2015年-世界发展银行全球_Zambia_Economic_Brief_December_2015___Powering_the_Zambian_Economy_34页_1mb

ZAMBIA ECONOMIC BRIEF SUMMARY

Core Content

This report, published by the World Bank Group in December 2015, provides an overview of the Zambian economy and highlights the challenges posed by the power sector. It outlines the economic developments in Sub-Saharan Africa (SSA) and the specific issues facing Zambia, including its reliance on copper exports, the impact of global commodity price declines, and the worsening power crisis.

Main Points

Regional Economic Developments

• Economic Growth Slowdown: SSA's economic growth is expected to slow to 3.7% in 2015 from 4.6% in 2014.
• Commodity Price Super Cycle End: The decline in oil, copper, and iron ore prices, combined with China's economic slowdown and tighter global financial conditions, has contributed to the growth deceleration.
• Current Account and Fiscal Imbalances: These imbalances have led to currency depreciation, particularly in resource-dependent economies.
• Inflationary Pressures: Inflation is expected to rise, with SSA's inflation rate projected at 6.5% in 2015.
• Debt Market Access: Low and lower-middle-income countries have increased access to international debt markets, but borrowing costs have risen sharply, especially for African countries.
• Eurobond Spreads: These have widened due to policy uncertainty and economic slowdown, with the greatest increases in countries with weak market confidence.

The State of the Zambian Economy

• Economic Challenges: Zambia faces its toughest economic challenges in at least a decade.
• Growth Decline: Economic growth is expected to drop below 4% in 2015 for the first time since 1998, leading to only marginal per capita income growth.
• External Pressures: Slower regional and global growth, especially in China (which buys 40% of global copper production), and a stronger US dollar have negatively impacted the economy.
• Domestic Pressures: A severe power crisis, repeated fiscal deficits, and poor agricultural yields due to low and poorly-timed rainfall have strained the economy.
• Copper Dependency: Copper accounts for 77% of Zambia's exports, and the fall in global copper prices (down 20% since 2011) has increased sectoral pressures.
• Mining Sector Impact: Mining companies are scaling back operations, leading to closures, delayed investments, and significant job losses (over 7,700 between January and November 2015).
• Agricultural Crisis: The 2014-15 agricultural season saw extensive rainfall deficits, leading to below-average vegetation and reduced production. El Niño is expected to continue affecting weather patterns into 2016.

Economic Outlook and Policy Challenges

• Short to Medium Term Outlook: GDP growth is expected to drop to 3–3.5% in 2016 and 2017, before returning to potential growth of 5–6% by 2018 as copper prices stabilize and domestic pressures ease.
• Downside Risks: External risks include further Chinese economic slowdown, which could depress copper prices, and the tightening of global financial conditions due to US Federal Reserve rate hikes. Domestic risks include worsening power crises, loss of investor confidence, and poor harvests.
• Fiscal Challenges: The government faces a large fiscal deficit and limited fiscal space, making it difficult to respond to economic pressures. The need to balance subsidies for fuel and electricity with fiscal adjustment is critical.
• Policy Recommendations:
  • Strengthen fiscal buffers and restore confidence through fiscal adjustment.
  • Implement structural reforms to improve the business environment and support private sector participation.
  • Avoid confusing messages and maintain transparent communication to sustain investor confidence.
  • Focus on diversification to reduce dependency on copper.
  • Address the power crisis through better planning, improved sector management, and efficient procurement processes.

Key Information

Power Sector Challenges

• Power Deficit: Electricity generation capacity has fallen below demand, leading to significant power outages.
• Load-Shedding: ZESCO has implemented rolling black-outs, with at least 8 hours per day of load-shedding for most consumers.
• Mining Load Curtailment: The mining industry has been requested to reduce its electricity consumption by 30%.
• Power Shortfall: A monthly deficit of around 591 MW (representing 34% of demand) is expected in 2015.
• Cost of Emergency Power: At current tariff rates, the government will need to provide an additional US$340 million in 2016 to cover emergency power costs.
• Hydropower Constraints: Reduced water levels at main reservoirs have exacerbated the power crisis, and even in a wet scenario, power shortages are expected to persist through 2018.

Fiscal and Economic Vulnerabilities

• Fiscal Deficits: Repeated fiscal deficits have reduced investor confidence and increased the need for costly borrowing.
• Debt to GDP Ratios: Countries like Ghana and Zambia have seen substantial increases in their debt to GDP ratios due to international borrowing.
• Inflationary Pressures: Inflation is expected to rise to 19.5% by the end of 2015, driven by rising food prices and weak currency.
• Currency Depreciation: The Zambian kwacha has depreciated significantly, contributing to inflation and reducing purchasing power.

Conclusion

Zambia's economy is under significant strain due to a combination of external and domestic challenges. The power crisis, driven by reduced hydropower generation and inadequate planning, has severely impacted economic activity and growth. Addressing these challenges requires a combination of fiscal adjustment, structural reforms, and improved sector management. The report emphasizes the need for a shift from reactive to anticipatory measures in the power sector and the importance of diversifying the economy to reduce vulnerability to copper price fluctuations.