Ten key points from minister of Finance’s state of the economy statement

Ten key points from minister of Finance’s state of the economy statement

Compiled By: B. Kafwanka

1.External debt increased from $10.23 in June, 2019 to $11.2bn at the end of December, 2019

2.Domestic debt increased from K60.3bn in June, 2019 to K80.2bn at the end of December, 2019

3.Domestic arrears increased from K20.2bn at the end of June 2019 to K26.2bn at the end of December, 2019

4.Inflation rose from 7.9% at the end of December, 2018 to 11.7% at the end of December, 2019

5.Monetary policy rate was adjusted upwards from 10.25% to 11.5%. Statutory Reserve ratio was adjusted upwards from 5% to 9% at the end of December, 2019

6.Commercial bank average lending rates rose from 25.4% to 28% in December, 2019

7.The Kwacha averaged K13.86 per US Dollar in the last quarter of 2019 from 11.9% at the end of December, 2018

8. Gross international reserves increased from $1.41bn at the end of June, 2019 to $1.45bn at the end of December, 2019

9.Economic growth in 2020 is expected to be above 3%.

10.Government had formal meetings with the IMF in the last quarter of 2019. Government will continue addressing some of the issues raised by the IMF around debt sustainability and continue implementing austerity measures hoping to clinch a deal.

Detailed analysis will follow later.

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  • comment-avatar
    Nyambe the Hero 2 weeks ago

    In short things are getting worse not better.

    I agree lending rates are actually much higher because commercial banks add a so-called margin plus you have to add other hidden costs like registering legal charges on assets like buildings pledged as loan collateral.

    The next government has a mammoth task.

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    GDP at 2%, this means very little goods and services are being produced and explains why there is massive unemployment especially among youths. Inflation has been understated the actual figure is more than 20% going by the high cost of living. Lending rates averaging 28.0 percent but the actual rates depending on the borrower is more than 50 % that the banks are charging. With rates so high this makes investing in Zambia an unattractive proposition. This is a very deep hole PF thieves have dug and have no capacity to dig us out. The cause has been indiscipline on expenditure which has continued unabated.

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    It’s not about you Minister 2 weeks ago

    Minister well articulated! But you are a late comer in this game we are losing everyday. We wish you well Minister, but to be very honest, most of us doubt whether you will deliver under a Govt that has a habit of sending msgs to Zambians & the international community that they are married to  bad governance by creating many unfortunate perceptions every day. As citizens we have stopped talking & just watch them destroy our once beautiful country expecting that at least just once, they will display Good Governance. In short we have given up hope!  

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    Steve 2 weeks ago

    I hope IMF hold off giving PF the funds they’re asking for. It would be the retirement final bumper harvest of theft before elections. I don’t trust PF nor should IMF. what we need are a few resources for the most vulnerable which can be managed by another agency. Probably not a UN agency. The overhead cost of using the UN will be the same as the amount PF will steal.

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    Mwenya 2 weeks ago

    Bafigili Nabafilwa…
    Not Mr. Ngandu’s fault…
    A PF and ECL failure…

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    The above picture is considered great and rosy. Isn’t it amazing?