Business Monitor International


Zambia Business Forecast Report

Published 24 September 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:

  • The threat posed to the Zambian economy by currency weakness has subsided over recent months and we maintain our 2014 and 2015 real GDP growth forecasts at 6.7% and 7.0% respectively. Domestic demand is set to be the main engine of this expansion.

  • Zambia's monetary authorities will reverse some of the extraordinary tightening measures introduced to support the currency in H114 amid signs that the kwacha has stabilised. However, the benchmark policy rate will be held at 12.00% for 2014 and 2015 owing to lingering price and currency pressures.

  • Zambia's current account will fall into deficit in 2014 and remain in the red over the remainder of our forecast period to 2023 thanks to falling copper prices and subdued copper production growth. A balance of payments crisis will be prevented by foreign direct inflows.

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
National Sources/BMI
Real GDP growth, % y-o-y 6.7 6.7 6.7 7.0
Nominal GDP, USDbn 24.7 26.1 27.0 28.9
Consumer price inflation, % y-o-y, eop 7.3 7.1 9.3 8.0
Exchange rate ZMW/USD, eop 5.19 5.55

Table of Contents

Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Ratings
7
Domestic Politics
8
Succession Battle Has Implications For Policy
8
Table: Political Overview
8
Long-Term Political Outlook
9
A Question Of Policy, Not Politics
9
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Ratings
13
Economic Activity
14
Domestic Demand To Drive GDP Growth Amid Downside Risks
14
Table: Economic Activity
14
Balance Of Payments
15
Current Account Balance To Turn Negative, But No Crisis Ahead
15
Table: Current Account
16
Monetary Policy
17
Monetary Policy To Be Loosened But Rates On Hold
17
Table: Monetary Policy
18
Exchange Rate Policy
19
ZMW: Renewed Downside Pressures Ahead
19
Table: CURENCY FORECAST
19
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 BUSINES AND OPERATION RISK RATINGS
24
Table: BMI LEGAL FRAMEWORK RATING
25
Table: LABOUR FORCE QUALITY
26
Infrastructure
27
TABLE: ANUAL FDI INFLOWS
27
Table: TRADE AND INVESTMENT RATINGS
28
Market Orientation
29
Operational Risk
30
Table: Top Export Destinations
30
Chapter 5: Key Sectors
33
Pharmaceuticals & Healthcare
33
Table : Pharmaceutical Sales , Historical Data And Forecasts
34
Table : Gover nme nt Healthcare Expenditure Trends , Historical Data And Forecasts
35
Table : Healthcare Expenditure Trends , Historical Data And Forecasts
35
Table : Private Healthcare Expenditure Trends , Historical Data And Forecasts
36
Other Key Sectors
39
Table: Infrastructure Sector Key Indicators
39
Table: Autos Sector Key Indicators
39
Table: Telecoms Sector Key Indicators
39
Table: Food and Drink Sector Key Indicators
40
Chapter 6: BMI Global Assumptions
41
Global Outlook
41
Eurozone Downgrade On Poor Q214
41
Table: Global Assumptions
41
Table : Developed States , Real GDP Growt H, %
42
Table : BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
42
Table : Emerging Mar kets , Real GDP Growth , %
43

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