Assignment ( 1)GPA 331 PUBLIC FINANCIAL MANAGEMENT.docx -...

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ZAMBIAN OPEN UNIVERSITY SCHOOL : HUMANITIES AND SOCIAL SCIENCES NAME : FABIAN MBEWE COMPUTER NO : 21732458 PROGRAMME : BA PUBLIC ADMINISTRATION COURSE : PUBLIC FINANCIAL ADMINISTRATION CODE : GPA 331 SEMESTER : ONE (1) THIRD YEAR YEAR : AUGUST 2019 LECTURER : MR. G. CHABU CELL # : 0979227177 EMAIL : [email protected] ASSIGNMENT : ONE (1) DUE DATE : 6 th SEPTEMBER, 2019 POSTAL ADRESS : BOX 520031, CHADIZA DISTRICT HEALTH OFFICE Email : [email protected]/[email protected] Mobile : 0977495167 QUESTION 2 : Does Zambia need financial Aid from the International Monitory Funds (IMF) and the World Bank (WB) NOTE: delay in submission of this assignment was due to network failure in our area. Page 1 of 8
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INTRODUCTION Zambia like any other country in sub-Sahara need financial support in order to balance its economy. This is necessitated by the number of factors. Over the years Zambia have been relying of copper, agriculture, import and export of goods, to raise income for the country. The reduction of the copper price, agriculture has resulted in the budget deficit meaning that there has been in balance between expenditure and the income generated in the country. This assignment will discuss factors that has led the borrowing from financial institution like world bank and IMF. DISCUSSION Copper mining has in recent years provided 70 percent of exports and 12 percent of GDP. In addition, 80 percent of Zambia’s recent Foreign Direct Investment (FDI) has been to the mining sector according to World Bank 2015 report. While the mining sector has numerous links to other sectors, including services (Lippert 2014), and despite its importance and size, the sector is still often described as an enclave industry. It remains a capital-intensive sector Approximately US$2 billion worth of goods and services were procured by the industry annually, only 10 percent of which were locally produced. Establishing better links and local content can to date be considered as forgone benefits from mining, with many policy failures having been identified as a root cause of this issue. The drop of Copper prices on the world market has contributed to unstable economy in Zambia because Zambia since independence has been depending on copper. Lack of diverse has also been noted as the the challenge for the country to have stable economy. The Zambian economy slowed down in 2015 and 2016. The slowdown reflected tough external conditions including low global demand for commodities, lower copper prices, and tight global financial conditions, as well as domestic challenges such as electricity outages, which intensified in mid-2015 lower rainfall, and a tight monetary policy that increased the cost of borrowing and constrained credit growth (Smith, Davies, and Page 2 of 8
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Chinzara 2016). This negatively affected the manufacturing and services sectors (largely construction, plus wholesale and retail).
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