Zambia’s budget deficit widened to 8.1 percent of gross domestic product (GDP) in 2015 compared to a target of 6.9 percent, underscoring the impact of a plunge in the price of copper, its major export, the minister of finance said on Tuesday.
The 2016 budget deficit would be contained around 3.9 percent of GDP premised on the implementation of austerity measures announced last year, Finance minister Alexander Chikwanda told parliamnent.
Chikwanda also told parliament the cabinet had given the green light for the government to engage with the International Monetary Fund (IMF) on an economic programme in 2016.
Chikwanda said Zambia’s economy was projected to grow 3.7 percent in 2016, below a targeted 7 percent, and inflation was expected to come in at 15 percent, well beyond its 7 percent target.
Zambia’s electricity deficit has risen to 1,000 megawatts (MW) from 700 MW in November as Africa’s No. 2 copper producer cuts hydro power generation due to falling water levels as drought bites in the region.
“We have gradually continued to reduce generation. We are 1,000 MW short of the installed capacity,” Energy Minister Dora Siliya said.