2017年-世界发展银行全球_Zambia_Economic_Brief_No_10_December_2017___How_Zambia_Can_Borrow_Without_Sorrow_46页_1mb

ZAMBIA ECONOMIC BRIEF Summary

Core Content

This report, How Zambia Can Borrow Without Sorrow, is the tenth Zambia Economic Brief by the World Bank Group. It provides an analysis of recent economic developments in Zambia and Sub-Saharan Africa (SSA), as well as recommendations for sustainable borrowing and improved debt management.

The document outlines key economic indicators, challenges, and potential reforms to ensure that Zambia can manage its debt effectively and use borrowed funds to drive inclusive growth.

Main Views

1. Regional Economic Developments

• Economic Recovery: Sub-Saharan Africa (SSA) continued its economic recovery in 2017 after a slump in 2015 and 2016.
• Growth Forecast: SSA is expected to grow at 2.4% in 2017, up from 1.3% in 2016, but still below population growth (2.7%).
• Drivers of Growth: Recovery is supported by improved global conditions, higher commodity prices, and eased domestic constraints.
• Key Countries: Nigeria, South Africa, and Angola are major contributors to regional growth, accounting for over 60% of SSA output.
• Downside Risks: The outlook is subject to risks such as slower-than-expected recovery in key economies, global financial tightening, and political instability.

2. The State of the Zambian Economy

• Economic Recovery: Zambia's economy showed signs of recovery in 2017, but growth remained modest at 3.8%, up from 3.6% in 2016.
• Sector Performance:
  • Agriculture, electricity, and transport saw strong growth.
  • Services, mining, and construction performed weakly, especially in the first half of 2017.
• Fiscal Deficit: The government aimed for a 7% fiscal deficit (cash basis) in 2017, but it is expected to be slightly above at 7.6%.
• Debt Levels: Public sector and publicly guaranteed debt reached 60.5% of GDP in 2016, up from 35.6% in 2014.
• Exchange Rate: The Zambian Kwacha (ZMW) stabilized in 2017, with a 10.3% appreciation from January to July 2017, but then depreciated by 11.9% by November 2017.
• Inflation: Inflation remained within the 6–8% target range set by the Bank of Zambia (BoZ) since December 2016.
• Debt Management: There are concerns about non-performing loans and fiscal slippages, which have raised the risk of debt distress.

3. Economic Outlook and Policy Challenges

• Growth Forecast: Zambia's GDP growth is expected to rise to 4.3% in 2018 and 4.7% in 2019, with a moderate increase in commodity prices and reforms to address macroeconomic imbalances.
• Downside Risks:
  • External: Potential slowdown in China could reduce commodity prices; faster normalization of U.S. interest rates could tighten global financing.
  • Domestic: Delays in fiscal reforms and political instability could hinder growth and worsen debt management.
• Policy Challenges:
  • Fiscal Consolidation: Needs to be accelerated to improve debt sustainability.
  • Debt Management: Requires a more active and strategic approach to borrowing.
  • Public Investment: Must be better aligned with growth objectives and more transparent.

Key Information

Debt and Investment

• Debt Levels: Public debt rose to 60.5% of GDP in 2016, indicating a high risk of debt distress.
• Eurobonds: The government issued Eurobonds, but investment plans were not fully detailed for the third bond.
• Investment Efficiency: There are concerns that borrowed funds may be used for government consumption rather than productive investment.
• Roads as an Indicator: The cost of road construction in Zambia is significantly higher than regional averages, suggesting inefficiencies in public investment.

Debt Management and Borrowing Strategy

• Active Debt Management: The government needs to shift from a passive to an active approach, which includes:
  • Improving and annually updating the debt strategy.
  • Reorganizing the Debt Management Office (DMO).
  • Formulating a debt management reform plan.
  • Strengthening public investment management.
• Fiscal Adjustments: To reduce debt accumulation, the government should:
  • Halt new non-concessional borrowing.
  • Focus on fiscal fitness and inclusive growth.
  • Consider buying back Eurobond debt to reduce refinancing risks and extend maturities.

Recommendations

• Improve Debt Management: Develop a more strategic and active approach to borrowing.
• Enhance Fiscal Discipline: Ensure that fiscal adjustments are implemented on time to reduce debt and improve market sentiment.
• Boost Revenue Collection: Strengthen tax systems and improve public financial management (PFM) to increase government revenue.
• Ensure Efficient Investment: Link borrowed funds to specific, productive projects and improve public investment management (PIM).
• Promote Inclusive Growth: Focus on rural development and job creation to ensure that economic growth benefits all segments of the population.

Conclusion

Zambia has made progress in economic recovery, but faces significant debt sustainability challenges. The report emphasizes the need for a strategic and active approach to debt management, fiscal discipline, and efficient public investment to ensure inclusive and sustainable growth. The government must take bold actions to address these issues and avoid future economic distress.