The “boom and bust” cycle of the international copper trade has once more left Zambia down, down on the ground and groaning! She had a quick escape from the commodity price slump that accompanied the global economic downturn of 2008 as demand rapidly recovered. But there promises to be no such respite this time.
The economy is in upheaval.Most economic indicators are down and staying down. Copper production and exports have declined sharply. Inflation has jumped to its highest in years. At 14.3% in October, it has gone into double digits for the first time in many years.
The central bank, the Bank of Zambia(BoZ) is fire-fighting and has tightened monetary policy raising the BoZ Policy Rate to 15.5% from 12.5%.It has also removed the caps on lending rates in order to try and rein in inflation. But this is more likely to put the harrowed SMEs in difficulties.
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