Zambia’s Economic Growth Slows to 2.7% Due to Severe Drought
Zambia’s Finance and National Planning Minister, Dr. Situmbeko Musokotwane, has announced a significant reduction in the country’s economic growth forecast for the year.
The economy, which was previously projected to grow by 5%, is now expected to expand by only 2.7% due to a severe drought that has crippled the agriculture sector and other parts of the economy.
During a speech at the Zambia Association of Manufacturers (ZAM) Pre-Budget Meeting in Lusaka last week, Dr. Musokotwane highlighted the profound impact of the drought on the nation’s economic performance.
“We had expected that the growth for this year was going to be in the region of five percent, following the 4.7 percent growth in 2023. However, we will not achieve this; we will see about 2.7 percent growth instead,” he stated.
The Finance Minister explained that the drought has drastically reduced agricultural production, with two-thirds of the anticipated income from the sector not being realized. This shortfall has a cascading effect on the entire economy, not just hurting farmers but also impacting related industries.
“Not only will farmers bear the pain, but it transits throughout the economy. Economic sectors such as manufacturing will be affected because farmers will not be able to buy farming equipment,” Dr. Musokotwane elaborated.
The drought has also led to a reduction in power supply, further straining the manufacturing sector. “These are some of the things hitting away from the expected growth that the country was envisaging for this year. So, it is a tough year,” he remarked.
Despite these challenges, Dr. Musokotwane expressed optimism about the country’s economic future. He noted that Zambia was emerging from a severe debt situation, which had also hampered economic growth.
He assured that the economic pressure would soon ease following the successful conclusion of the debt restructuring process and the revitalization of the mining sector.
“The economic pressure that the country is going through would soon be over,” he asserted, emphasizing the potential positive outcomes from the debt restructuring and mining sector improvements.
