Zambia’s economy to grow 4.3 percent, copper output easing slightly in 2017

LUSAKA (Capital Markets in Africa) – Zambia’s economy will grow 4.3 percent this year and 5.1 percent in 2018, boosted by improved agriculture and mining output and a recovery in electricity generation, the central bank reported. “There has been strengthening confidence in Zambia’s medium to long-term economic prospects as reflected by the participation of non-resident investors in the Government securities markets,” the Bank of Zambia hinted in a report surveying the first half of 2017.

Zambia’s economy will grow by 5.0 percent in 2018, 5.1 percent in 2019 and 6.1 percent in 2020, up from 4.3 percent in 2017, the ministry of finance said in a statement. The country’s fiscal deficit is expected to be 7.0 percent in 2017, 6.3 percent in 2018 and 4.3 percent in 2019, then drop to 2.6 percent in 2020. Inflation is expected to remain 6 to 8 percent from 2017 to 2020, the statement reported.

More so, Zambia’s copper production is expected to inch lower this year mainly due to lower output from Konkola Copper Mines, a subsidiary of London-listed Vedanta Resource, the mines ministry reported.

Total copper production is forecast to fall to 753,992 tonnes from 774,290 in 2016, Ministry of Mines Permanent Secretary Paul Chanda told reporters.

Production at Konkola Copper Mines will fall by 40 percent while output at Lumwana Mine, owned by Barrick Gold, should decline by 15 percent, Chanda added.

“Konkola Copper Mines appear to be more experienced in processing than mining and as for Lumwana it is because of declining ore grades,” Chanda told Reuters.

The government had said in June that copper production was expected to rise to 850,000 tonnes in 2017 owing to expansion at existing mines and ongoing greenfield projects.

The Zambia Chamber of Mines, an industry body, said output would depend on power supply, infrastructure and stability of the fiscal and regulatory regime.

“Resolution of the pricing and provision of power remain paramount to the immediate future of mining in Zambia,” Chamber of Mines President Nathan Chishimba told Reuters on Monday.

Glencore’s Zambian unit Mopani Copper Mines will pay increased electricity prices caused by the removal of state energy subsidies, the mines minister said .

Source: Reuters Business News