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Government has assured the nation that the economy was poised to be in a strong position this year, despite slumps recorded such as the run-away exchange rate and the current drought being experienced.
Finance and National Planning Minister, Situmbeko Musokotwane, explained that the drag on the economy in the past few years, which also reflected on the exchange rate, high cost of living and poverty was due to the absence of normal production at Konkola Copper Mine (KCM) and Mopani Copper Mines.
In his Ministerial statement on the performance of the economy made in Parliament on Friday, Musokotwane said the two mining giants were now very close to resuming normal operations, which would revive lives on the Copperbelt and the rest of Zambia.
“On top of that, the expansions taking place at FQM, Lumwana and the anticipated new mines will in a few years put Zambia on a different scale of development,” he said.
On the depreciation of the Kwacha, Musokotwane stated that this was well beyond expectations, acknowledging that the situation had brought about some economic problems.
According to the Minister, the most important driver of the exchange rate had been the drop-in copper production in 2023, resulting in reduced inflows of foreign exchange.
He also attributed the shock to the exchange rate largely to problems in the mining sector, saying this had been a temporal problem which government had resolved.
“Going forward the people of Zambia should feel comfortable that the future is bright.
“On account of the mining sector alone, without considering other sectors, concrete steps will soon be visible as production towards the three million tonnes target takes shape,” Musokotwane said.
He also talked about the drought during the current agricultural season, which he acknowledged was one of the worst in living memory with many of citizens in different provinces facing their worst food insecurity calamities.
As such, Musokotwane said, government would be left with no choice but to propose adjustments to the 2024 budget so that financing room was created to enable the financing of the vulnerable households.
He stated that government would this year ensure that all citizens were food secure.
“The challenge of food security is not alone. Our national dependency on hydroelectricity equally means that in this year of drought, power will become limited unless we find alternatives. As in the case of food security, the Treasury awaits response proposals to guide how the 2024 budget will be adjusted.
“Given the imperatives arising from the drought calamity, the need for judicious care of our limited financial resources has never been more important.
“That being the case, requests for supplementary budget or requests for subsidies of any sort will not fly,” he concluded.
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