Economy Round-Up – Inflation Up, Investor Confidence Fragile
Inflation is on the rise again, up from 7.1% in April 2017 to 7.4% in April 2018, although still firmly in single digits. The rise is understood to be as a result of the increase in food prices, particularly vegetables such as tomatoes and onions. According to the Central Statistical Office (CEO) the biggest provincial contributor to the rate is Lusaka, which accounts for 2.4% of the overall 7.4%, with Copperbelt province in second at 1.2%.
Meanwhile, international ratings agency Fitch has pointed to tax disputes with international mining companies and the uncertainty surrounding a potential deal with the IMF as key challenges facing the country, affecting the investment climate and confidence. Fitch stated that an IMF programme would support fiscal adjustment and make additional sources of long-term external financing available to Zambia. Other sovereign rating weaknesses including poor power provision and transport infrastructure, according to the ratings agency.
Earlier this week Libyan telecommunications company LAP GreenN said it is considering chasing Zambia’s offshore assets following default on repayment of $257 in compensation due as a result of the 2012 nationalization of Zamtel.