World Bank expects Zambia’s growth to slow

PUBLISHED: Tue, 10 Apr 2018 16:57:02 GMT

LUSAKA, April 10 (Reuters) – The World Bank said on Tuesday that Zambia’s economy is forecast to grow 4.1 percent in 2018 and 4.5 percent next year, lower than previous projections by the lender, because of the expected impact of poor rains.

Zambia is Africa’s No. 2. copper producer but is also heavily dependent on agriculture, much of it maize grown by small-scale farmers who rely on rainfall as they lack irrigation. “Our initial forecasts assumed that rainfall will be as good as the 2016-17 season. However this was not the case. The southern half of the country received poor rains,” said World Bank Zambia economist Zivanemoyo Chinzara.

“This is going to constrain 2018 and 2019 growth through lower agriculture yields and poor electricity generation. The inflationary impact of food prices could further restrain growth by weakening consumer demand.” In an economic report in December last year, the World Bank forecast that Zambia’s economy would grow 4.3 percent in 2018 and 4.7 percent in 2019.

Hydropower makes up more than 90 percent of Zambia’s energy mix and most of the power generated is used by mining companies. (Reporting by Chris Mfula Editing by Ed Stoddard/James Macharia)

Sign Up for Our Newsletter Daily Update
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.