2016年-世界发展银行全球_Zambia_Economic_Brief_June_2016_Issue_7___Beating_the_Slowdown--Making_Every_Kwacha_Count_34页_1mb

ZAMBIA ECONOMIC BRIEF SUMMARY

Core Content

This Zambia Economic Brief (July 2016) by the World Bank Group examines the economic challenges facing Zambia and proposes strategies to enhance the efficiency and inclusiveness of public expenditure in order to "make every kwacha count". The report highlights the impact of commodity price shocks, particularly the decline in copper prices, on the Zambian economy, and underscores the need for fiscal adjustment and structural reforms to support long-term growth and poverty reduction.

Main Points

1. Economic Slowdown in Zambia and Sub-Saharan Africa (SSA)

• The Zambian economy slowed to 3.2% GDP growth in 2015, marking its toughest economic challenges in at least a decade.
• Copper prices have fallen by 52% since their peak in Q1 2011, significantly impacting the economy, which relies on copper for 77% of its exports.
• Sub-Saharan Africa experienced a slower growth rate in 2015 (3.0%) compared to 2014 (4.5%), with commodity prices remaining low and global growth also weakening.

2. Regional Economic Developments

• The external environment for SSA remains challenging, with commodity prices continuing to be low and growth prospects constrained.
• China's slowdown and rebalancing toward consumption and services have had a ripple effect on the global economy, especially on commodity-dependent countries like Zambia.
• Non-energy commodity prices, such as iron ore, platinum, and copper, have declined sharply, with oil prices falling by 57% from US$112 per barrel in 2014 to US$47 per barrel in 2016.
• Fiscal imbalances have worsened in many SSA countries, leading to currency depreciation and increased borrowing costs.

3. Zambia's Economic Outlook

• GDP growth is expected to remain close to 3.0% in 2016, before improving to 4.2% in 2017 and 5.0% in 2018, assuming new power generation capacity and better harvests.
• Downside risks include:
  • Further decline in copper prices
  • Weaker growth in China
  • Tighter global financing conditions
  • Continued power crisis and fiscal deficits
• Domestic risks include:
  • Persistent power shortages
  • Limited fiscal adjustment
  • High borrowing costs and uncertainty in policy responses
  • Inflationary pressures from exchange rate depreciation

4. Poverty and Inequality

• Despite an average GDP growth of 7.4% between 2004 and 2014, poverty reduction has been marginal.
• 54.4% of Zambians were defined as poor in 2015, and 40.8% were in extreme poverty.
• Poverty is largely a rural phenomenon, with 77% of the poorest households located in rural areas.
• Educational outcomes have not improved significantly, with Grade 5 learning levels unchanged and learning linked to parental income.

5. Fiscal and Monetary Policy Challenges

• Fiscal deficits have grown, and monetary policy has been used to control inflation.
• Fuel and electricity subsidies have placed significant pressure on the budget, with fuel subsidies averaging US$36 million per month and electricity subsidies around US$26 million per month.
• Exchange rate depreciation has increased the cost of imported goods and inputs, leading to higher inflation (which peaked at over 20% in 2016).
• The Zambian Kwacha (ZMW) has depreciated against the US Dollar (US$), worsening the import bill and inflationary pressures.

6. Policy Recommendations

• Fiscal adjustment is necessary to reduce the budget deficit and improve the quality of public expenditure.
• Fuel and electricity subsidies should be eliminated or reduced to improve fiscal sustainability.
• Social Cash Transfer (SCT) systems should be scaled up to protect the poor during the transition.
• A review of public expenditure in key sectors is needed to identify inefficiencies and reallocate resources.
• Structural reforms are required to diversify the economy and improve the business environment.
• The Seventh National Development Plan provides a good opportunity to implement these reforms and make growth more inclusive.

Key Information

• Copper price decline: 52% since Q1 2011, severely affecting the economy.
• Exchange rate depreciation: ZMW has depreciated against the US$, increasing import costs and inflation.
• Fuel and electricity subsidies: Cost the government around US$576 million between September 2015 and May 2016.
• Poverty rates: 54.4% of the population were poor in 2015, with 77% of the poorest households in rural areas.
• GDP growth forecast: 3.0% in 2016, 4.2% in 2017, and 5.0% in 2018.
• Power crisis: A significant domestic challenge, with load-shedding reaching 8 hours per day in 2015, and a 1,000MW power deficit in March 2016.
• Fiscal deficits: Continued to rise, complicating macroeconomic stability and investor confidence.
• Import dependency: High due to the depreciation of the kwacha, increasing the cost of final goods and inputs.
• Inflation: Peaked at over 20% in 2016, but has started to decelerate.

Conclusion

The Zambia Economic Brief emphasizes the need for fiscal discipline, efficient public spending, and structural reforms to overcome the slowdown and achieve more inclusive growth. The focus on "making every kwacha count" is critical to reducing poverty, improving economic resilience, and sustaining long-term development. The World Bank recommends transparent budgeting, reforms in the power sector, and enhanced dialogue with stakeholders to ensure policy credibility and investment confidence.