GOVERNMENT through deliberate interventions managed to stabilize the exchange rate and control inflation, thereby retaining investor confidence, says Committee of Citizens former executive director Gregory Chifire.
Mr Chifire said the central bank was instrumental in helping stabilize the volatile currency, saying the Kwacha was particularly vulnerable because it was one of the globe’s most highly traded emerging market currencies.
He said President Edgar Lungu’s performance in the first year in office as President has been encouraging, despite coming into office at a very challenging time when economies of the world faced a downturn because of the slowdown in China’s economic growth.
“Despite all these challenges and relative strength in the US dollar and electricity shortages due to poor maintenance of the national grid by previous governments, President Lungu managed Zambia that saw positive economic growth,” he said.
He said economies that relied on the sale of commodities such as Zambia where hit by the economic slowdown in China, a major source of demand and Zambia’s number one trading partner. The weakening of the Chinese economy affected the demand for Zambia’s copper, thereby leading to investors in the mining sector cutting down on labour requirements.
Mr Chifire said the loss of jobs in the mining sector should therefore not be politicized as it has nothing to do with Government policy, saying Zambia’s problems were compounded when China unexpectedly devalued its currency in the second half of 2015.
Mr Chifire said it was encouraging that the Government had taken a leading role to promote diversification from reliance on mining to agriculture and tourism.
“It is gratifying to note that Government has taken a leading role in encouraging diversification from reliance on copper to agriculture and tourism as evidenced from the continued use of the FISP programme and investment in the tourism sector.