ZAMBIA’s overall balance of payments for 2015 and the current account balance are projected to register deficits.
This is as a result of reduced investment in sectors such mining, quarrying and manufacturing among others.
However, according to the 2015 Foreign Private Investment and investor perception survey, over the medium term, the easing of electricity constraints, recovery in the mining sector and an improved global economic environment will support stronger economic growth and help reverse current account and balance of payments deficits.
And the survey has revealed that Zambia’s net foreign direct investment inflows increased to US $3,194.9 million from US $1,690.5 million recorded in 2013 driven by a higher drawdown in Foreign Direct Investment assets.
The survey has however, shown that private sector foreign liabilities decreased by 17.2% to US $2,046.5 million compared to US $ 2,470.9 million recorded in 2013 and are expected to slow down in 2015 though projected to remain higher than 2014 levels.
The survey indicates that despite the challenging macroeconomic developments largely emanating from reduced demand and thus lower copper prices resulting in reduced copper export earnings, the Zambian economy still remains expectant of a rebound in foreign direct investment inflows given the attractive investment policies, significant investment in infrastructure development and continued peace and political stability.
And speaking during the dissemination of the findings, Bank of Zambia Governor Denny Kalyalya says the availability of robust data is undoubtedly a key factor in the formulation of appropriate and effective implementation of economic policies.
Dr. Kalyalya notes that the ongoing government economic reforms promoting private sector led growth continue to bear fruit as evidenced by notable amounts of both foreign and local investments.
He further states that the investment is critical in generating and sustaining growth and employment.