FORMER Bank of Zambia (BoZ) governor Dr Caleb Fundanga says there is need for government to aim at consistently achieving a higher GDP growth rate if Zambia is to see a change in the economy.
In an interview, Wednesday, Dr Fundanga said it was a source of worry whenever the growth rate was lower than population growth.
“The only thing that one can say is that what we should be aiming for as a country, if you go back to those days when we were achieving something like five, six percent, those are the numbers that will lift the country out of this sluggish we are in, in recent times and help the GDP to grow so that poverty can be addressed. If the population growth is higher than the GDP growth, you should be worried. If the GDP growth is higher than the population growth, at least, but the extent to which it is higher is what matters more,” he said.
“For us, if we really want to become a giant economically, we should be aiming at higher levels of growth. So you need to ask what kind of economic activities can help the country move to a growth rate of above five, things like six, seven, eight, nine, 10. What should be happening to the country to move the growth rate of the country to those higher levels? Because if you do consistently for three, four, five years, you will see the difference. But around low levels; three, two, you can’t change the fate of the economy. So this is what we are hoping that the policies of the government can facilitate.”
And Dr Fundanga said people should not just be praying for a single-digit exchange rate but continuous improvement in the economy.
“I would expect that if there is a deal with the fund which will entail them giving us some support, it will certainly have an impact. Why not? By definition, it is going to affect a lot of things, possibly the physical availability of the results and also movement in the markets. So we should all be fighting hard so that they reach that deal as quickly as possible. You know to reach a single digit is a journey, it does not happen in a flash. You have seen that inflation has been coming down and that is a key to ensuring that we move towards single digit,” said Dr Fundanga.
“At least so far even at K18 we are better off than the K22 we were at before the government came into office. So I would expect that but it takes time to reach single digit. And I think that we should not just be praying for single digit but continuous improvement in the economy. Because even when you reach a single digit and there is no improvement taking place, you could find yourselves bouncing back. I would not start talking about single digits right now because there is still some time to go. What takes you to single digit is consistent policies. It is a journey but not very long, not a lifetime journey.”