Business Monitor International


Zambia Business Forecast Report

Published 16 December 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:

  • Zambian ruling party the Patriotic Front (PF) is set for a fractious succession process in the lead-up to an election that will be held within 90 days of President Michael Sata's death on October 28.

  • Domestic demand will be the engine of the Zambian economy in 2015 as low copper prices and policy uncertainty weigh on the external sector. The presidential bi-election in January 2015 will be a key determinant of policy until the next full election in 2016 and this presents risks - predominantly to the downside - for our 2015 r eal GDP growth forecast of 7.0% .

  • The kwacha will trade in a largely sideways fashion at around ZMW6.400/USD over both short and long term as declining oil prices offset the impact that lower copper prices will have on the external accounts. Cautious monetary policy will also provide support for the currency. The risks are weighted to the downside.

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.

  • A meaningful shift to the left for policy could see investment flows decline, which would negatively impact growth, the currency and inflation.

  • Inclement weather could hamper agricultural production, which would send inflation higher and private consumption growth lower than we currently expect.

Forecast Table: 

Macroeconomic Forecasts (Zambia 2012-2015)
Indicator 2012 2013 2014f 2015f
Real GDP growth, % y-o-y 6.7 6.7 6.5 7.0
Nominal GDP, USDbn 24.7 26.1 25.9 29.1
Consumer price inflation, % y-o-y, eop 7.3 7.1 7.8 7.5
Exchange rate...

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 Index
7
Domestic Politics
8
Post-Sata PF Facing Leadership Questions
8
Zambian ruling party the Patriotic Front (PF) is set for a fractious succession process in the lead-up to an election that will be held within
Zambian ruling party the Patriotic Front (PF) is set for a fractious succession process in the lead-up to an election that will be held within
90 days of President Michael Sata's death on October 28
Long-Term Political Outlook
9
A Question Of Policy, Not Politics
9
Zambia boasts a competitive political environment that has been characterised by closely contested and increasingly freer and fairer
Zambia boasts a competitive political environment that has been characterised by closely contested and increasingly freer and fairer
elections (according to observers)
However, issues such as corruption and income inequality will require redress over the coming
decade, in order to keep Zambia on a progressive political and economic growth trajectory
Chapter 2: Economic Outlook
11
SWOT Analysis
11
BMI Economic Risk Index
11
Economic Activity
12
Domestic Demand To Drive Headline Growth In 2015
12
Domestic demand will be the engine of the Zambian economy in 2015 as low copper prices and policy uncertainty weigh on the external
Domestic demand will be the engine of the Zambian economy in 2015 as low copper prices and policy uncertainty weigh on the external
sector
The presidential bi-election in January 2015 will be a key determinant of policy until the next full election in 2016 and this
presents risks - predominantly to the downside - for our 2015 real GDP growth forecast of 7
TABLE: Economic Activity
12
Currency Forecast
13
ZMW: Stability In 2015 After Volatile 2014
13
The kwacha will trade in a largely sideways fashion at around ZMW6
400/USD over both short and long term as declining oil prices
offset the impact that lower copper prices will have on the external accounts
Cautious monetary policy will also provide support for the
currency
TABLE: BMI CURENCY FORECAST
13
Banking Sector
15
Looser Monetary Policy Will Boost Asset Growth
15
The Bank of Zambia has begun loosening monetary policy and this appears to have already given a boost to banking sector asset
The Bank of Zambia has begun loosening monetary policy and this appears to have already given a boost to banking sector asset
growth, which we forecast reach ing 20
Regional Article
16
Oil At USD60/bbl Would Be Negative For Region
16
Oil prices at USD60/bbl would have a harmful impact on Sub-Saharan Africa's economic growth outlook as the negative shock to the
Oil prices at USD60/bbl would have a harmful impact on Sub-Saharan Africa's economic growth outlook as the negative shock to the
region's net oil exporters would be greater than the boost received by net oil importers
Exporters would face deteriorating fiscal and
external positions with Sudan particularly at risk
Chapter 3: 10-Year Forecast
19
The Zambian Economy To 2023
19
Mines Both A Driver Of And Risk To Growth
19
On the back of an improving regional outlook and good prospects for the mining sector, we are projecting average annual growth of
On the back of an improving regional outlook and good prospects for the mining sector, we are projecting average annual growth of
6
Buoying this strong performance will be a strengthening private sector, as well as ongoing
investment in mining, agriculture and infrastructure, aided by a favourable business environment
TABLE: Long-Term Macroeconomic Forecasts
19
Chapter 4: Operational Risk
21
Operational Risk Index
21
Operational Risk
22
TABLE: Operational Risk
22
Transport Network
23
TABLE: Sub -Sahara n Africa - Tra nsport Networ k Ris k
24
Economic Openness
29
TABLE: Sub Saharan Africa - Economic Openness
30
TABLE: Top 5 Product Exported USDmn
31
TABLE: Top 5 Trade Partners Product Imports
32
Chapter 5: Key Sectors
35
Infrastructure
35
TABLE: Inbound Tourism
36
TABLE: Outbound Tourism
37
Other Key Sectors
41
TABLE: Pharma Sector Ke y Indicators
41
TABLE: Telecoms Sector Key Indicators
41
TABLE: Food and Drink Sector Key Indicators
42
TABLE: Autos Sector Key Indicators
42
Chapter 6: BMI Global Assumptions
43
Global Outlook
43
Warning Signs Growing
43
Table: Global Assumptions
43
Table : Developed States , Real GDP Growt H, %
44
Table : BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
44
Table : Emerging Markets , Real GDP Growth , %
45

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