Business Monitor International


Zambia Business Forecast Report

Published 26 March 2014

  • 47 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
Zambia Business Forecast Report

Core Views:

  • We retain our view that the Zambian economy will expand by 6.9% in 2014 up from an estimated 6.3% in 2013 thanks to strong private consumption, robust investment and resilient exports.

  • We are expecting Zambia's current account surplus to narrow in the years ahead thanks to high import demand and weak copper prices. Even though the current account will remain positive and we expect foreign direct investment to continue to flow in, we note that Zambia's external accounts are rendered vulnerable by significant 'other investment' outflows in the financial account.

  • Despite increasing from 7.1% in December 2013 to 7.3% in January 2014, we believe that Zambia's inflation outlook is relatively benign. We therefore expect the authorities to maintain the current monetary policy trajectory and to keep rates on hold at 9.75% for the year.

Major Forecast Changes:

  • No major forecast changes .

Key Risks To Outlook:

  • The most salient risks to Zambia's economy stem from global economic developments which directly impact the price of copper, Zambia's chief export, as well as the appetite for frontier market investment. If struggles in Europe, China, and other major markets are more or less pronounced than we currently anticipate, then our forecasts would be rendered either too optimistic or too negative.

  • We believe that President Michael Sata understands the importance of maintaining good relationships with foreign businesses and other private sector stakeholders. However, recent actions threaten Zambia's reputation for democratic stability, and if the situation worsens, businesses may become more wary.

  • There are also risks emanating from the agriculture sector. It is possible that subsidy removals will have a greater impact on maize production than we currently anticipate. If that turns out to be the case, we would expect private consumption - and by extension headline growth - to come in lower than we are presently forecasting. Similarly...

Table of Contents

Executive Summary
5
Core Views
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Ratings
7
Domestic Politics
8
Sata 'Authoritarianism' Tested In Constitutional Review
8
Table: Political Overview
8
Long-Term Political Outlook
9
A Question Of Policy, Not Politics
9
Chapter 2: Economic Outlook
11
SWOT Analysis
11
BMI Economic Risk Ratings
11
Economic Activity
12
Growth To Increase In 2014
12
table: ECONOMIC ACTIVITY
12
Balance Of Payments
13
Current Account Surplus To Narrow
13
table: MONETARY POLICY
14
Monetary Policy
15
Little Sign Of Inflationary Pressure
15
TABLE: CURRENT ACCOUNT
16
Exchange Rate Policy
17
Kwacha: Depreciatory Pressure To Ease
17
TABLE:BMI CURRENCY FORECAST
17
Chapter 3: 10-Year Forecast
21
The Zambian Economy To 2023
21
Mines Both A Driver Of And Risk To Growth
21
table: Long-Term Macroeconomic Forecasts
21
Chapter 4: Business Environment
23
SWOT Analysis
23
BMI Business Environment Risk Ratings
23
Business Environment Outlook
24
Institutions
24
TABLE: BMI BUSINESS AND OPERATION RISK RATINGS
24
Table: BMI LEGAL FRAMEWORK RATING
25
Table: LABOUR FORCE QUALITY
26
Infrastructure
27
TABLE: ANNUAL FDI INFLOWS
27
Table: TRADE AND INVESTMENT RATINGS
28
Market Orientation
29
Operational Risk
30
Table: Top Export Destinations, 2002-2009
30
Chapter 5: Key Sectors
33
Food And Drink
33
table: Food Consumptio n Indic ato rs - Histo ric al Data & Forec asts , 2011-2018
33
table: Mass Groce ry Ret ail Sales - Histo ric al Data & Forec asts , 2011-2018
34
Other Key Sectors
35
table: Pharma Secto r Key Indic ato rs
35
table: Telecoms Sector Key Indicators
35
table: Infrastructure Sector Key Indicators
35
Chapter 6: BMI Global Assumptions
37
Global Outlook
37
Global Growth Optimism Turning To Disappointment
37
Table: Global Assumptions
37
Table: Developed States , Re al GDP Growt H, %
38
Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
38
Table: Eme rgi ng Markets , Re al GDP Growth , %
39

The Zambia Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in The Zambia and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market..

An influential new analysis of The Zambia's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of The Zambia's economic and industry growth through end-2017.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise The Zambia's country risks against regional peers using BMI's country comparative Risk Ratings system.
  • Evaluate external threats to doing business in The Zambia, including currency volatility, the commodity price boom and protectionist policies.

The Zambia Business Forecast Report by Business Monitor International (BMI) includes three major sections: Economic Outlook, Political Outlook and Business Environment.

Economic Outlook:

How will the Zambian economic policy-making and performance impact on corporate profitability over 2013-2017?

BMI provides our fully independent 5-year forecasts for The Zambia through end-2017 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Zambia Business Forecast Report features BMI's forecasts with supporting analysis for 2013 through to end-2017, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Ratings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2017 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for The Zambia and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on The Zambia, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in The Zambia over the next 5-years?

BMI's The Zambia country Risk Ratings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Zambian Market - Political Strengths, Weaknesses, Opportunities and Threats facing The Zambia.
  • Political Stability and Risk Assessment - BMI's Risk Ratings assess explicit short- and long-term risks to political stability; latest ratings, rankings and trends for The Zambia's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark The Zambia's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Business Environment

Business Environment Risk Ratings with SWOT Analysis - Business environment Risk Ratings for The Zambia, benchmarked against ratings for regional neighbours.

Country Competitiveness - Competitiveness of The Zambia's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Ratings.

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Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express