Minister of Finance says Zambia’s Gross Domestic Product (GDP) is projected to grow by 2 percent from the projected 3.2 in the 2020 national budget as a result of Covid-19.

Speaking when he addressed that nation on Developments of the Economy, Dr. Bwalya Ng’andu also mentioned that revenuers projected in the 2020 national budget are expected to be lower due to the epidemic.

“In view of the recent developments, growth is now projected to be lower at around 2 percent despite the anticipated significant recovery in the agricultural sector, the tourism, mining, manufacturing, construction as well as wholesale and retail trade sectors are projected to slow down on account of the pandemic,” Dr Bwalya said.

Dr Ng’andu disclosed that the Kwacha has depreciated by more than 20 percent to around K17.50 per US dollar.

The finance minister further said COVID-19 has disrupted international trade in terms of both volumes and commodity prices. Collections of trade taxes are expected to be lower than projected in the first quarter of the year and most likely, beyond.

Dr Bwalya explained that there is also disruption to cross border supply chains given Zambia’s close trading relations in the region.
“This will have a significant negative impact on small and medium scale businesses,” He said.

The Minster further says preliminary information indicates that there is a significant reduction in imports from China, which has emerged as a major trading partner, both in dollar terms and volumes in February 2020 compared to February 2019.

He added that, in March 2020 the volumes of imports from India, Japan, Kenya, Namibia and Tanzania have declined relative to March 2019.

“Given the lock down announced by South Africa, imports from that country will decline further with direct adverse impact on wholesale and retail trade, manufacturing and mining, Dr Ng’andu explained.

“To this end, revenue collections in the form of VAT and Customs Duty for March 2020 are expected to be below target by 25 percent”

He noted that in order to finance the response towards COVID-19, Government has taken the measures to set up an Epidemic Preparedness Fund under the Ministry of Health amounting to K57 million.

“Cabinet approved a COVID-19 Contingency and Response Plan with a budget of K659 million under the Disaster Management and Mitigation Unit,”Dr Ng’andu said.

He further said Government has started mobilizing funds through the budget and engagement with various local and international stakeholders.