By BUUMBA CHIMBULU
ZAMBIA needs to harness renewable capital unlike depending on copper which creates volatility in the economy once exposed to external shocks, the World Bank has said.
The bank which has revised downwards Zambia’s Gross Domestic Product (GDP) growth for 2019 to 2.5 percent from 3.3 percent has emphasised the need for Zambia to diversify beyond copper. Renewable capital includes forestry, land and fisheries among others.
World Bank senior economist, Samson Kwalingana, said reliance on minerals such as copper for growth was unsustainable.
The over reliance on copper mining for growth, he said, suggested that Zambia had not built a balanced portfolio assets that was likely to support strong economic growth in future.
Mr Kwalingana was speaking yesterday in Lusaka during the launch of the 12th Economic Brief under the theme “Wealth Beyond Mining: Leverage Renewable Natural Capital.”
“While the contribution of renewable resources like agriculture, forestry and fishing to GDP has declined in recent years, the sector’s linkages with the rest of the economy remain significant,” Mr Kwalingana said.
In 2014, Zambia’s total wealth was US $644 billion of which 40 per cent was natural capital. Mr Kwalingana said given the importance of natural capital in Zambia’s economy, recognising its value and managing it appropriately was important.
He also said Zambia’s GDP growth was forecast to slow to 2.5percent this year and remain below 3.0percent over the medium term due to the impact of low crop harvest and the deteriorating fiscal environment.
“However, in the absence of strong macroeconomic adjustment, growth is projected to remain under 3.0 percent,” Mr Kwalingana said.
He however said the agriculture sector was expected to pick up in the medium term as new irritation project were implemented.
And the bank’s chief economist for Africa, Albert Zeufack, emphasised that diversification would protect the Zambian economy from external stocks.
Dr Zeufack said harnessing renewable capital remained critical to growing the Zambian economy.
“Zambia needs to put in place bold reforms.
Economic diversification hedges against volatilities,” Dr Zeufack said.
He also urged Zambia to avoid paying high costs on debt by ensuring that the terms and conditions were clear and beneficial for the country.