THE falling copper prices and the effect it has on the Zambian economy must motivate fresh impetus to diversify and reduce the overdependence on minerals, says Finnish Ambassador to Zambia Timo Olkkonen.
Ambassador Olkkonen said in an interview that the falling copper prices and shrinking demand from China had a huge impact on the Zambian economy hence the need to diversify.
He said more needed to be done in order to reduce Zambia’s dependence on copper and mineral exports.
He said investing more in sectors such as agriculture and tourism would help Zambia reduce the overdependence on copper and encourage diversification.
“The down turning in China and the falling copper prices and the effect it has on the economy shows that those attempts to diversify have not been successful enough because the falling copper prices and diminishing demand from China has the huge impact on the economy,” he said.
Ambassador Olkkonen also said the Zambian economy still had a chance to rebuild if the Kwacha continued to show some positive signs of recovery.
He said the Zambian economy would stabilise and inflation would decline if the local currency continued showing some positive signs of recovery.
“It is a positive sign that the kwacha has gained in strength but one has to remember that it is still a very weak currency in comparison with its reduction some months ago.
“So it is a positive sign and I do hope that to will stabilise and that means that the economy as a whole will be stabilised and inflation will not get any worse,” he said.
Meanwhile, ambassador Olkkonen said regulatory measures Government put in place to reserve some sectors for locals only were quiet heavy and tough for foreign investors especially that Zambia was an investment destination.
He said such regulatory measures raised many questions on where Zambia was going with regards to foreign investment.
“One other issue I know that investors are concerned about is regulations demanding Zambian ownership. I think they are quiet heavy and tough measures for Zambia as it is an investment destination.
“These regulatory measures raise question on where Zambia is going, if it needs to impose such regulations and what does it mean to foreign investors?” he asked.
Ambassador Olkkonen also said suspending some imported products may have repercussions on some of the exported Zambian products.
He explained that suspending and uplifting the suspension for some imported products created questions of inconsistency of and the long term of planning.