Government says the Zambian economy in 2014 remained strong with preliminary real GDP growth of six percent making the country the seventh and tenth fastest growing economy in sub-Saharan Africa and the world respectively.
ZANIS reports that commenting on the state of the economy in 2014 in a statement released to ZANIS in Lusaka today, Finance Minister Alexander Chikwanda said the performance of the Zambian economy in 2014 has been consistent with government’s ongoing vision of transforming the country into a middle income prosperous nation.
Mr. Chikwanda noted that the positive performance of the nation’s economy was largely driven by the agriculture, manufacturing, construction, energy, transport, communication, and the financial sectors.
He said preliminary data shows that mining is expected to contract on account of operational challenges at some localities during the year under review.
He said considering that growth has been driven by the non-mining sectors, the achievement was clearly a reflection of the Government’s relentless efforts in diversifying the country’s sources of growth, income and employment.
Mr. Chikwanda said Government will continue with policies and strategies that will further consolidate the diversification of the economy, and in the process ensure resilience to any adverse external developments, such as those associated with volatile copper prices.
The Finance Minister also stated that over the medium term 2015 – 2017, real GDP growth is expected to escalate to an average of seven percent principally as a result of increased agriculture production, electricity generation, construction and growth in transport and communication.
He said for the long-term, it is government’s desire to sustain and increase this growth trajectory to double digits in order to ensure greater impact on poverty reduction, particularly in peri-urban and rural areas.
And Mr. Chikwanda said there is no cause for alarm over the developments in the mining sector despite some economic analysts raising concerns over the outlook in this area of the economy.
He said Government is confident that working in collaboration with mining companies, the concerns will not be insurmountable as they will be resolved with reciprocal amicability.
On VAT refunds, Mr. Chikwanda said Government remains committed to resolving the matter with mining houses and other sectors.
He disclosed that movement on the issue has been delayed on account of the court actions which some mining companies have instituted adding that it was government’s hope that the matter will be resolved in a manner that is mutually beneficial for both the country and mining companies.
He said for 2015, government has made provisions to cover normal VAT refunds as well as dismantling prior claims where sufficient documentation is provided.
Commenting on the 2015 Mining Tax Regime, Mr. Chikwanda said Government fully recognizes the reported concerns by some mines.
He said Government will within the framework of the existing statutes engage the concerned mines upon presentation of the likely adversity on their operations consistent with its desire to grow the economy, create jobs and alleviate poverty,.
He said this will be with the view to coming up with a common position that will ensure profitable continuity of operations at the respective mines while taking due consideration for the Zambian people to benefit from their natural resources.
Mr Chikwanda said the current tax structure is a final tax that has replaced the profit based tax which was largely illusory and disadvantageous to the country.
He stressed Government’s commitment to dialogue with mining houses as may be appropriate and has expressed confidence that the concerned mines are exploring ways of resolving those issues that are within their ability.