the World Bank Group in Lusaka yesterday.
World Bank economist, Gregory Smith, explained that despite a bumper harvest, improved electricity generation and an easing of monetary policy, economic recovery in Zambia was expected to improve only modestly as it remained subdued in 2017.
Dr. Smith also explained that the report highlighted that Zambia was tapping debt capital markets and had many sources of borrowing but that a new active approach to debt management was needed that contrasts with the passive approach to debt management since debt relief.
World Bank country manager for Zambia, Ina Ruthenberg, said debt was an important source of development finance and a key tool for eradicating poverty.
Ms. Ruthenberg said there was a need to look closely at ways to improve debt management to ensure that economic growth had sustainable foundations and borrowed money was invested wisely to ensure inclusive growth.
“Countries all over the world borrow to finance their investment and development, Zambia is not different and has huge and immediate infrastructure needs,” she said.
Meanwhile, Minister of Finance, Felix Mutati, said Government would enhance domestic revenue mobilisation as it creates capacity to deal with debt.