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Zambia Zaire COUNTRY REPORT Zambia Zaire 1st quarter 1996 The Economist Intelligence Unit 15 Regent Street, London SW1Y 4LR United Kingdom The Economist Intelligence Unit The Economist Intelligence Unit is a specialist publisher serving companies establishing and managing operations across national borders. For over 40 years it has been a source of information on business developments, economic and political trends, government regulations and corporate practice worldwide. The EIU delivers its information in four ways: through subscription products ranging from newsletters to annual reference works; through specific research reports, whether for general release or for particular clients; through electronic publishing; and by organising conferences and roundtables. The firm is a member of The Economist Group. London New York Hong Kong The Economist Intelligence Unit The Economist Intelligence Unit The Economist Intelligence Unit 15 Regent Street The Economist Building 25/F, Dah Sing Financial Centre London 111 West 57th Street 108 Gloucester Road SW1Y 4LR New York Wanchai United Kingdom NY 10019, USA Hong Kong Tel: (44.171) 830 1000 Tel: (1.212) 554 0600 Tel: (852) 2802 7288 Fax: (44.171) 499 9767 Fax: (1.212) 586 1181/2 Fax: (852) 2802 7638 Electronic delivery EIU Electronic Publishing New York: Lou Celi or Lisa Hennessey Tel: (1.212) 554 0600 Fax: (1.212) 586 0248 London: Moya Veitch Tel: (44.171) 830 1007 Fax: (44.171) 830 1023 This publication is available on the following electronic and other media: Online databases CD-ROM Microfilm FT Profile (UK) Knight-Ridder Information World Microfilms Publications (UK) Tel: (44.171) 825 8000 Inc (USA) Tel: (44.171) 266 2202 DIALOG (USA) SilverPlatter (USA) Tel: (1.415) 254 7000 LEXIS-NEXIS (USA) Tel: (1.800) 227 4908 M.A.I.D/Profound (UK) Tel: (44.171) 930 6900 Copyright © 1996 The Economist Intelligence Unit Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of The Economist Intelligence Unit Limited. All information in this report is verified to the best of the author’s and the publisher’s ability. However, the EIU does not accept responsibility for any loss arising from reliance on it. ISSN 1350-7087 Symbols for tables “n/a” means not available; “–” means not applicable Printed and distributed by Redhouse Press Ltd, Unit 151, Dartford Trade Park, Dartford, Kent DA1 1QB, UK 1 Summary Zambia, Zaire 1st quarter 1996 February 9, 1996 Zambia Political and economic structures Pages 2-3 Outlook: The agreement with the IMF and the weakness of the opposition give the government good reason to expect victory in October’s elections. Donor relations are on a solid footing and economic performance will improve even if ESAF targets are not met. Real GDP growth is likely to be around 3.8% in 1996. Pages 4-6 Review: Problems have arisen over the adoption of the draft constitution. Frederick Chiluba has been re-elected as the MMD’s leader. The voter registra- tion exercise has had an inauspicious beginning. The former president, Kenneth Kaunda, has expressed his determination to contest the presidential elections. The Rights Accumulation Programme (RAP) has been formally succeeded by an ESAF agreement with the IMF. Donors have followed this up with significant aid pledges for 1996. The finance minister, Ronald Penza, has presented a balanced budget for this year but problems have arisen over a pay award for civil servants. There have been warnings over food supply, despite the return of normal rains. Talks have begun with Anglo American Corporation over the Konkola Deep project. Production and profitability have fallen at ZCCM. SADC has debated the vexed issue of regional tariff levels. Pages 6-16 Zaire Political and economic structures Pages 17-18 Outlook: The president, Mobutu Sese Seko, is back in charge, although beyond his Gbadolite headquarters the country will remain in chaos. The economy’s halting recovery remains extremely tentative. Pages 19-20 Review: Mr Mobutu is the only national figure to call for rapid elections, but polls have indicated that he would lose to the former prime minister, Etienne Tshisekedi, at least in Kinshasa. Members of the HCR-PT have awarded them- selves a monthly $1,000 stipend. University professors have gone on strike. The government has dropped its December 31 ultimatum for the departure of Rwandan refugees but has maintained pressure for their return. Inflation has rebounded. The exchange rate has deteriorated rapidly after several months of stability. The 1996 budget was announced on time and is set to balance al- though it is based on some unrealistic assumptions. A cargo plane has crashed in a crowded market, killing more than 250 people and confirming one of the worst air safety records in the world. Pages 20-26 Statistical appendices Pages 27-33 Editorial queries: Mike Chapman; Gregory Kronsten; Gill Tudor Tel: (44.171) 830 1000 Fax: (44.171) 499 9767 Subscription queries: Jan Frost Tel: (44.171) 830 1007 Fax: (44.1708) 371 850 EIU Country Report 1st quarter 1996 © The Economist Intelligence Unit Limited 1996 2 Zambia Political structure: Zambia Official name: Republic of Zambia Form of state: unitary republic Legal system: based on the 1973 constitution as amended in 1991 National legislature: National Assembly; 150 members elected by universal suffrage; all serve a five-year term Last elections: October 1991 (presidential and legislative) Next elections: October 1996 (presidential and legislative) Head of state: president elected by universal suffrage for a term of five years National government: the president and his appointed cabinet (last reshuffle in July 1995) Main political parties: the Movement for Multiparty Democracy (MMD) is the ruling party. The former sole political party, the United National Independence Party (UNIP), is now in opposition. The other party with seats in parliament is the National Party (NP). Other parties (31 in all) include the Labour Party and the National Conservative Party (NCP) President Frederick Chiluba Vice-president Godfrey Miyanda Key ministers agriculture, food & fisheries Suresh Desai commerce, trade & industry Dipak Patel community development & social welfare Paul Kaping’a defence Ben Mwila education Alfeyo Hambayi energy & water Edith Nawakwi environment William Harrington finance Ronald Penza foreign affairs Christen Tembo health Michael Sata home affairs Chitalu Sampa information & broadcasting, government spokesman Amusa Mwanamwambwa labour & social security Newstead Zimba lands Luminzu Shimaponda legal affairs Remmy Mushota local government & housing Bennie Mwiinga mines & mineral development Keli Walubita science, technology & vocational training Kabunda Kayongo tourism Gabriel Maka transport & communications Dawson Lupunga works & supply Simon Zukas youth, sports & child development Patrick Kafumokache Governor of Bank of Zambia Jacob Mwanza EIU Country Report 1st quarter 1996 © The Economist Intelligence Unit Limited 1996 Zambia 3 Economic structure: Zambia Latest available figures Economic indicators 1991 1992 1993 1994a 1995a GDP at market prices ZK m 218,276 469,564 1,640,748 2,318,287b n/a Real GDP growth % –0.4 –0.6 5.1 –5.4b –3.7 Consumer price inflationc % 92.6 197.4 189.0 55.0 30.0 Population m 8.39 8.64 8.94 9.25 n/a Exports fob $ m 1,172 1,177 1,013 1,075 1,150 Imports fob $ m 752 829 803 845 900 Current account $ m –307 –288 –258 –200 –90 Reserves excl gold $ m 184.6 150.0 192.3 297.0 n/a Total external debt $ bn 7.29 6.94 6.79 6.89 7.00 External debt-service ratio % 51.1 29.5 32.8 31.0 25.0 Copper outputd ’000 tons 387 432 392 350 330 Exchange rate (av) ZK:$ 64.64 172.21 452.76 669.37 910.00 February 9, 1996 ZK1,010:$1 Origins of gross domestic product 1994b % of total Components of gross domestic product 1994b % of total Agriculture 32 Private consumption 97 Mining 6 Government consumption 10 Manufacturing 22 Gross fixed capital formation 11 Construction 5 Change in stocks –1 Commerce 22 Exports of goods & services 24 Government & other services 13 Imports of goods & services –41 GDP at market prices 100 GDP at market prices 100 Principal exports 1993 $ m Principal imports 1993 $ m Copper 830 Crude oil 144 Cobalt 74 Fertiliser 30 Zinc 3 Electricity 1 Main destinations of exports 1994e % of total Main origins of imports 1994e % of total Japan 14 South Africa 35 Saudi Arabia 11 UK 16 Thailand 10 Zimbabwe 11 Pakistan 8 New Zealand 6 a EIU estimates. b Provisional. c Low-income index, urban areas. d ZCCM financial years starting April 1. e Based on partners’ trade returns, subject to a wide margin of error. EIU Country Report 1st quarter 1996 © The Economist Intelligence Unit Limited 1996 4 Zambia Zambia Outlook Mr Chiluba and the MMD The president, Frederick Chiluba, began 1996 with reason to be confident about look forward to 1996— his prospects in the presidential election scheduled for October. Mr Chiluba was comfortably re-elected as leader of the ruling Movement for Multiparty Democracy (MMD) and the party has had some success in its attempt to present a more united front. —confident that donor The government has also won a significant economic victory with the formal relations are on a solid conclusion in early December of the Rights Accumulation Programme (RAP) footing— and the agreement of an Enhanced Structural Adjustment Facility (ESAF) with the IMF. Access to new IMF funding over the next three years will be useful but just as important was the praise which came from the Fund for the govern- ment’s economic policy. As long as such approval continues donor support can be assured. This was confirmed at the World Bank-sponsored Consultative Group Meeting, at which donors pledged continued financial support for the country’s economic reform programme.
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