The Zambian economy for 2012 closed the year with a growth rate of about 7 per cent, up from 6.8 per cent recorded in 2011. This was due to strong performances in agriculture, manufacturing and service sectors.
The economic growth rate had continued on a positive rate of more than 6 per cent per annum from 2005 to 2012. According to a 2012 World Bank report, economy of Zambia for 2012 was ranked among the top 10 fastest growing economies in the world.
Foreign direct investment (FDI) had been rising and it stood at US$991 million in 2012. During the year 2012, exports rose as a result of surpluses in agriculture and mine production. Copper production had increased because of the prevailing favourable prices on the international market and also due to increased investments in the mining sector.
Continued increases in agriculture output, maize in particular, had boosted the economy. On the other hand, non-maize crops had also seen an increase in production. This had prompted the government to increase funding to the agricultural sector.
The government had met most of its economic objectives laid out in the 2012 Zambian budget.
During the course of the year, the government passed three notable reforms which built on the success of the Zambian economy for 2012.
The exercise came into effect on the 1st of January 2013 and went up to 30th of June 2013. During this period, both the new and old Kwacha notes were operating side by side. No changes had been made to the face value of the rebased Kwacha.
The minimum capital requirement for the commercial banks was reviewed upwards from 12 million to 104 million in rebased kwacha for the local banks and 520 million in rebased kwacha for foreign banks. The bank of Zambia had been commended for this move in that the revised capital requirement was to make banks to be more resilient to economic shocks.
This move was aimed at international companies who were fond of linking the kwacha's value to that of the dollar and using the dollar for accounting purposes.
During the course of 2012, the government issued a US$750 million inaugural international bond. The bond issue represented sub-Saharan Africa’s largest ever book order. This was testimony of the confidence the international investors had in the Zambian country.
However, despite the economy recording successive growth in real GDP and an overall growth in the economy, about 60 per cent of her population were below the poverty line.
The future prospects looked favourable for GDP growth. To sustain this growth, the government wanted to maintain macro-economic stability with single digit inflation.
The most notable thing about the growth was that it was broad-based, led by strong performances in agriculture, manufacturing and services and not necessarily from the traditionally dominant mining sector.
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