STANBIC Bank Zambia has projected a stronger and more stable economy in the country this year following shocks it suffered in 2015 and 2016.
Bank head of global markets Victor Chileshe said the current economic trajectory showed that Zambia was effectively dealing with the economic shocks it suffered over the last two years from power deficits, low copper prices, weak exchange rates as well as the general elections that caused economic uncertainty.
Speaking to the media on Friday at the conclusion of Stanbic’s Mining and Economic Roadshows held last week in North-Western, Copperbelt and Lusaka provinces, Chileshe said the economy was projected to grow by 4.2 per cent this year, and key to this was what happened in the mining sector.
“We have had more rains and we are likely to have more consistent power supply to the mines. Copper prices are also likely to hold firm. Overall, we don’t see the shocks of 2015 and 2016 coming through this year and the extractive industries can now focus on driving their efficiencies and making their operations more robust to be able to survive any price eventualities the London Metal Exchange will bring to them,” Chileshe said.
Copper prices have held firmly above US$5,500 per metric tonne after dipping below US$4,500 around June 2016, and Chileshe said the bank projected prices to breach US$6,500 later in 2017.
He also said the bank’s view was strengthened by happenings in the global economy, with an expected growth in refined copper production in China, the world’s largest consumer of copper.
Chileshe said Stanbic Bank also expected the local currency to be fairly stable this year on the back of a stable mining industry.
“We’ll see a bit of depreciation here and there but those will be sideward movements. We don’t see definite up and down movements. This will help businesses plan better,” said Chileshe.
And Stanbic’s head of corporate and investment banking Helen Lubamba said the bank was seeing some green shoots that played a key role in informing its optimism for 2017.
Lubamba added that for Zambia to leverage its current economic position, it needed to improve its local manufacturing and rump up exports to earn more foreign exchange.