ZAMBIA: 2012 ECONOMIC PERFORMANCE

THIS week we focus on some of the highlights of the 2012 economic performance on the local scene as accentuated in the just released 2012 Annual Economic Report. The report by the Ministry of Finance indicates that the Zambian economy performed well in 2012 despite the decline in the prices of commodities like copper. Improvements in agriculture, energy, transport and communications drove the real Gross Domestic Product (GDP) leading to positive growth rate of 7.3 per cent. Three other major sectors, mining, manufacturing and tourism, however, recorded a slump in their growths for various reasons, which I will look at later. Despite recording a surplus in the aggregate balance of payment, Zambia posted a deficit of US $53.1 million in current account. The figures show that the total area planted for most of the major crops, save maize, went up by almost four per cent to 2.2 million hectares in the 2011/12 farming season. That total area planted was from the 2.094 million hectares in the 2010/11 season. For maize, however, the yield declined by 5.6 per cent, consistent with the decrease in the area planted for the crop during that season. The electricity generation grew by 5.5 per cent from 12,271,385 mwh in 2011 to 12,952178 mwh. Obviously that growth still fell short of the total annual demand for power, otherwise the load shedding we are still experiencing could have ended. The power supply is always outstripped by demand, despite the increase in generation, because of the number of private and public development projects coming up which all require electricity. The supply in the petroleum products recorded a11.4-per cent upsurge. This followed the rise in the importation of feedstock which was triggered by higher consumption. In the transport and communications sector, aircraft and passenger movements went up mainly for the entry into the sector of new airlines, coupled with the opening of new routes and increased frequency by existing ones. The total number of registered motor vehicles and trailers rose by 30.6 per cent from 381,948 in 2011 to 498,674. The railway sector, however, continued to fall and recorded reduced number of passengers from more than one million in 2011 to about 910,000. In communications, the mobile telephone subscription went up by about 29 per cent to 10.5 million from 8.2 million in 2011. In the mining sector, the total copper production also recorded a 4.1-per cent decline from the 819,574 tonnes in 2011 to 785, 642 tonnes. This fall could mainly be attributed to fall in contribution by the small scale sector which posted drastic sag in output while the major mines registered an increase which was, however, not enough to offset that negative effect. Coal and gold posted better production during the year but again that was not adequate to maintain the 2011 production for the sector resulting in the lower overall production. For the manufacturing sector, based on the third quarter index of the industrial production, the sector registered almost two-per cent decline in production as compared to the 2011’s 10.2 per cent positive growth. The growth was driven by the strong performance in the production of food, beverages and tobacco subsectors. Furthermore, the number of tourist arrivals shrunk by 6.7 per cent to 859,088 from 920,299 in 2011 reportedly due to the reduced number of visitors from North America, South America and Europe. This could be because of the financial crisis in the Euro-zone which affected people in most of the developed countries. The much-orchestrated one million tourist arrival per year therefore remained a mere dream, although that could be achieved this year given the developments in the sector. In the next one week or two, I will take the discussion further by looking at the performance of the social sector in 2012, budget performance, domestic debts and generally the trends in the domestic economy, zeroing in on the specific real sector developments. *****

BlogThis!