Annual

Economic
Report
MINISTRY OF FINANCE
Republic of Zambia
Republic of Zambia
2013
ANNUAL ECONOMIC REPORT
© 2014 Ministry of Finance
For comments and contributions please contact:
Economic Management Department
Ministry of Finance
P.O. Box 50062
Lusaka
Tel: +260 211 257178
Internet: www.mofnp.gov.zm
iii
FOREWORD
The 2013 annual economic report evaluates the performance of the economy based on the objectives
and programmes of the Government as highlighted in the 2013 budget address.
The country’s macroeconomic conditions remained favourable evidenced by sustained positive economic
growth, single digit inflation, positive current account balance and a relatively stable exchange rate.
Growth at 6.4 percent was mainly driven by positive developments in the mining, construction, transport,
storage and communication sectors. In terms of fiscal performance, revenues were below target while
total expenditures were above target resulting in a much higher overall budget deficit of 6.8 percent of
GDP against the projection of 4.3 percent of GDP. The budget was faced with pressures emanating from
payment of arrears related to fuel and maize subsidies and a higher than budgeted wage award.
In the external sector, the current account surplus narrowed while the capital and financial account deficit
widened. As a consequence, the overall Balance of Payments (BoP) recorded a deficit. In line with these
developments there was a decline in Gross International Reserves (GIR) which translated into lower
months of import cover.
In 2014, the goal of the Government is to pursue policies and strategies for consolidating growth, income
generation, job creation and poverty reduction.
Pamela C. Kabamba
ACTING SECRETARY TO THE TREASURY
v
TABLE OF CONTENTS
LIST OF TABLES................................................................................................................................ ix
LIST OF FIGURES.............................................................................................................................. xi
EXECUTIVE SUMMARY.................................................................................................................... xiii
Part I DEVELOPMENTS IN THE GLOBAL ECONOMY............................................................................... 1
1.0 DEVELOPMENTS IN THE GLOBAL ECONOMY ........................................................... 3
1.1. OVERVIEW................................................................................................................................. 3
1.2. DEVELOPMENTS IN ADVANCED ECONOMIES...................................................................... 4
1.3. DEVELOPMENTS IN EMERGING AND DEVELOPING ECONOMIES..................................... 4
1.4. COMMODITY PRICE DEVELOPMENTS................................................................................... 5
1.5. IMPACT OF GLOBAL DEVELOPMENTS ON THE ZAMBIAN ECONOMY............................... 5
Part II DEVELOPMENTS IN THE DOMESTIC ECONOMY ......................................................................... 7
2.0 REAL SECTOR DEVELOPMENTS................................................................................. 9
2.1. OVERVIEW................................................................................................................................. 9
2.2. AGRICULTURE, FORESTRY AND FISHING ............................................................................ 9
2.3. MINING ..................................................................................................................................... 13
2.4. MANUFACTURING................................................................................................................... 14
2.5. ENERGY................................................................................................................................... 15
2.6. TOURISM.................................................................................................................................. 18
2.7. TRANSPORT AND COMMUNICATIONS................................................................................. 20
3.0 SOCIAL SECTOR DEVELOPMENTS........................................................................... 27
3.1. EDUCATION............................................................................................................................. 27
3.1.1. General Education........................................................................................................ 27
3.1.2. Enrolments.................................................................................................................... 27
3.1.3. Gender Parity................................................................................................................ 28
3.1.4. Pupil Teacher Ratio ...................................................................................................... 28
3.1.5. Tertiary Education......................................................................................................... 28
3.2. HEALTH.................................................................................................................................... 30
3.2.1. Disease Burden ............................................................................................................ 31
3.2.2. Maternal And Child Health............................................................................................ 31
3.2.3. Human Resources........................................................................................................ 32
vi
4.0 BUDGET PERFORMANCE........................................................................................... 35
4.1. REVENUE PERFORMANCE.................................................................................................... 35
4.1.1 Domestic Revenue ............................................................................................................ 36
4.1.2 Tax Revenues.................................................................................................................... 36
4.1.3 Non Tax Revenue.............................................................................................................. 36
4.1.4 Grants ................................................................................................................................ 37
4.2. EXPENDITURE PERFORMANCE............................................................................................ 37
4.2.1 Expenses ........................................................................................................................... 39
4.2.2 Personal Emoluments........................................................................................................ 39
4.2.3 Use of Goods and Services............................................................................................... 39
4.2.4 Interest on Domestic Debt ................................................................................................. 40
4.2.4 External Debt Interest and Amortisation............................................................................ 40
4.2.5 Grants and Other Payments.............................................................................................. 40
4.2.6 Social Benefits ................................................................................................................... 40
4.2.7 Other Expenses ................................................................................................................. 41
4.2.8 Assets ................................................................................................................................ 41
4.2.9 Liabilities ............................................................................................................................ 41
4.3. BUDGET DEFICIT .................................................................................................................... 42
5.0 DOMESTIC DEBT ......................................................................................................... 43
6.0 MONETARY AND FINANCIAL SECTOR DEVELOPMENTS....................................... 45
6.1. MONETARY DEVELOPMENTS............................................................................................... 45
6.1.1. Broad Money ................................................................................................................ 45
6.1.2. Domestic Credit ............................................................................................................ 46
6.2. INFLATION DEVELOPMENTS................................................................................................. 46
6.2.1. Non Food Inflation ........................................................................................................ 47
6.2.2. Food Inflation................................................................................................................ 47
6.3. INTEREST RATES DEVELOPMENTS..................................................................................... 47
6.3.1. Yield Rates on Government Securities......................................................................... 47
6.3.2. Yield Rates on Treasury Bills ....................................................................................... 48
6.3.3. Yield Rates on Government Bonds .............................................................................. 48
6.3.4. Nominal Interest Rates ................................................................................................. 49
6.3.5. Real Interest Rates....................................................................................................... 50
6.4. FOREIGN EXCHANGE MARKET DEVELOPMENTS.............................................................. 50
6.4.1. Exchange Rate ............................................................................................................. 50
6.4.2. Supply and Demand of Foreign Exchange................................................................... 51
vii
6.5. FINANCIAL SECTOR DEVELOPMENTS................................................................................. 52
6.5.1. Banking Sector ............................................................................................................. 52
6.5.2. Regulatory Developments ............................................................................................ 52
6.5 NON-BANK FINANCIAL INSTITUTIONS ................................................................................. 53
6.6 CAPITAL MARKETS DEVELOPMENTS.................................................................................. 53
6.6.1 Stock Market ................................................................................................................. 53
6.6.2 Bond Market ................................................................................................................. 54
7.0 EXTERNAL SECTOR DEVELOPMENTS..................................................................... 55
0.1. BALANCE OF PAYMENTS....................................................................................................... 55
7.1.1 Current Account ............................................................................................................ 56
7.1.2 Capital and Financial Account ...................................................................................... 58
0.2. EXTERNAL DEBT POSITION .................................................................................................. 58
7.2.1 External Debt Service................................................................................................... 59
7.2.2 Loans contracted in 2013 ............................................................................................. 59
8.0 PROSPECTS FOR 2014............................................................................................... 61
Part III ANNEXES………………………………………………………………………………………………… 63
ANNEX I ............................................................................................................................................. 65
ANNEX II ............................................................................................................................................ 66
ANNEX III ........................................................................................................................................... 67
ANNEX IV........................................................................................................................................... 68
ix
LIST OF TABLES
Table 1: Overview of the World Economic Outlook, 2011-2013 ------------------------------------------------------ 3
Table 2: Area Planted, Yield and Crop Production, 2012/2013 season--------------------------------------------- 9
Table 3: Zambia National Food Balance Sheet for the 2013/2014 Marketing Year ----------------------------- 10
Table 4: Livestock Estimates, 2012-2013 --------------------------------------------------------------------------------- 11
Table 5: Milk Production Estimates in Litres, 2011-2013 -------------------------------------------------------------- 11
Table 6: Livestock Slaughters, 2012-2013 -------------------------------------------------------------------------------- 11
Table 7: Production of Fish by Selected Fishery Area (tonnes), 2011-2013--------------------------------------12
Table 8: Aquaculture Production of Fish (tonnes) by Released Species, 2011-2013 -------------------------- 12
Table 9: Exports and Import of Fish in Mt, 2011-2013 -----------------------------------------------------------------12
Table 10: Index of Industrial Production, 2012-2013 -------------------------------------------------------------------14
Table 11: Electricity Generation, 2012-2013------------------------------------------------------------------------------ 15
Table 12: Electricity Consumption by Sector (Million Kwh), 2012-2013-------------------------------------------- 15
Table 13: National Consumption of Petroleum Products, 2011-2013 ---------------------------------------------- 17
Table 14: International Tourists Arrivals by Country of Origin, 2011-2013 ----------------------------------------18
Table 15: Employment, Room and Bed Occupancy Rates, 2011-2013-------------------------------------------- 18
Table 16: Tourist Arrivals at Major National Parks, 2012-2013 ------------------------------------------------------ 19
Table 17: Tourists Visits to National Parks by Area of Origin, 2012-2013-----------------------------------------19
Table 18: Hunting Blocks and Unfenced Private Wildlife Estates --------------------------------------------------- 19
Table 19: Passenger Performance at the Four Major Airports, 2012-2013 ---------------------------------------20
Table 20: Aircraft Movement, 2012-2013---------------------------------------------------------------------------------- 20
Table 21: Number of Passengers Transported, 2011- 2013---------------------------------------------------------- 21
Table 22: Population of Vehicles Registered, 2011- 2013 ------------------------------------------------------------ 21
Table 23: Passenger and Cargo Performance for TAZARA and ZRL, 2012-2013 ------------------------------ 22
Table 24: Subscriber Base, 2012-2013 ------------------------------------------------------------------------------------ 22
Table 25: Mobile International Incoming and Outgoing Minutes, 2012-2013 -------------------------------------24
Table 26: Mobile Domestic Outgoing and Incoming minutes for MNOs, 2012-2013---------------------------- 24
Table 27: Internet Usage, 2012-2013 -------------------------------------------------------------------------------------- 25
Table 28: Number of Schools, 2011-2013--------------------------------------------------------------------------------- 27
Table 29: Enrolments and Gender Parity, 2011-2013------------------------------------------------------------------28
Table 30: Pupil - Teacher Ratio, 2011-2013 ------------------------------------------------------------------------------ 28
Table 31: Number of Registered Institutions by Ownership, 2012-2013------------------------------------------- 29
Table 32: Student Enrolment by Programme and Gender, 2012-2013 -------------------------------------------- 29
Table 33: College of Education Student Enrolments, 2011-2013---------------------------------------------------- 30
Table 34: Public Universities Enrolments by Gender, 2012-2013 --------------------------------------------------- 30
Table 35: Top ten (10) Causes of Morbidity for All Age Groups, 2012-2013 -------------------------------------30
x
Table 36: Maternal Health and Family Planning Indicators, 2012 -2013------------------------------------------- 32
Table 37: Trends in Human Resource Establishment, 2012-2013 -------------------------------------------------- 33
Table 38: National Clinical Workers per 1,000 Population, 2012- 2013-------------------------------------------- 33
Table 39: Revenue Performance, 2013------------------------------------------------------------------------------------ 35
Table 40: Central Government Operations, 2013 -----------------------------------------------------------------------37
Table 41: Domestic Debt Position, 2011-2013, (ZMW’ Million) ------------------------------------------------------ 43
Table 42: Loans and Advances by Sector (%), December 2011-December 2013 ------------------------------ 46
Table 43: Non-Bank Financial Institutions Licensed by the Bank of Zambia as at 31 December 2013 ----53
Table 44: Balance of Payments 2011-2013, (in US $ Million) -------------------------------------------------------- 55
Table 45: Major Non-Traditional Exports (C.I.F.), 2011-2013 (US$’ Millions) ------------------------------------57
Table 46: External Debt Stock in US Million, 2011-2013 -------------------------------------------------------------- 58
Table 47: Public External Debt Service, 2011-2013 --------------------------------------------------------------------59
Table 48: Loans Contracted by Government in 2013-------------------------------------------------------------------59
Table 49: Selected Macroeconomic Indicators, 2011-2013----------------------------------------------------------- 65
Table 50: Percentage changes in G.D.P by kind of Economic Activity (Constant 1994 prices), 2011-2013
---------------------------------------------------------------------------------------------------------------------------------------66
Table 51: GDP by Kind of Economic Activity (Constant 1994 Prices in K'Billion), 2011-2013---------------- 67
Table 52: GDP By Kind Of Economic Activity At Current Prices (K’Billion), 2011-2013 ----------------------- 68
xi
LIST OF FIGURES
Figure 1: Copper Production for Large Mines (Mt), 2012-2013 ------------------------------------------------------ 13
Figure 2: Export and Imports of Electricity, 2012-2013-----------------------------------------------------------------16
Figure 3: Comparison of Regional Prices for Petrol and Diesel (US$ per litre) ----------------------------------17
Figure 4: Pre-paid Subscriptions, 2012-2013----------------------------------------------------------------------------- 23
Figure 5: Post-paid Subscription, 2012-2013----------------------------------------------------------------------------- 23
Figure 6: Full Immunization Coverage, 2010-2013----------------------------------------------------------------------32
Figure 7: Performance on Revenue and Grants, (K’000) -------------------------------------------------------------- 37
Figure 8: Broad Expenditure Categories----------------------------------------------------------------------------------- 42
Figure 9: Annual Broad Money Growth, January 2010-December 2013 ------------------------------------------45
Figure 10: Annual Inflation, January 2012-December 2013 ---------------------------------------------------------- 47
Figure 11: Treasury Bills Yield Rates (percent per annum), 2011-2013 ------------------------------------------- 48
Figure 12: Government Bond Yield Rates (percent per annum), 2011-2013-------------------------------------49
Figure 13: Lending and Saving, January 2010-December 2013----------------------------------------------------- 49
Figure 14: Real Interest Rates, January 2010-December 2013 ----------------------------------------------------- 50
Figure 15: Kwacha Exchange Rate Levels against Major Foreign Currencies, 2012-2013------------------- 51
Figure 16: Indicators of LuSE Activity, 2013 ------------------------------------------------------------------------------ 54
Figure 17: Export Earnings, 2011-2013 in US $Million-----------------------------------------------------------------58
2013 ANNUAL ECONOMIC REPORT
xiii
EXECUTIVE SUMMARY
The 2013 Annual Economic Report reviews the broad economic and social developments in the Zambian
economy. The first part of the report analyses the developments in the global economy and assesses
their impact on the Zambian economy. The second part discusses the domestic economic performance
and prospects for 2014.
DEVELOPMENTS IN THE GLOBAL ECONOMY
Global economic developments in 2013 remained positive with world output at 3.0 percent, albeit at a
lower rate compared to 3.1 percent in 2012. The slowdown was largely explained by the continued
financial fragility in the Euro Area and deceleration in the advanced economies, particularly the United
States of America (USA). However, growth in Asia and the Sub-Saharan economies remained strong.
DEVELOPMENTS IN THE DOMESTIC ECONOMY
In 2013, real Gross Domestic Product (GDP) growth continued to be positive with preliminary figures
indicating a growth rate of 6.4 percent. This was lower than the 7.3 percent growth recorded in
2012mainly on account of a decline in the agriculture output as well as a slowdown in the manufacturing
and construction sectors.
During the 2012/2013 farming season, output for the major food and cash crops declined despite an
increase in area planted. The decline in yields was due to army worm infestation and poor rainfall
performance in the early part of the season. Despite the agriculture sector recording a decline in the
production of the major food crops, there was an increase in the overall food surplus to 896,677 Mt, in
2013 as a result of carryover stocks from the previous year.
The mining sector performance was favourable on account of increased copper production of 790,007 Mt
compared to 785,642 Mt in 2012. Copper output by large mines increased by 12.3 percent to 783,468 Mt
from 697,918 Mt in 2012. This was on account of the coming on stream of Lubambe Mine which
produced 22,135 Mt and increased output at existing mines.
The performance of the transport and communications sector was satisfactory on account of positive
performance in the road transport, air transport, and the communications sub-sectors. In the air transport
both aircraft and passenger movements increased due to commencement of new flights and increased
frequencies of fights. The communication sub-sector performed well on account of increased mobile
phone and internet usage.
xiv
In the road sector, passengers transported increased by 25.3 percent to 68,294,420 from 54,521,875
passengers in 2012. Similarly, the motor vehicle population increased by 1.1 percent to 534,523
compared to 528,584 in 2012. In the rail sector, cargo transported increased by 23.2 percent to 1,014,216
from 823,517 in 2012. Passengers transported by rail, however, reduced on account of a reduction in
numbers transported by Tanzania-Zambia Railways.
SOCIAL SECTOR DEVELOPMENTS
The performance of the education sector was satisfactory on account of increased net enrolments in
secondary schools, TEVET institutions and university coupled with an improvement in pupil-teacher ratio
at primary school level. In addition, there was expansion of infrastructure at primary, secondary and
university levels. The number of schools offering primary education increased by 5.3 percent to 8,801 in
2013 from 8,359 in 2012. At secondary school level, the number of schools increased by 3.9 percent to
690 from 664 in 2012.
In the health sector, performance was satisfactory, reflected in the reduced incidence rate in seven of the
top ten diseases. This was on account of improved delivery of health care services and the sufficient
supply of drugs and medical equipment. Deterioration in the child and maternal health indicators were,
however, observed as the first antenatal coverage and the percentage of deliveries by institutional, skilled
personnel and traditional birth attendants reduced.
BUDGET PERFORMANCE
Budget performance during the year was not in line with the projections. Total revenue and grants
amounted to K25.6 billion against a target of K26.3 billion. Total expenditures amounted to K33.8 billion
compared to the target of K31.2 billion. This resulted into an overall deficit of K8.2 billion or 6.8 percent of
GDP.
DOMESTIC DEBT
The domestic debt stock increased by 31.0 percent to K19,744.57 million in 2013 from K15,072.84 million
in 2012. This was mainly attributed to an increase in the stock of Government Securities at 31.5 percent
to K18,882.00 million from K14,357.70 million in 2012, to meet funding requirements for higher than
programmed domestic financing.
2013 ANNUAL ECONOMIC REPORT
xv
MONETARY AND FINANCIAL SECTOR DEVELOPMENTS
For the fifth consecutive year, end-year inflation was maintained in single digits at 7.1 percent as at end
2013 compared with 7.3 percent recorded in December, 2012, although higher than the end year target of
6.0 percent.
In the foreign exchange market, the Kwacha depreciated against the US dollar, Pound Sterling and Euro,
while posting an appreciation against the Rand. Firm domestic demand due to high Kwacha liquidity,
market participants’ position-taking ahead of Statutory Instrument No. 55 implementation and
developments in the Euro Area, China and USA contributed to the observed weakness in the Kwacha.
The Kwacha, however, appreciated against the Rand due to exposure of the South African economy to
the fragility in the Euro Area.
The overall financial performance and condition of the banking sector was rated satisfactory. The sector
recorded improvements in the capital adequacy position, asset quality and liquidity position, while the
earnings performance remained satisfactory. Similarly, the performance of the Non-Bank Financial
Institutions (NBFIs) was satisfactory.
EXTERNAL SECTOR DEVELOPMENTS
In the external sector, the current account surplus narrowed while the capital and financial account deficit
widened. As a consequence, the overall Balance of Payments recorded a deficit in 2013 compared with a
surplus in 2012. In line with these developments, there was a decline in Gross International Reserves
which translated into lower months of import cover.
1
Part I
DEVELOPMENTS IN THE GLOBAL ECONOMY
2013 ANNUAL ECONOMIC REPORT
3
1.0 DEVELOPMENTS IN THE GLOBAL ECONOMY
1.1. OVERVIEW
World economic output in 2013 continued to be positive albeit slower than in 2012. Real Gross Domestic
Product (GDP) was 3.0 percent, down by 0.1 percentage points from 3.1 percent in 2012. Developing
Asia and Sub-Saharan Africa were the main drivers of growth. Growth in the advanced economies
however, decelerated largely on account of the slowdown in the United States of America (USA) and the
recession in the Euro Area (see Table 1).
Despite the slowdown in global output, the volume of world trade remained at the 2012 growth rate of 2.7
percent. Inflation was low in advanced economies, while the emerging and developing economies
experienced inflationary pressures mainly on account of rising food prices.
Table 1: Overview of the World Economic Outlook, 2011-2013
2011 2012 2013
World Output 3.9 3.1 3.0
Advanced Economies 1.6 1.4 1.3
United States 1.8 2.8 1.9
Euro Area 1.4 (0.7) (0.4)
Germany 3.1 0.9 0.5
France 1.7 0.0 0.2
Italy 0.4 (2.5) (1.8)
Spain 0.4 (1.6) (1.2)
Japan (0.6) 1.4 1.7
United Kingdom 0.9 0.3 1.7
Canada 2.6 1.7 1.7
Other Advanced Economies 3.3 1.9 2.2
Emerging Market and Developing Countries 6.3 4.9 4.7
Central and Eastern Europe 5.3 1.4 2.5
Commonwealth of Independent States 4.9 3.4 2.1
Russia 4.3 3.4 1.5
Excluding Russia 6.2 3.3 3.5
Developing Asia 8.0 6.4 6.5
China 9.3 7.7 7.7
India 7.9 3.2 4.4
ASEAN-5 4.5 6.2 5.0
Latin America and the Caribbean 4.5 3.0 2.6
Brazil 2.7 1.0 2.3
Mexico 3.9 3.7 1.2
Middle East and North Africa 3.5 4.1 2.4
Sub-Saharan Africa 5.3 4.8 5.1
South Africa 3.5 2.5 1.8
Memorandum
World growth based on market exchange rates 2.9 2.5 2.4
4
2011 2012 2013
World trade volume (goods and services) 5.9 2.7 2.7
Imports (goods and services)
Advanced economies 4.6 1.0 1.4
Emerging market and developing countries 8.4 5.7 5.3
Commodity prices (US dollars)
Oil* 31.6 1.0 (0.9)
Non-fuel (average based on world commodity export weights) 17.8 (10.0) (1.5)
Consumer prices
Advanced economies 2.7 2.0 1.4
Emerging market and developing countries 7.1 6.0 6.1
London interbank offered rate (percent)
On U.S Dollar Deposits (6 month) 0.5 0.7 0.4
On Euro Deposit (3 month) 1.4 0.6 0.2
On Japanese Yen Deposits (6 month) 0.3 0.3 0.3
Source: IMF, World Economic Outlook, January 2014(Percent change unless noted otherwise)
*Simple average of prices of U.K. Brent, Dubai Fateh, and West Texas Intermediate crude oil. The average price of oil in U.S. dollars a barrel was $104.11 in 2013; the
assumed price based on futures markets is $103.84 in 2014 and $98.47 in 2015.
1.2. DEVELOPMENTS IN ADVANCED ECONOMIES
Growth in advanced economies decelerated to 1.3 percent in 2013 from 1.4 percent in 2012. This was
mainly on account of negative growth in the Euro Area. Real GDP growth in the Euro Area was negative
0.4 percent compared to negative 0.7 percent in 2012, largely attributed to production cutbacks in the
periphery economies emanating from tight financial and fiscal conditions. Output for Japan and the United
Kingdom, however, increased to 1.7 percent from 1.4 percent and 0.3 percent in 2012, respectively.
1.3. DEVELOPMENTS IN EMERGING AND DEVELOPING ECONOMIES
Growth in the emerging and developing economies slowed down by 0.2 percentage points to 4.7 percent
from 4.9 percent in 2012. This was partly explained by the fragility in the financial system, weaker
demand from advanced economies and domestic factors.
Growth in developing Asia strengthened to 6.5 percent from 6.4 percent in 2012 largely due to increased
output in India arising from favourable weather conditions and increased exports. Growth in China
remained strong at 7.7 percent while India grew by 4.4 percent from 3.3 percent in 2012. Growth in the
ASEAN-5, however, declined to 5.0 percent from 6.2 percent in 2012.
In Sub-Saharan Africa, real GDP growth remained robust at 5.1 percent in 2013 compared to 4.8 percent
in 2012. This was mainly on account of increased investments in infrastructure and trade and investment
ties with the emerging economies. The economic expansion was strong in oil exporters, although the
general trend was upward across the region. Nevertheless, growth in South Africa slowed down to 1.8
percent in 2013 from 2.5 percent in 2012. This was due to unexpected gradual tightening of the monetary
2013 ANNUAL ECONOMIC REPORT
5
policy in the USA which led to high outflows of foreign capital which negatively impacted the refinancing
conditions for the private and public sector and the continued economic instability in the euro area.
1.4. COMMODITY PRICE DEVELOPMENTS
In the period under review, international oil prices marginally declined by 0.9 percent to US$104.11 per
barrel as at end 2013 compared to US$105.08 per barrel as at end 2012.The decrease was partly on
account of reduced consumption of the commodity by India, China and the USA. However, non-fuel
commodity prices averaged negative 1.5 percent compared to negative 10.0 percent in 2012.
Notwithstanding the rise in non-fuel commodity prices, the realised average copper price marginally
declined to US$7,073.82 per tonne from US$7,135.84 per tonne in 2012.
1.5. IMPACT OF GLOBAL DEVELOPMENTS ON THE ZAMBIAN ECONOMY
Global economic developments impacted negatively on the performance of the domestic economy. The
economic difficulties in the Euro Area coupled with uncertainties associated with tapering in the USA had
a negative impact on capital and financial flows to the country. This resulted in a balance of payment
deficit which consequently affected the exchange rate.
7
Part II
DEVELOPMENTS IN THE DOMESTIC ECONOMY
2013 ANNUAL ECONOMIC REPORT
9
2.0 REAL SECTOR DEVELOPMENTS
2.1. OVERVIEW
Preliminary data indicates that the performance of the economy was favourable in 2013 with a real GDP
growth of 6.4 percent. This was however lower than the 7.3 percent growth in 2012. The slowdown in
output was mainly on account of a decline in output in the primary sector as well as a slowdown in the
secondary sector. However, the tertiary sector registered an increase in output (see Annex II, III and IV).
2.2. AGRICULTURE, FORESTRY AND FISHING
Growth in the agriculture, forestry and fishing sector slowed down to negative 7.4 percent in 2013 from
6.8 percent in 2012. This was on account of a decline in the agriculture and fishing sub-sectors by
negative 15.4 percent and negative 2.0 percent, respectively. The forestry sub-sector maintained growth
of 3.7 percent. Notwithstanding the negative growth in the agriculture sub-sector, the country was able to
maintain food security and sufficient stocks to meet industrial requirements.
2.2.1. Crop Production
During the 2012/2013 farming season, output for major food and cash crops declined despite an increase
in area planted (see Table 2). The decline was mainly due to poor rainfall performance and infestation of
army worms during the early part of the season.
Table 2: Area Planted, Yield and Crop Production, 2012/2013 season
Crop Area planted (ha) Yield (MT/ha) Expected Production
2011/2012 2012/2013
% Change
2013/2012
2011/2012 2012/2013
% Change
2013/2012
2011/2012 2012/2013
% Change
2013/2012
Maize 1 274 983 1 312 402 2.93 2.24 1.93 (13.74) 2 852 687 2 532 800 (11.21)
Sorghum 18 685 23 112 23.69 0.82 0.65 (21.03) 15 379 14 971 (2.65
Rice 31 388 38 520 22.72 1.44 1.16 (19.66) 45 321 44 747 (1.27)
Millet 35 828 33 834 (5.57) 0.79 0.71 (10.57) 28 446 23 942 (15.83)
Sunflower 40 870 66 515 62.75 0.5 0.51 1.83 20 468 33 733 64.81
Groundnuts 184 397 207 249 12.39 0.61 0.52 (15.16) 113 026 106 792 (5.52)
Soya-beans 86 223 124 858 44.81 2.35 2.09 (11.25) 203 038 261 063 28.58
Cotton 314 497 172 160 (45.26) 0.86 0.81 (5.48) 269 502 139 583 (48.21)
Wheat 37 230 41 810 12.3 6.81 6.54 (3.96) 253 522 273 584 7.91
Virginia Tobacco 10 725 11 348 5.81 2.26 1.87 (17.30) 24 250 21 195 (12.6)
Burley Tobacco 3 161 7 091 124.35 2.24 1.23 (44.99) 7 067 8 704 23.16
Sweet Potatoes 42 847 48 454 13.09 3.82 3.89 1.95 163 484 188 355 15.21
Paprika 680 418 (38.57) 1.42 1.45 2.28 965 605 (37.28)
Source: Ministry of Agriculture and Livestock
10
In terms of crop production, maize and cotton which accounted for 66.8 percent of area planted declined.
Total maize production declined by 11.2 percent to 2,532,800 Mt in the 2012/2013 season from 2,852,687
Mt in the 2011/2012 season. Cotton production also declined by 48.2 percent to 139,583 Mt from 269,502
Mt in the previous season. Notwithstanding the poor performance of maize and cotton, a number of cash
crops such as soya beans, sunflower, wheat and burley tobacco registered increased production.
The yield rates for eleven of the top eighteen crops declined due to the outbreak of army worms at the
time of planting and lower than normal rainfall in the southern half of the country. The average yield rate
for maize declined by 13.7 percent to 1.94 Mt/Ha in the 2012/2013 season from 2.24 Mt/Ha in the
2011/2012 season while cotton declined by 48.2 percent to 0.81 Mt/Ha in the 2012/2013 season from
0.86 Mt/Ha in 2011/2012 season. Other crops that registered a decline in yield rates included wheat, rice
and virginia tobacco. Yield rates for sunflower, paprika and sweet potatoes, however, increased (see
Table 2).
2.2.2. National Food Balance Sheet
The overall food surplus increased to 896,677 Mt in 2012/2013 from 413,064 Mt in 2011/2012 marketing
season, despite the agriculture sub-sector recording a decline in the production of the major food crops.
This was on account of surplus production in the key food crops such as cassava and wheat, and
sufficient carry-over stocks for maize (see Table 3).
Table 3: Zambia National Food Balance Sheet for the 2013/2014 Marketing Year
Maize Paddy Rice Wheat
Sorghum/
millet
Sweet/ Irish
potatoes
Cassava Flour
Total
(Maize mealie meal
equivalent)
Availability
(i) Opening stocks (1st May 2013) 455,221 2,737 168,255 6,036 0 0 629,556
(ii) Total production (2012/13) 2,532,800 44,747 273,584 38,914 210,392 1,114,583 3,984,553
Total availability 2,988,021 47,484 441,839 44,950 210,392 1,114,583 4,614,109
Requirements:
(i) Staple food requirements
Human Consumption 1,429,739 55,769 281,321 40,540 199,872 721,901 2,533,816
Food Reserve Stocks (net) 500,000 0 0 0 0 0 500,000
(ii) Industrial requirements
Stock feed 223,300 0 0 0 0 0 223,300
Breweries 100,000 0 0 0 0 0 100,000
Grain retained for other uses 34,347 4,478 0 2,464 0 0 41,088
(iii) Losses 126,640 2,237 13,679 1,946 10,520 55,729 199,228
(iv) Structural cross-border trade 120,000 120,000
Total Requirements 2,534,026 62,484 295,000 44,950 210,392 777,630 3,717,432
C. Surplus/deficit (A-B) 453,995 (15,000) 146,839 0 0 336,953 896,677
D. Potential Commercial exports (453,995) 15,000 (146,839) 0 0 0 0
E. Food aid import requirements 0 0 0 0 0 0 0
Source: Ministry of Agriculture and Livestock
2013 ANNUAL ECONOMIC REPORT
11
2.2.3. Livestock
Livestock production posted a positive improvement in 2013 compared to 2012. This was on account of
improved livestock infrastructure development, increased artificial insemination, livestock disease control
and prevention and improved breeding methods at the livestock breeding centres.
Goat production increased by 172.0 percent to 3.0 million in 2013 from 1.1 million in 2012. Similarly,
sheep production rose by 36.0 percent to 816,397 from 600,835 in 2012. This was an indication that
farmers were adopting goat and sheep farming in addition to the traditional cattle rearing. Production of
cattle, poultry and pigs also increased by 9.0 percent, 14 percent, and 13 percent, respectively (see Table
4).
Table 4: Livestock Estimates, 2012-2013
Species 2012 2013 % Change 2013/2012
Cattle 3,603,452 3,932,269 9.0
Goats 1,112,503 3,023,585 172.0
Pigs 1,347,437 1,517,492 13.0
Poultry 98,587,625 112,791,669 14.0
Sheep 600,835 816,397 36.0
Source: Ministry of Agriculture and Livestock
Milk production increased by 19.0 percent to 5.8 million litres from 4.9 million litres in 2012 (see Table 5).
This was on account of increased dairy farmers coupled with the opening up of more milk collection
centres and the cattle restocking exercise.
Table 5: Milk Production Estimates in Litres, 2011-2013
Year 2011 2012 2013 % Change 2013/2012
Milk production 3,417,167 4,902,723 5,833,771 19.0
Source: Ministry of Agriculture and Livestock
In 2013, livestock slaughter increased substantially except for pigs which registered a decline (see Table
6). The decline in pigs slaughtered was on account of the outbreak of the swine fever disease which
affected Lusaka province resulting in the ban of movements of pigs into and out of Lusaka.
Table 6: Livestock Slaughters, 2012-2013
Species 2012 2013 % Change 2013/2012
Cattle 1,217,490 1,923,517 58.0
Goats 80,744 201,324 149.0
Pigs 189,892 113,343 (40.0)
Poultry 24,840,000 53,649,839 116.0
Sheep 9,954 10,538 6.0
Source: Ministry of Agriculture and Livestock
12
2.2.4. Fisheries
During the review period, fish production at selected fishery areas reduced by 16.9 percent to 29,657
tonnes from 35,688 tonnes in 2012 (see Table 7). This was partly on account of continued depletion of
fish stock attributable to poor fishing methods.
Table 7: Production of Fish by Selected Fishery Area (tonnes), 2011-2013
Fishery 2011 2012 2013 % Change 2013/2012
Tanganyika 15,953 16,341 10,310 (36.9)
Kariba 9,454 16,261 16,341 19.43
Lukanga 1,007 3,086 3,545 14.87
Total 26,414 35,688 29,657 (16.9)
Source; Ministry of Agriculture and Livestock
Aquaculture production, however, increased by 56.1 percent to 20,271 tonnes from 12,988 tonnes in
2012 (see Table 8). This was largely on account of increased activities in cage aquaculture and coming
on stream of Yalelo Fisheries based on Lake Kariba and Bangweulu, and Mpende Fisheries based on
Lake Tanganyika in the aquaculture industry.
Table 8: Aquaculture Production of Fish (tonnes) by Released Species, 2011-2013
Year 2011 2012 2013 % Change 2013/2012
Total 10,291 12,988 20,271 56.07
Source: Ministry of Agriculture and Livestock
Fish exports increased by 174.0 percent to 137 Mt from 50 Mt in 2012. This was largely on account of
increased demand for Nile perch in East and West Africa. In addition, Kapenta and Clarius species were
exported to Democratic Republic of Congo (DRC), Namibia and South Africa.
Imports increased by 82.4 percent to 28,666 Mt compared to 15,720 Mt in 2012 on account of increased
demand for fish in the country. The main sources of imports were Zimbabwe, Mozambique, Malawi,
Namibia, China, Hong Kong, Korea Republic and Thailand.
Table 9: Exports and Import of Fish in Mt, 2011-2013
Exports of Fish Imports of Fish
Year 2011 2012 2013 % Change 2013/2012 Year 2011 2012 2013 % Change 2013/2012
Exports (MT) 155 50 137 174 Imports (MT) 16,077.53 15,720 28,666 82.4
Source; Ministry of Agriculture and Livestock
2013 ANNUAL ECONOMIC REPORT
13
2.3. MINING
Output in the mining and quarrying sector increased by 5.9 percent in 2013 compared to negative 2.7
percent in 2012. This was due to an increase in mineral production at the major mines and the coming on
stream of a new mine. In an effort to improve compliance, Government continued to implement Statutory
Instrument No.34 of 2012, which made it mandatory for mining rights holders to submit detailed annual
reports and programmes of operation for the subsequent years.
Total Copper production marginally increased by 0.6 percent to 790,007 Mt from 785,642 Mt in 2012.The
outturn was attributed to 12.3 percent increase in copper output to783,468 Mt from 697,918 Mt in 2012by
large mines (see Figure 1). The coming on stream of Lubambe Mine which produced 22,135 Mt
representing 22.7 percent and a significant increase in output at Kansanshi, Lumwana Mine, Mopani
Copper Mine and China Non-Ferrous Mining Corporation (CNMC) contributed to the positive sector
performance.
Figure 1: Copper Production for Large Mines (Mt), 2012-2013
Source: Ministry of Mines, Energy and Water Development
Gold output increased by 126 percent to 4,984 Kg from 2,199.1 Kg in 2012. Coal production at Maamba
Collieries also increased to 148,768 Mt from 121,024 Mt in 2012.
697,918
783,468
640,000
660,000
680,000
700,000
720,000
740,000
760,000
780,000
800,000
2012 2013
2012 2013
14
2.4. MANUFACTURING
Growth in the manufacturing sector based on the third quarter Index of Industrial Production, was positive
at 3.2 percent which was lower than the 8.5 percent registered in 2012. Growth was largely driven by the
textile, clothing and leather, paper and paper products, chemicals, rubbers, and plastics, non-metallic
mineral products, basic metal industries, and the food, beverages and tobacco sub-sectors (see Table
10).
The food, beverages and tobacco subsector which constitutes the largest share of the manufacturing
sector grew at a slower rate of 4.5 percent in 2013 compared to 8.5 percent in 2012, partly on account of
a slowdown in the agriculture sector. Growth for the fabricated metal products and wood and wood
products sub-sectors was negative, amidst increased economic activities particularly in the construction
industry.
Table 10: Index of Industrial Production, 2012-2013
Period
Manufacturing
Total Manufacturing
Food,
Beverages &
Tobacco
Textile,
Clothing &
Leather
Wood &
Wood
Products
Paper &
Paper
Products
Chemicals,
Rubbers &
Plastics
Non-
metallic
Mineral
Products
Basic Metal
Industries
Fabricated
Metal
Products
Weight 0.511 0.235 0.060 0.006 0.017 0.059 0.025 0.009 0.100
2011 10.6 9.3 (54.7) 6.1 18.4 7.2 25.0 (0.9) 16.6
2012 Q1 18.6 21.6 (7.7) 5.6 16.9 12.9 31.7 4.6 11.8
2012 Q2 5.8 4.7 (13.7) 2.0 15.5 12.7 5.6 19.0 4.4
2012 Q3 3.3 4.0 5.9 6.2 19.1 7.3 1.9 14.9 (3.3)
2012 Q1 to Q3 8.5 8.8 (6.8) 4.4 17.1 11.4 11.2 12.9 2.8
2012 Q4 0.0 3.1 69.9 3.7 6.5 5.9 0.7 18.3 (19.3)
2012 6.0 7.1 3.5 4.2 14.1 10.1 8.1 13.9 (3.7)
2013 Q1 3.7 3.2 21.8 (5.3) 18.0 8.0 2.6 7.2 (3.3)
2013 Q2 1.1 3.3 18.6 (0.3) 3.6 9.2 2.1 4.7 (16.6)
2013 Q3 4.9 6.6 6.1 0.3 1.2 19.3 5.0 5.2 (6.0)
2013 Q1 to Q3 3.2 4.5 18.4 (1.9) 7.7 11.2 3.3 5.6 (8.5)
Source: Central Statistics Office
2013 ANNUAL ECONOMIC REPORT
15
2.5. ENERGY
In 2013, the energy sector grew by 5.9 percent compared to a growth of 4.1 percent in 2012. This was
attributed to increased electricity generation and reliability in the supply of petroleum products.
2.5.1Electricity Sub-Sector
Electricity Generation and Consumption
Electricity generation increased by 6.4 percent to 13,782,035Mwh from 12,954,051Mwh in 2012 (see
Table 11). This was on account of increased electricity generation at major hydro power stations and
coming on stream of 180Mw from the Kariba North Bank Extension Project. Electricity generation at
diesel power stations, however, declined due to the connection of Kaputa to the national grid. Similarly,
generation at mini-hydro power stations was affected by the ongoing rehabilitation and upgrading of some
stations.
Table 11: Electricity Generation, 2012-2013
2012 2013 % Change 2013/2012
Diesel 18,899 16,789 (11.2)
Mini hydro 105,462 97,636 (7.4)
Major hydro 12,426,815 13,263,634 6.7
Lunsemfwa 402,875 403,976 0.3
Total 12,954,051 13,782,035 6.4
Source: Zesco Limited
Electricity consumption increased by 5.1 percent to 10,845,651 Kwh from 10,317,408 Kwh in 2012. The
construction, mining (quarries) and transport sectors registered increases in electricity consumption of
38.2 percent, 83.1 percent and 19.6 percent, respectively. This was explained by high demand for power
to support increased economic activities. Consumption in the manufacturing and trade sectors, however,
declined (see Table 12). In terms of shares, the mining sector continued to consume the largest
proportion at 54.7 percent followed by the services sector at 31.0 percent.
Table 12: Electricity Consumption by Sector (Million Kwh), 2012-2013
2012 2013 % Change 2013/2012 Share of Consumption by Sector %
Agriculture 244,456 270,302 10.6 2.5
Construction 12,697 17,545 38.2 0.2
Energy and water 81,768 71,011 (13.2) 0.7
Finance and property 433,987 499,744 15.2 4.6
Manufacturing 505,991 397,067 (21.5) 3.7
Mining 5,554,379 5,929,125 6.7 54.7
Mining (quarries) 19,104 34,979 83.1 0.3
Others 117,508 120,928 2.9 1.1
Services 3,187,159 3,360,846 5.4 31.0
Trade 136,652 115,762 (15.3) 1.1
16
2012 2013 % Change 2013/2012 Share of Consumption by Sector %
Transport 23,702 28,342 19.6 0.3
Totals 10,317,403.00 10,845,651 5.1 100.0
Source: Zesco Limited
Exports and Imports of Electricity
Export of electricity in 2013increased by 10.6 percent to 1,083,434 Mwh from 979,715 Mwh in 2012 on
account of increased generation. Consistent with increased generation, imports declined by 55.4 percent
to 72,952 Mwh from 163,730Mwh in 2012.
Figure 2: Export and Imports of Electricity, 2012-2013
Source: Zesco Limited
2.5.2 Petroleum
In the year under review, the supply of petroleum products continued to be influenced by crude oil prices
on the international market and the exposure to exchange rate fluctuations. A total of 518,013 Mt of feed
stock was imported compared to 642,683 Mt in 2012. On the demand side, a significant increase in
consumption was recorded in Liquidified Petroleum Gas (LPG) while a decrease was registered in
consumption of Heavy Fuel oil and Kerosene (see Table 13).
9
7
9
,
7
1
5
1
,
0
8
3
,
4
3
4
163,730
72,952
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
2012 2013
Exports Imports
2013 ANNUAL ECONOMIC REPORT
17
Table 13: National Consumption of Petroleum Products, 2011-2013
Product (Unit of Measure) 2011 2012 2013 % Change 2013/2012
Diesel (Litres) 679,806,991.20 795,007,150.42 795,385,489.00 0.1
Petrol (Litres) 242,830,715.29 312,298,963.87 367,471,807.82 17.7
Jet-A1 (Litres) 40,741,338.00 61,846,040.00 6,016,080.00 0.3
Kerosene (Litres) 24,872,286.07 18,336,473.57 15,438,344.61 (15.8)
Heavy Fuel Oils (Kilogram) 49,461,237.04 60,222,381.00 50,793,370.00 (15.7
LPG (Kilograms) 2,424,127.43 657,622.40 3,021,486.29 359.5
Source: Energy Regulation Board
Domestic prices of petroleum products increased following the removal of the 5.0 percent import duty on
petroleum feedstock and application of the strategic reserves fund cost-line of K0.15/litre for all petroleum
products. The pump prices of petrol increased by 21.4 percent to K9.91/litre, 21.5 percent for diesel to
K9.20/litre and 32.6 percent for kerosene to K6.83/litre, respectively. At regional level, prices of petrol and
diesel remained higher in Zambia relative to most countries within the sub-region except for Malawi which
had a higher price of petrol (see Figure 3).
Figure 3: Comparison of Regional Prices for Petrol and Diesel (US$ per litre)
Source: Energy Regulation Board
1.85
1.73
1.39
1.42
1.30 1.30
0.93
1.50
1.60
1.07
1.28
1.10
0.72 0.72
-
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00
Malawi Zambia South Africa Uganda Kenya Tanzania Mozambique
Price of Petrol (US$) Price of Diesel (US$)
18
2.6. TOURISM
The tourism sector in 2013 grew by 2.2 percent compared to negative growth of 2.6percent registered in
2012. Growth was partly due to an increase in tourist arrivals boosted by the hosting of the 20
th
Session
of the United Nations World Tourism Organization (UNWTO) General Assembly. The sector also
recorded an increase in employment by 82.1 percent to 44,292 from 24,318 in 2012 partly on account of
enhanced investments in the hospitality industry triggered by the co-hosting of the UNWTO.
2.6.1. Tourist Arrivals
Tourist arrivals in 2013 increased by 6.5 percent to 914,576 from 859,088 in 2012.The majority of tourists
originated from within Africa followed by Europe (see Table 14).
Table 14: International Tourists Arrivals by Country of Origin, 2011-2013
Country of Origin 2011 2012 2013 % Change 2013/2012
Africa 652,276 654,114 720,467 10.14
Europe 113,831 65,826 78,543 19.3
North America 45.537 29,344 37,397 27.4
South America 6,131 2,215 3773 70.3
Asia & Pacific 102,524 107,589 74,396 (30.9)
Total 920,299 859,088 914,576 6.5
Source: Ministry of Tourism and Arts
2.6.2. Bed and Room Occupancy Rates
Consistent with the increase in tourist arrivals, room and bed occupancy rates rose by 73.0 percent and
79.0 percent from 69.0 percent and 72 percent registered in 2012, respectively (see Table 15).
Table 15: Employment, Room and Bed Occupancy Rates, 2011-2013
Description 2011 2012 2013
Number of Rooms 32,243 66,961 73,991
Number of Beds 56,681 93,722 124,982
Room Occupancy Rates 52% 69 % 73%
Bed Occupancy Rates 68% 72% 79%
Employment 24,318 44,292 57,337
Source: Ministry of Tourism and Arts
2.6.3. Tourist visits to National Parks
Tourist visits to major national parks also rose by 30.6 percent to 77,282 from 59,196 in 2012 (see Table
16). South Luangwa National Park continued to account for the largest share of the total visits at 53.0
percent largely due to improved access roads and the availability of the big five wild species of the world.
2013 ANNUAL ECONOMIC REPORT
19
Table 16: Tourist Arrivals at Major National Parks, 2012-2013
National Park 2012 2013 Share of Total Visits % Change 2013/2012
Kafue 5,414 9,085 11.8 67.81
Lower Zambezi 6,730 9,371 12.1 39.24
Mosi-oa-Tunya 13,433 17,883 23.1 33.13
South Luangwa 33,619 40,943 53.0 21.79
Total 59,196 77,282 100.0 30.55
Source: Zambia Wildlife Authority
In terms of origin, the majority of tourists that visited the national parks were from Europe accounting for
35.3 percent while 25.7 percent local tourist (see Table 17).
Table 17: Tourists Visits to National Parks by Area of Origin, 2012-2013
Region 2012 2013 Share of Total
USA 9,411 12,967 16.8
Europe 20,292 27,254 35.3
Asian Pacific 4,029 5,851 7.6
South America 1,905 1,110 1.4
Zambia 15,897 19,862 25.7
Other African Countries 6,168 10,238 13.2
Total 57,707 77,282 100.0
Source: Zambia Wildlife Authority
In the year under review, the safari hunting ban continued in a bid to preserve wildlife and facilitate the
conducting of a wildlife census. In this regard, revenue collection from hunting blocks declined to
K1,883,956 million from K21,774,992.55 million (see Table18).
Table 18: Hunting Blocks and Unfenced Private Wildlife Estates
No. Safari operate Hunting block Revenue
1 MVU Safaris Mufunta 139,498.00
2 BIMM Safaris Luembe 289,080.00
3 Alfa Recreation Sichifulo 118,430.40
4 Royal Zambezi Chiawa -
5 Muchinga Adventure Tondwa 174,979.20
6 Miyombo Safaris East Musalangu 20,961.60
7 Busanga Trails Mukungula 46,886.40
8 Nyampala Safaris Rufusa 116,424.00
9 Sable Transport Chisomo -
10 Nyamvu Safaris Nyamvu Safaris 143,668.80
11 Mushingashi Game Ranch Mushingashi Game Ranch 365,164.80
12 Nyakolwe Game Ranch Nyakolwe Game Ranch 263,947.20
13 Munyamadzi Munyamadzi 108,292.00
14 Kaindu Natural Resource Trust Kaindu Natural Resource Trust 96,624.00
Total 1,883,956.00
Source: Zambia Wildlife Authority
20
2.7. TRANSPORT AND COMMUNICATIONS
The Transport, Storage and Communications sector grew by 12.4 percent compared to 12.8 percent in
2012. This outturn was on account of positive performance in the road transport, air transport, and the
communications sub-sectors.
2.7.1. Air Transport
Passenger movements at the four international airports, Kenneth Kaunda International Airport (KKIA),
Simon Mwansa Kapwepwe International Airport(SMKIA), Harry Mwaanga Nkumbula International
Airport(HMNIA) and Mfuwe International Airport (MFW) increased by 13.3 percent to 1,543,144
passengers from 1,362,113 in 2012. Domestic passengers accounted for 300,055 while 1,243,089 were
international, representing an increase of 21.2 percent and 11.5 percent, respectively (see Table 19). The
positive performance was due to introduction of new flights by Ethiopian Airlines and Proflight Zambia.
The performance was further enhanced by increased flight frequencies by South African Airways, Kenya
Airways and Proflight Zambia.
Table 19: Passenger Performance at the Four Major Airports, 2012-2013
2012 2013 % Change 2013/2012
Domestic International Total Domestic International Total
KKIA 122,507 802,570 925,077 158,082 906,868 1,064,950 15
SMKIA 68,107 156,376 224,483 74,104 182,778 256,882 14
HMNIA 33,587 152,74 186,361 44,968 150,582 195,550 32
MFW 23,361 2,831 26,192 22,901 2,861 25,762 (2)
Total 247,562 1,114,551 1,362,113 300,055 1,243,089 1,543,144 13
Source: National Airports Corporation
Aircraft movements increased by 2.7 percent to 66,238 from 64,476 in 2012 (see Table 20). This was
attributed to increase in demand by passenger leading to a rise in flight frequencies by various operators.
Cargo transported by air, also increased by 64.3 percent to 22,886 Mt from 6,986.4 Mt in 2012 on
account of introduction of KLM Airlines direct route for export of flowers to the Netherlands.
Table 20: Aircraft Movement, 2012-2013
2012 2013 % Change 2013/2012
Domestic International Total Domestic International Total Domestic International Total
KKIA 20,571 15,136 35,707 21,519 16,229 37,748 5.0 7.0 5.7
SMKIA 7,186 4,672 11,858 5,852 5,321 11,173 (19.0) 13.0 (5.8)
HMNIA 7,894 5,487 13,381 8,118 4,940 13,058 2,84 (10.0) (2.4)
MFW 2,538 992 3,530 2,841 1,418 4,259 12.0 43.0 20.7
Total 38,189 26,287 64,476 38,330 27,908 66,238 (2.0) 6.0 2.7
Source: National Airports Corporation
2013 ANNUAL ECONOMIC REPORT
21
2.7.2. Road Transport
The road transport growth remained strong at 7.1 percent on account of an increase in the number of
passengers transported coupled with the upturn in the population of motor vehicles.
Passengers Transported
Passengers transported in 2013 increased by 25.3 percent to 68,294,420 from 54,521,875 passengers in
2012 (see Table 21). This was mainly as a result of efficiency and reliability in road transport and
consistent with increase in motor vehicle population particularly light passage vehicles.
Table 21: Number of Passengers Transported, 2011- 2013
2011 2012 2013 Share % Change 2013/2012
Taxi 1,467,300 2,200,950 2,934,600 4.3 33.3
Mini Bus 20,181,945 26,909,260 33,636,575 49.3 25.0
Midi Bus 11,141,260 16,711,890 22,282,520 32.6 33.3
Big Bus 7,013,475 8,699,775 9,440,725 13.8 8.5
Total 39,803,980 54,521,875 68,294,420 100 25.3
Source: Road Transport and Safety Agency
Motor Vehicle Population
In 2013, the motor vehicle population increased by 1.1 percent to 534,523 compared to 528,584 in 2012
(see Table 22). This was on account of an increase in all vehicle categories except the motor cycles
which declined by 81.5 percent. The light passenger vehicles continued to have the largest share at 61.7
percent followed by the light load vehicles at 18.0 percent.
Table 22: Population of Vehicles Registered, 2011- 2013
Vehicle Category 2011 2012 2013 Share % Change 2013/2012
Light Pass. Vehicle 236,830 265,835 329,932 61.7 24.1
Light Load Vehicle 72,899 89,675 96,201 18.0 7.3
Heavy Load Vehicle 44,765 64,978 67,922 12.7 4.5
Heavy Passenger Vehicle. 6,897 7,897 8,978 1.7 13.7
Motor Cycle 11,345 86,596 15,986 2.9 (81.5)
Tri-Cycle 245 621 982 0.2 58.1
Agriculture Tractor 1,768 2,897 3920 0.7 35.3
Agriculture. Trailer 245 320 498 0.1 55.6
Trailers 6,954 9,765 10,104 1.9 3.4
Total 381,948 528,584 534,523 100.00 1.1
Source: Road Transport and Safety Agency.
22
2.7.3. Railway Transport
The performance of the railway subsector was positive registering a growth rate of 24.2 percent largely
due to an increase in cargo transported. Cargo transported by rail increased by 23.2 percent to 1,014,216
Mt from 823,517 Mt in 2012 (see Table 23). The positive performance in cargo transported was attributed
to the on-going rehabilitation of the rail infrastructure and procurement of new wagons. Passengers
transported by rail, however, declined by 4.6 percent to 867,946 from 909,741 in 2012 largely on account
of a decline in passengers transported by Tanzania Zambia Railway (TAZARA).
Table 23: Passenger and Cargo Performance for TAZARA and ZRL, 2012-2013
Company Passengers transported Volume of cargo transported
2012 2013 % Change 2013/2012 2012 2013 % Change 2013/2012
ZRL/RSZ 192,608 247,062 28.3 594,050 749,165 26.1
TAZARA 717,133 620,884 (13.4) 229,467 265,051 15.5
Total 909,741 867,946 (4.6) 823,517 1,014,216 23.2
Source: Tanzania Zambia Railway and Zambia Railways Limited
2.7.4. Communications
The communications subsector registered a positive growth of 14.9 percent compared to 18.0 percent in
2012 mainly due to increased mobile traffic volumes and internet usage. There was, however, a reduction
in the mobile subscriber base.
Mobile Subscription
The mobile subscription base
1
decreased by 1.2 percent to 10,395,801 from 10,542,676 in 2012 on
account of a decrease in mobile subscriber base of 3.8 percent and 14.7 percent for Airtel Zambia and
Zamtel, respectively. The MTN Zambia mobile subscriber base, however, increased by 7.5 percent partly
on account of improved quality of the network (see Table 24).
Table 24: Subscriber Base, 2012-2013
Operator 2012 2013 % Change 2013/2012
Airtel Zambia 4,725,705 4,544,218 (3.8)
MTN Zambia 4,074,386 4,380,828 7.5
Zamtel Mobile 1,724,585 1,470,755 (14.7)
Total 10,524,676 10,395,801 (1.2)
Source: Zambia Information Communication and Technology Authority
1
This represents Active SIM Cards
2013 ANNUAL ECONOMIC REPORT
23
Consistent with the reduction in the mobile subscriber base, prepaid subscription marginally decreased to
10,359,159 compared to 10,473,343 in 2012 while post-paid subscribers reduced to 45,642 from 51,333
in 2012 (see Figure 4 and 5).
Figure 4: Pre-paid Subscriptions, 2012-2013
Source: Zambia Information Communication and Technology Authority
Figure 5: Post-paid Subscription, 2012-2013
Source: Zambia Information Communication and Technology Authority
4,517,762
4,363,709
1,468,688
4,702,130
4,047,228
1,723,985
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
5,000,000
Airtel MTN ZAMTEL
Prepaid 2013 Prepaid 2012
26,456
17,119
2,067
23,575
27,158
600
-
5,000
10,000
15,000
20,000
25,000
30,000
Airtel MTN ZAMTEL
2013 Postpaid 2012 Postpaid
24
In terms of the market share, Airtel Zambia continued to have the largest market at 44.0 percent followed
by MTN Zambia at 42.0 percent. The penetration rate, stood at 73.2 percent compared to 78.0 percent in
2012, attributed to the reduction in the number of subscribers and a rise in the population
2
.
Mobile Traffic Volumes
In 2013, incoming international minutes increased by 16.2 percent to 127,881,779 from 110,034,805 in
2012. Airtel Zambia and MTN Zambia registered increases of 20.5 percent and 18.7 percent,
respectively. International outgoing minutes, however, decreased by 19.6 percent to 88,443,381 from
110,034,805 in 2012 (see Table 25).
Table 25: Mobile International Incoming and Outgoing Minutes, 2012-2013
Operator International Incoming Minutes % Change 2013/2012 International Outgoing Minutes % Change 2013/2012
2012 2013 2012 2013
Airtel Zambia 75,694,082 91,177,200 20.5 75,694,082 43,298,070 (42.8)
MTN Zambia 26,386,681 31,320,254 18.7 26,386,681 30,300,729 14.8
Zamtel Mobile 7,954,042 5,384,325 (32.3) 7,954,042 14,844,582 86.6
Total 110,034,805 127,881,779 16.2 110,034,805 88,443,381 (19.6)
Source: Zambia Information Communication and Technology Authority
Domestic outgoing minutes increased by 5.3 percent to 7,145,675,344 from 6,789,033,791 in 2012 driven
by Zamtel marketing strategies which led to an increase of 1,268.1 percent. Airtel Zambia and MTN
Zambia however registered declines of 21.0 percent and 7.8 percent, respectively (see Table 26).
Domestic incoming minutes decreased by 35.3 percent to 676,739,112 from 1,046,738,529 in 2012.
Table 26: Mobile Domestic Outgoing and Incoming minutes for MNOs, 2012-2013
Outgoing Minutes % Change 2013/2012 Incoming Minutes % Change 2013/2012
Operator 2012 2013 2012 2013
Airtel Zambia 3,942,771,412 3,115,639,800 (21.0) 798,381,673 429,743,330 (46.2)
MTN Zambia 2,736,063,912 2,522,384,452 (7.8) 221,106,728 215,909,781 (2.4)
Zamtel Mobile 110,198,467 1,507,651,092 1,268.1 27,250,128 31,086,001 14.1
Total 6,789,033,791 7,145,675,344 5.3 1,046,738,529 676,739,112 (35.3)
Source: Zambia Information Communication and Technology Authority
Internet Usage and Provision
Internet usage increased by 1.2 percent to 2,534,363 from 2,330,822 on account of an increase in both
fixed wireless and mobile subscription (see Table 27). Fixed wireless subscription increased by 8.78
percent to 17,231 from 15,839 while mobile internet increased by 1.2 percent in 2012.
2 This refers to the total national population
2013 ANNUAL ECONOMIC REPORT
25
Internet penetration increased to 18.5 per 100 inhabitants in 2013 from 17.3 per 100 inhabitants in 2012.
This was on account of a rise in mobile cellular coverage of 79.4 percent coupled with the upgrade of
mobile networks by the three mobile network operators that enabled the provision of broadband internet
services in peri-urban and rural areas.
Table 27: Internet Usage, 2012-2013
Internet Usage Statistics 2012 2013
Internet Subscription – fixed wireless 15,839 17,231
Internet users Per 100 Inhabitants 0.12 0.13
Mobile Internet Users - Smartphones/Dongos 2,314,983 2,517,132
Mobile Internet users Per 100 Inhabitants 17.2 18.4
Internet Usage – fixed wireless & Mobile Internet Usage 2,330,822 2,534,363
Internet Usage Per 100 Inhabitants 17.3 18.5
Source: Zambia Information Communication and Technology Authority
2013 ANNUAL ECONOMIC REPORT
27
3.0 SOCIAL SECTOR DEVELOPMENTS
3.1. EDUCATION
In 2013, the performance of the education sector was satisfactory on account of increased net enrolments
in secondary schools and improved pupil-teacher ratio at primary school level. In addition, the number of
primary and secondary schools increased.
3.1.1. General Education
The number of schools offering primary education increased by 5.3 percent, to 8,801 in 2013 from 8,359
in 2012. At secondary school level, the number of schools increased by 3.9 percent (see Table 28). The
increase was on account of school infrastructure development and upgrading of some primary schools to
secondary schools.
Table 28: Number of Schools, 2011-2013
Level of Education 2011 2012 2013 % Change 2013/2012
Primary 8,729 8,359 8,801 5.3
Secondary 631 664 690 3.9
Total 9,360 9,023 9491 5.2
Source: Ministry of Education, Science, Vocational Training and Early Education
3.1.2. Enrolments
The number of pupils enrolled at primary school level decreased by 1.9 percent at 3,075,161from
3,135,442 in 2012. This was attributed to the normalising of the age for primary school enrolments. Girl
enrolments stood at 1,534,380 or 49.9 percent of the total primary enrolments.
Enrolments at secondary school level increased marginally percent to 743,955 from 743,175 in 2012.
This outturn was partly attributed to the increase in the number of school places. The enrolment of
females stood at 348,007 or 46.8 percent of the total learners compared to the male learners at 53.2
percent. The lower female participation was mainly due to early marriages, pregnancies and social
perceptions that discriminate against the girl child.
28
3.1.3. Gender Parity
At primary school level, the Gender Parity Index (GPI) stood at 0.99 indicating that for every 100 male
pupils enrolled, 99 females were also enrolled. Similarly, GPI at secondary school level was biased
towards males recorded at 0.88 (see Table 29).
Table 29: Enrolments and Gender Parity, 2011-2013
Primary School Secondary School
Gender 2011 2012 2013 2011 2012 2013
Female 1,528,149 1,566,876 1,534,380 318,812 344,523 348,007
Male 1,506,280 1,568,566 1,540,781 377,289 395,168 399,472
Total 3,034,429 3,135,442 3,075,161 696,101 743,175 743,955
GPI 0.99 0.99 0.99 0.85 0.86 0.88
Source: Ministry of Education, Science, Vocational Training and Early Education
3.1.4. Pupil Teacher Ratio
The Pupil Teacher Ratio (PTR) at primary school level improved to 56.1 pupils per teacher from 58.8 in
2012 on account of the recruitment of teachers. At secondary school level, however, the PTR worsened
to an average of 48.0 pupils per teacher compared to 25.6 in 2012 for Grade 8 to 9. At Grade 10 to 12,
the PTR worsened to 36.9 from 36.0 in 2012 (see Table 30).
Table 30: Pupil - Teacher Ratio, 2011-2013
Education Level 2011 2012 2013
Grade 1-7 52.2 58.5 56.1
Grade 8-9 36.8 25.6 48.0
Grade 10-2 25.3 36.0 36.9
Source: Ministry of Education, Science, Vocational Training and Early Education
3.1.5. Tertiary Education
Technical Education, Vocational and Entrepreneurship Training
The number of registered institutions providing Technical Education, Vocational and Entrepreneurship
Training (TEVET)increased to 268 from 230 in 2012 (see Table 31). This was largely as a result of the
increase in private owned institutions.
In terms of proportions, public/government owned institution however accounted for the largest share of
registered institutions at 31 percent, followed by private and church institutions which accounted for 29.1
and 19.4 percent, respectively. Community/NGO institutions accounted for 9.3 percent of registered
institutions, while the rest accounted for 11.2 percent.
2013 ANNUAL ECONOMIC REPORT
29
Table 31: Number of Registered Institutions by Ownership, 2012-2013
Ownership 2011 2012 2013 % Change 2013/2012
Public / Government 80 79 83 5.1
Private 107 54 78 44.4
Church 66 49 52 6.1
Community/ NGO 25 24 25 4.2
Trust 16 11 13 18.2
In-Company 80 13 17 30.8
Total 374 230 268 16.5
Source: Technical, Entrepreneurial and Vocational Education and Training Authority
Enrolment
The number of students in the TEVET institutions rose by 2.7 percent to 34,493 from 33,569 in 2012 with
all the programme categories registering increased enrolments (see Table 32). The increased enrolments
were partly due to the increased pass rate at Grade 12 in 2012. The business studies programme
continued to constitute the largest share of enrolments followed by Crafts programme.
Table 32: Student Enrolment by Programme and Gender, 2012-2013
2012 2013 % Change 2013/2012
Programmes Male Female Total Male Female Total
Business Studies 7,634 7,343 14,977 7,771 7,926 15,697 4.8
Secretarial Studies 4 1,637 1,641 6 1,675 1,681 2.4
Hotel and Tourism 1,284 2,305 3,589 1,308 2,351 3,659 2.0
Media and Applied Arts 1,157 2,283 3,440 1,192 2,329 3,521 2.4
Paramedical 183 207 390 186 210 396 1.5
Aviation 140 12 152 146 12 158 3.9
Craft Programmes 7,291 1,042 8,333 7,437 1,061 8,498 2.0
Advanced Certificate/ Technician Programmes 430 86 516 451 91 542 5.0
Diploma/Technologist Programmes 510 21 531 528 22 550 3.6
Total 18,633 14,936 33,569 19,026 15,467 34,493 2.8
Source: Technical, Entrepreneurial and Vocational Education and Training Authority
Teacher Education
Preliminary data indicates that total student enrolments at colleges of education increased by 2.2 percent
to 8,053 from 7,883 in 2012 (see Table 33). Male students accounted for the largest proportion of total
enrolments at 50.6 percent.
30
Table 33: College of Education Student Enrolments, 2011-2013
2011 2012 2013* % Change 2013/2012
Male 3,060 3,984 4,076 2.3
Female 2,720 3,899 3,977 2.0
Total 5,780 7,883 8,053 2.2
Source: Ministry of Education, Science, Vocational Training and Early Education
* Preliminary
University Education
In the year under review, Nkwame Nkhrumah, Copperbelt and Chalimbana Colleges of education were
upgraded into universities. This in part led to an increase in registered universities to 29 from 23 in 2012.
The University of Zambia and Copperbelt University continued to account for the largest share of total
enrolments
3
(see Table 34).
Table 34: Public Universities Enrolments by Gender, 2012-2013
2012 2013 % Change 2013/2012
Male Female Total Male Female Total
University of Zambia 8,184 6,725 14,909 8,438 6,886 15,324 2.8
Copperbelt University 4,508 1,887 6,395 4,598 1,962 6,561 2.6
Mulungushi University 261 229 490 271 243 514 4.9
Total 12,953 8,841 21,794 13,307 9,092 22,399 2.8
Source: Ministry of Education, Science, Vocational Training and Early Education
3.2. HEALTH
During the year under review, the delivery of health care services improved as reflected in the reduced
incidence rate in seven of the top ten diseases (see Table 35). The availability of essential drugs and
other medical supplies remained satisfactory.
Table 35: Top ten (10) Causes of Morbidity for All Age Groups, 2012-2013
Disease Name
2012 2013 % Change
incidence Cases
(ALL ages)
Incidence
per 1,000 pop
Cases
(ALL ages)
Incidence
per 1,000 pop
Malaria 4,863,012 343.947 5,222,099 358.5 4.23
Respiratory Infection: non-pneumonia 4,632,797 327.664 5,226,362 358.8 9.50
Diarrhoea (non-bloody) 1,288,810 91.154 1283821 88.1 (3.35)
Muscular skeletal and connective tissue (not trauma) 918,384 64.955 918705 63.1 (2.86)
Digestive system: (not infectious) 591,540 41.838 612338 42 0.39
Trauma: Other Injuries, wounds 589,736 41.71 530515 36.4 (12.73)
Respiratory Infection: pneumonia 496,522 35.118 501612 34.4 (2.04)
Skin Diseases (not infectious) 392,104 27.732 349889 24 (13.46)
Eye diseases (infectious) 377,277 26.684 349236 24 (10.06)
Dental Carries 358,820 25.378 333330 22.9 (9.76)
Source: Ministry of Health
3 This is only for the three public universities in Table 34
2013 ANNUAL ECONOMIC REPORT
31
3.2.1. Disease Burden
Malaria
In 2013, the incidence rate of malaria increased to 358.5 per 1,000 population from 337.5 per 1,000
population in 2012. The total diagnosis of disease increased by 7.3 percent to 5,222,099 from 4,865,995
cases in 2012. However, the number of in-patient deaths reduced by 57.9 percent to 1,358 from 3,233 in
2012. Notwithstanding this, malaria continued to be the leading cause of mortality.
Respiratory Infections
Respiratory infections (pneumonia and non-pneumonia) were the leading cause of illness with 5,727,974
cases seen at Out-Patients Department (OPD) and In-Patient Department (IPD), claiming a total number
of 1,255 In-patient deaths. Of the deaths, 964were caused by pneumonia while 291 by non-pneumonia
infections.
HIV/AIDS
In 2013, close to 500,000 people received lifesaving Anti-retroviral (ARVs) in the public health facilities
compared to 480,925 in 2012. Out of the 500,000 on ARVs, 32,000 were children below the age of 15
years, representing 8.0 percent of those on treatment.
Over 95.0 percent of the patients were still on the first line treatment while mothers needing Prevention of
Mother to Child Transmission (PMTCT) reduced by 7.4 percent to 90,458 from 97,664 in 2012. During the
period under review, Government introduced option B+ protocol which makes it mandatory for any HIV
positive pregnant woman to be on Anti-retroviral Therapy (ART). As a result, 90,458 received ART
compared to 28,159 in 2012.
3.2.2. Maternal And Child Health
Preliminary data indicates that antenatal coverage in 2013 decreased by 18.8 percentage points to 79.7
percent from 98.5 percent in 2012, whilst average antenatal visits increased marginally by 0.03
percentage points. Deliveries by institutional, skilled personnel and trained traditional birth attendants
declined by 2.9 percentage points, 9.4 percentage points and 2.0 percentage points, respectively (see
Table 36).
32
Table 36: Maternal Health and Family Planning Indicators, 2012 -2013
Indicator 2012 2013 % Point Change 2013/2012
First Antenatal Coverage 98.5 79.7* (18.8)
Average Antenatal Visits 2.75 2.78 0.03
Institutional deliveries 48.6 45.7* (2.9)
Deliveries by Skilled personnel 48.6 39.2 (9.4)
Trained traditional birth attendants (tTBAs) 5.6 3.6 (2.0)
First Postnatal Attendance 72.5 71 (1.5)
Source: Ministry of Health
* Preliminary
Preliminary results indicate that there was deterioration in child and maternal health indicators. Fully
immunized coverage of children under the age of one year declined to 80.0 percent from 99.0 percent in
2012 (see Figure 6).
Figure 6: Full Immunization Coverage, 2010-2013
Source: Ministry of Health
3.2.3. Human Resources
In 2013, a total of 22,051 human resource personnel were in the health sector compared to 21,135 in
2012 representing 4.3 percent increase.916 trained professionals were recruited with radiography posting
the largest increase at 44.0 percent followed by pharmacy at 22.0 percent. Recruitment of doctors and
nurses also increased by 8.6 percent and 5.6 percent, respectively.
94
93
99
80
0
20
40
60
80
100
120
2010 2011 2012 2013
2010 2011 2012 2013
2013 ANNUAL ECONOMIC REPORT
33
In terms of share of total recruitments, nurses accounted for the largest share at 58.6 percent followed by
pharmacists. Despite the recruitment, the human resource situation remained below the recommended
levels with a shortfall of 22,712 against the approved establishment of 44,763 (see Table 37).
Table 37: Trends in Human Resource Establishment, 2012-2013
Staff Category 2011 2012 2013 % Change 2013/2012 Recommended Staff Gap (2013 less Recommended)
Clinical Officers 1,509 1,630 1,603 (1.7) 4813 (3,210)
Dentistry 278 307 321 4.6 865 (544)
Doctors 1,076 1,150 1,249 8.6 2939 (1,690)
Nutrition 170 193 194 0.5 330 (136)
Biomedical Sciences 713 751 631 (16.0) 2023 (1,392)
Pharmacy 777 800 978 22.3 1,108 (130)
Physiotherapy 297 331 378 14.2 421 (43)
Radiography 276 305 439 43.9 483 (44)
Midwives 2,753 2,773 2,783 0.4 6106 (3,323)
Nurses 7,996 9,575 10,112 5.6 17,497 (7,385)
Environmental Health 1,367 1,461 1,504 2.9 2063 (559)
Other Health Workers 1,683 1,859 1,859 0.0 6,115 (4,256)
Total 18,895 21,135 22,051 4.3 44,763 (22,712)
Source: Ministry of Health
In terms of national clinical workers per 1000 population, there was a reduction to 1.4 per 1000 population
from 1.5 per 1000 population in 2012 (see Table 38). This outturn was below the World Health
Organisation (WHO) recommended frontline health personnel level of 2.5 per 1000 population.
Table 38: National Clinical Workers per 1,000 Population, 2012- 2013
Cadre Head Count 2012 per 1000 Pop Head Count 2013 per 1000 Pop
Clinical Officers 1,630 0.1153 1603 0.1101
Dentistry 307 0.0217 321 0.0220
Doctors 1,150 0.0813 1249 0.0858
Nutrition 193 0.0137 194 0.0133
Biomedical Sciences 751 0.0531 631 0.0433
Pharmacy 800 0.0566 978 0.0671
Physiotherapy 331 0.0234 378 0.0260
Radiography 305 0.0216 439 0.0301
Midwives 2773 0.1961 2783 0.1911
Nurses 9,575 0.6772 10112 0.6942
Environmental Health 1,461 0.1033 1504 0.1033
Other Health Workers 1,859 0.1315 12 0.0008
Total 21,135 1.5 20,204 1.4
Source: Ministry of Health
35
4.0 BUDGET PERFORMANCE
The 2013 budget outturn was not in line with the projections, evidenced by lower than expected revenues
and higher than programmed expenditures. Total Revenue and Grants amounted to K25.6 billion
representing 2.7 percent below target while expenditures at K33.8 billion were above target by 6.6
percent. This resulted into an overall deficit of K8.2 billion representing 6.8 percent of GDP.
4.1. REVENUE PERFORMANCE
Total revenues and grants amounted to K25.6 billion against the target of K26.3 billion, representing 21.2
percent of GDP (see Table 39). The outturn was mainly attributed to under performance on income tax
and non-receipt of pledged support from some Cooperating Partners. Domestic revenues accounted for
96.0percent of the total revenues, while grants accounted for 4.0 percent of the total revenue
representing 20.3 percent and 0.8 percent of GDP, respectively.
Table 39: Revenue Performance, 2013
2013 budget Projection 2013 Preliminary % of GDP
K'000 K'000
I Revenue and Grants 26,271,430.06 25,551,162.10 21.2
II Revenue and Direct Budget Support 25,344,958.84 24,833,312.14 20.6
III Domestic Revenue 24,745,891.41 24,532,277.22 20.3
Tax Revenue 23,535,894.16 23,082,572.35 19.1
a. Income Tax 12,809,445.26 11,574,501.15 9.6
Company Tax 4,788,589.85 2,853,759.70 2.4
o/w Mining 2,946,823.38 1,082,894.04 0.9
Non-Mining 1,841,766.46 1,770,865.67 1.5
Pay As You Earn (PAYE) 5,018,655.41 5,682,242.55 4.7
Other Income tax - Withholding Tax 1,080,170.00 1,277,771.43 1.1
Mineral Royalty 1,922,030.00 1,760,727.47 1.5
c. Value Added Tax (VAT) 6,016,418.90 7,347,963.78 6.1
Domestic Value-Added Tax (VAT) 500,637.17 1,198,304.64 1.0
VAT on Imports 5,515,781.73 6,149,659.14 5.1
d. Customs and Excise Duty 4,710,030.00 4,160,107.42 3.4
Customs (Import Tariffs) 2,113,850.00 1,808,437.78 1.5
Excise Duties 2,596,180.00 2,351,669.64 1.9
o/w Fuel Levy 659,155.45 731,802.67 0.6
Rural Electrification Fund 44,717.00 35,380.88 0.0
Non Tax Revenue 1,209,997.26 1,449,704.87 1.2
User Fees and Charges 283,709.00 852,167.03 0.7
RTSA 505,000.00 351,364.26 0.3
ERB Licence Fees 73,712.00 0.00 0.0
ZICTA Fees 176,305.65 523.00 0.0
Dividends and Interest 6,000 52,577.43 0.0
Medical Levy 384.00 0.0
2013 ANNUAL ECONOMIC REPORT
36
2013 budget Projection 2013 Preliminary % of GDP
K'000 K'000
Exceptional Revenues 165,270.60 192,688.81 0.2
o/w Fertiliser Recoveries 165,270.6 103,753.95 0.1
Other Revenues 0.00 88,934.86 0.1
IV Grants 1,525,538.642 1,018,884.88 0.8
Direct Budget Support 599,067.43 301,034.93 0.2
Sector Budget Support 69,320.10 0.1
Project Support 926,471.22 648,529.85 0.5
o/w SWAPS 648,529.85 0.5
GDP 120,780,152.89
Source: Ministry of Finance
4.1.1 Domestic Revenue
Domestic revenues amounted to K24.5 billion, and were below target by 0.9 percent largely on account of
lower collections on Income Tax. Tax revenues amounted to K23.1 billion while Non-Tax revenues were
K1.4 billion.
4.1.2 Tax Revenues
Total tax revenues amounted to K23.1 billion and were below the target by 1.9 percent largely on account
of under-performance on income tax collections.
Total Income Tax collections at K11.6 billion were below the target by 9.6 percent on account of lower
than expected collections from company income taxes particularly from the mining sector. Mineral Royalty
collections at K1.8 billion were also below target by 8.4 percent. Collections from Pay As You Earn
(PAYE) and other income related taxes such as Withholding Taxes at K5.7 billion and K1.3 billion were
above target by 13.2 percent and 18.3 percent, respectively.
Value Added Tax (VAT) collections at K7.3 billion were above target by 22.1 percent largely on account of
the enhanced enforcement mechanisms and audits.
Collection of Customs and Excise duties at K4.2 billion were below target by 11.7 percent. This was
mainly due to removal of customs duty on a wide range of mechanical and electrical machines, and
machine tools.
4.1.3 Non Tax Revenue
Non-tax revenue collections amounted to K1.4 billion and were above the target by 19.8 percent. The
favourable performance was attributed to higher than projected collections on User Fees and Charges
which were above target by 200.4 percent at K852.7 million and inclusion of fees charged by Zambia
2013 ANNUAL ECONOMIC REPORT
37
Information Communication Technology Authority (ZICTA) and Energy Regulation Board (ERB) on-
budget (see Table 38). However, recoveries under the Farmer Input Support Program (FISP) amounted
to K103.7 million, and were below target by 37.2 percent.
4.1.4 Grants
In 2013, a total of K1.0 billion was received as Grants against the target of K1.5 billion. The lower than
projected receipts were attributed to non-receipt of pledged support from some Cooperating Partners.
Direct Budget Support amounted to K0.3 billion while Sector Budget Support was K0.069 billion and
project support amounted to K0.65 billion (see Figure 7).
Figure 7: Performance on Revenue and Grants, (K’000)
Source: Ministry of Finance
4.2. EXPENDITURE PERFORMANCE
Total Expenditure, excluding amortisation, at K33.8 billion was above target by 6.6 percent (see Table
40). This was largely attributed to higher than programmed releases on Grants and Other Payments, Fuel
Subsidy, Personal Emoluments and Roads.
Table 40: Central Government Operations, 2013
2013 budget Projection 2013 Preliminary In % GDP
K'000 K'000
TOTAL EXPENDITURE 31,685,308.71 33,790,129.09 28.0
o/w DOMESTICALLY FINANCED 29,521,725.07 33,739,509.68 27.9
Foreign Financed 2,163,583.65 50,619.40 0.0
EXPENSES 22,131,496.84 25,501,443.82 21.1
Personal Emoluments 11,015,615.99 11,897,065.43 9.9
23,535,894
1,209,997
1,525,539
23,082,572
1,414,707
451,955
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
Tax Revenue Non Tax Revenue Grants
K
'
0
0
0
2013 Projection 2013 Actual
38
2013 budget Projection 2013 Preliminary In % GDP
K'000 K'000
o/w Basic PEs 10,077,977.49 11,424,343.76 9.5
Other Emoluments 835,692.76 407,457.70 0.3
o/w Overseas Allowance 268,083.04 287,877.87 0.2
Constitutional Posts 101,945.74 65,263.97 0.1
Public Service Retrenchment Programme 15,960.00 - 0.0
Use of Goods and Services 4,755,719.31 4,443,411.83 3.7
Foreign Financed 111,391.75 77,974.22 0.1
Domestically Financed 4,644,327.57 4,365,437.60 3.6
Ordinary 4,359,041.17 3,969,311.92 3.3
Public Affairs and Summit Meetings 61,286.40 144,435.67 0.1
National Constitution Conference 20,000.00 28,010.22 0.0
By-Elections 4,000.00 64,774.20 0.1
Compensation and Awards 200,000.00 158,905.61 0.1
Interest Payments 2,020,844.15 1,873,890.48 1.6
Domestic Debt 1,521,260.08 1,512,780.51 1.3
External Debt 499,584.07 361,109.97 0.3
Grants and Other Payments 3,239,105.10 5,471,988.42 4.5
Foreign Financed 326,152.45 228,306.72 0.2
Ordinary Grants 1,982,298.84 1,995,448.00 1.7
o/w Road Fund Agencies 166,233.49 29,802.56 0.0
Zambia Revenue Authority 405,681.80 486,661.00 0.4
o/w ZRA-Grant 355,681.80 436,661.00 0.4
ZRA-Mordernisation 50,000.00 50,000.00 0.0
Farmer Input Support Programme 499,972.00 1,122,467.13 0.9
Food Security Pack 25,000.00 28,771.58 0.0
Fuel Subsidy - 1,610,334.00 1.3
Social Benefits 739,664.07 703,898.17 0.6
Foreign 54,626.52 38,238.57 0.0
Pension Fund 616,872.19 616,872.19 0.5
o/w Grant 238,567.34 238,567.34 0.2
Financing Gap 378,304.84 378,304.84 0.3
Other 68,165.36 48,787.42 0.0
o/w Gratuity - Constitutional Posts 16,960.89 2,000.00 0.0
Other Expenses 344,588.21 1,111,189.50 0.9
Contingency 44,588.21 - 0.0
Food Reserve Agency 300,000.00 1,111,189.50 0.9
ASSETS 9,139,879.10 7,868,016.66 6.5
Non-Financial Assets 8,722,292.20 7,594,682.51 6.3
Rural Electrification Programme 46,000.00 46,000.00 0.0
ZESCO Power Rehabilitation 984,347.53 369,539.56 0.3
Railway Line Rehabilitation 642,600.00 618,766.00 0.5
GRZ Roads 2,527,757.97 3,611,529.90 3.0
GRZ Road Fund(Including Road Agencies) 530,180.00 0.4
o/w Fuel Levy 195,468.00 0.2
Ordinary 2,850,173.78 1,778,858.00 1.5
o/w Water and Sanitation 250,075.00 66,715.99 0.1
Foreign Financed 1,671,412.93 1,169,989.05 1.0
Financial Assets 417,586.91 273,334.15 0.2
Credit Union 70,000.00 70,000.00 0.1
Empowerment Funds 73,126.09 71,520.58 0.1
Private sector Project Finance 255,000.00 106,938.00 0.1
2013 ANNUAL ECONOMIC REPORT
39
2013 budget Projection 2013 Preliminary In % GDP
K'000 K'000
Ordinary Financial Assets 19,460.82 24,875.57 0.0
LIABILITIES 413,932.77 420,668.61 0.3
Suppliers of Goods & Services (MoF) 50,000.00 133,295.08 0.1
Other Liabilities 363,932.77 287,373.53 0.2
Changes in Balance (9.80) 34,247.01 0.0
FISCAL BALANCE: Surplus(+)/Deficit(-) (5,413,888.46) (8,204,719.98) -6.8
FINANCING 5,413,888.46 8,204,719.98 6.8
Net Domestic Financing 1,863,437.59 5,948,682.29 4.9
o/w Domestic Financing 1,863,437.59 1,863,437.59 1.5
Additional Domestic Borrowing (BOZ) - 999,562.00 0.8
Borrowing from OAG - 349,797.30 0.3
Bridge Loans - 1,513,539.00 1.3
Carryover Funds - 328,273.78 0.3
Recalled funds - 894,072.62 0.7
Net External Financing 3,550,450.87 2,256,037.69 1.9
Programme 2,840,190.00 2,139,867.92 1.8
Project 1,237,112.43 865,978.70 0.7
Amortization (526,851.56) (749,808.93) -0.6
GDP 120,780,152.89
Source: Ministry of Finance
4.2.1 Expenses
Current expenditure releases amounted to K25.5 billion and were above the target by 15.2 percent of
which, 46.7 percent was for personal emoluments, 17.4 percent for Use of Goods and Services, and 21.5
percent for Grants and Other Payments. The balance of 14.4 percent was utilized on debt service, social
benefits, and other expenses.
4.2.2 Personal Emoluments
Releases toward Personal Emoluments
4
at K11.9 billion were above target by 8.0 percent and
represented 9.9 percent of GDP. The outturn was mainly attributed to the higher than projected wage
award for public service workers which were effected in September 2013.
4.2.3 Use of Goods and Services
Total releases towards Use of Goods and Services amounted to K4.4 billion and were below the target by
6.6 percent. This was attributed to the constraining of expenditure to accommodate expenses on fuel
subsidies prior to their removal. Releases of K158.9 million went towards paying bills arising from
4
Payment of salaries and other salary related emoluments for public service workers and constitutional posts
40
litigation cases against Government, K64.8 million towards by-elections, K39.7 million for the construction
of fuel depots and K28.0 million towards the constitutional making process.
Other expenditures included K354.5 million and K69.7 million for procurement of drugs and varied
medical equipment, respectively. Further, K171.2 million was released to facilitate the hosting of the
UNWTO General Assembly.
4.2.4 Interest on Domestic Debt
Releases towards interest payments on Government Securities at K1.5 billion was below the target by 6
percent. This was largely on account of lower than projected interest payments on Government securities.
4.2.4 External Debt Interest and Amortisation
Releases towards external debt interest payments amounted to K361.1 million and were below the target
by 27.7 percent due to lower than projected interest payments. Payments on amortisation amounted to
K749.8 million and were above the target by 42.3 percent.
4.2.5 Grants and Other Payments
Expenditure on Grants and Other Payments amounted to K5.4billion and were above the target by 68.9
percent. This was due to the huge expenditure of K1.6 billion on the fuel subsidy, higher resource
requirements of K1.1 billion towards the procurement of seed and fertilizer under the FISP
5
.Other
releases under this category included K486.7 million towards operations of the Zambia Revenue Authority
(ZRA), K28.8 million towards the Food Security Pack and foreign financed grants of K228.3 million.
4.2.6 Social Benefits
Releases towards social benefits amounted to K703.9 million and were below the target by 4.8 percent
largely on account of the non-capture of foreign financed social benefits. However, Government released
the total budget provision of K616.9 million towards the Public Service Pension Fund, K16.5 million for
Social Cash Transfer and K13.0 million for the Public Welfare Assistance Scheme.
5
This was mainly to cover carry over bills from the 2011/2012 farming season
2013 ANNUAL ECONOMIC REPORT
41
4.2.7 Other Expenses
A total of K1.1 billion was release to Food Reserve Agency (FRA) against the target of K300 million. This
was on account of bringing crop marketing transactions on-budget as an effort to enhance budget
transparency and credibility.
4.2.8 Assets
In the review period a total of K7.9 billion which was released towards assets was below target by 13.9
percent. Of the releases, a total of K7.6 billion was towards acquisition of Non-Financial Assets while
K0.27billion was released for financial assets.
Under non-financial assets, releases included K3.6 billion for accelerated implementation of the Link
Zambia 8,000 road project, K0.37 million and K0.62 million for power and railway line rehabilitation,
respectively. An additional K0.05 billion was released for the Rural Electrification Programme (REA) and
K0.08 billion for payments of construction works for the development of new districts and provincial
capitals.
Expenditure on financial Assets included, K0.12 billion to the Development Bank of Zambia for on-lending
to Small and Medium Enterprises (SMEs), K0.07 billion to various Government empowerment funds,
while K 0.02 billion went towards other Financial Assets. Further, K0.07 billion was released to facilitate
the operationalisation and commencement of disbursements under the Public Service Micro-Finance
Company.
4.2.9 Liabilities
Releases towards the dismantling of Government liabilities at K0.42 billion were above the target by 1.6
percent. Of the released amount, K0.13 billion went towards payment of suppliers of goods and services,
while K0.29 million was released towards payment of Other Government Liabilities in Ministries,
Provinces and Spending Agencies (MPSA’s).
42
Figure 8: Broad Expenditure Categories
Source: Ministry of Finance
4.3. BUDGET DEFICIT
The overall budget deficit in 2013 was K8.2 billion against the target of K5.4 billion. This represented 6.8
percent of GDP above the ceiling of 4.3 percent of GDP for the year. The deficit was financed through
domestic and external borrowing of K5.9 billion and K2.2 billion, respectively.
Personal
Emoluments
37%
Use of
Goods and
Services
14%
Interest Payments
6%
Grants and Other
Payments
16%
Social Benefits
2%
Other Expenses
3%
Non Financial
Assets
20%
Financial Assests
1%
Liabilities
1%
2013 ANNUAL ECONOMIC REPORT
43
5.0 DOMESTIC DEBT
The stock of domestic debt increased by 31.0 percent to K19, 744.6 million from K15, 072.8million in
2012 (see Table 41). This was mainly attributed to the increase in the stock of Government securities by
31.5 percent to K18,882.0 million from K14,357.7 million in 2012, to meet funding requirements for higher
than programmed domestic financing. There was also pressure to compensate for lower than
programmed foreign financing releases.
Table 41: Domestic Debt Position, 2011-2013, (ZMW’ Million)
Debt Category 2011 2012 2013 % Change 2013/2012
Treasury Bills
91 days 178.14 128.62 113.18 (12.01)
182 days 506.28 811.41 1,581.70 94.93
273 days 1,101.03 1,468.61 2,027.07 38.03
364 days 4,612.99 4,432.17 6,220.92 40.36
Sub Total 6,398.44 6,840.81 9,942.88 45.35
Bonds
2 Years 977.27 947.45 608.10 (37.60)
3 Years 1,280.85 1,481.99 1,969.52 32.90
5 Years 2,662.94 2,972.61 3,601.76 21.16
7 Years 272.88 433.56 671.09 54.79
10 Years 255.68 360.50 705.49 95.70
15 Years 153.38 172.81 262.21 51.73
Mega 10 Years 1,120.97 1,120.97 1,120.97 0.00
Sub Total 6,723.97 7,516.89 8,939.13 18.92
Total Government Securities 13,122.41 14,357.70 18,882.00 31.51
Domestic Arrears
Various Creditors 520.96 483.51 486.14 0.54
Sub Total 520.96 483.51 486.14 0.54
Pension Arrears
Public Service Pensions Fund 78.14 66.93 125.65
Sub Total 78.14 66.93 125.65 87.73
Awards and Compensation 453.51 164.71 250.78
Sub Total 453.51 164.71 250.78 52.26
Total Arrears 1,052.61 715.15 862.57 20.61
Grand Total 14,175.02 15,072.85 19,744.57 30.99
Source: Ministry of Finance
Total arrears comprising domestic and pension arrears, and awards and compensation increased by 20.6
percent to K862.6 million from K715.1 million in 2012. The increase was mainly due to the rise in the
stock of pension arrears at K125.7 million from K66.9 million in 2012. Domestic arrears marginally
44
increased by 0.5 percent to K486.1 million from K483.5 million in 2012.Similarly, the stock of awards and
compensation
6
increased by 52.3 percent to K862.6 million from K715.1 million in 2012.
6
Litigation cases against the Government
2013 ANNUAL ECONOMIC REPORT
45
6.0 MONETARY AND FINANCIAL SECTOR DEVELOPMENTS
The objectives of monetary and financial sector policies in 2013 continued to focus on price and financial
system stability. In this regard, the Bank of Zambia used the Policy Rate and market based instruments to
sustain single digit inflation. In addition, the financial sector remained sound and was rated satisfactory.
6.1. MONETARY DEVELOPMENTS
6.1.1. Broad Money
Broad money (M3)
7
, rose by 20.8 percent to K31,042.2 billion as at end-December 2013 from K25,699.0
billion at end-December 2012, above the end-year target by 17.4 percent. This outturn was mainly
explained by a 41.3 percent expansion in Net Domestic Assets (NDA), which contributed 22.2 percentage
points to M3 growth (see Figure 9). The increase in NDA was largely a result of higher credit to
Government. However, this was moderated by the decline in Net Foreign Assets (NFA) of 3.0 percent,
which contributed minus 1.4 percentage points to the M3 outturn.
Figure 9: Annual Broad Money Growth, January 2010-December 2013
Source: Bank of Zambia
7
Comprehensively defined to include foreign currency deposits
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Actual Projected
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6.1.2. Domestic Credit
Domestic credit rose by 43.9 percent to K28,404 billion in December 2013 from K19, 726.8 billion
recorded in December 2012. This was mainly explained by a rise in credit to Government of 218.8
percent. Lending to households and private enterprises rose by 19.4 percent and 9.1 percent,
respectively. Credit to public enterprises, however, fell by 66.0 percent.
With regard to commercial bank credit by sector, households (personal loans category) continued to
account for the largest share of outstanding credit at 34.5 percent compared with 32.4 percent in
December 2012. The Agricultural sector was second at 19.7 percent in 2013 down from 22.6 percent in
December 2012, followed by Manufacturing at 9.2 percent (11.3 percent), Wholesale and Retail Trade at
9.0 percent (6.7 percent), Mining and Quarrying at 6.4 percent (5.7 percent), and Transport, Storage and
Communications at 4.4 percent (3.9 percent) (see Table 42).
Table 42: Loans and Advances by Sector (%), December 2011-December 2013
Sectors 2011 2012 2013
K’bn share % change K’bn share % change K’bn Share % change
Agriculture 2,124.40 17.70 30.80 3,763.00 22.60 77.10 3,752.40 19.70 (0.30)
Mining & Quarrying 509.70 4.20 73.70 942.70 5.70 84.90 1,226.40 6.40 30.10
Manufacturing 1,461.60 12.20 24.70 1,881.00 11.30 28.70 1,758.60 9.20 (6.50)
Electricity, Gas, Water & Energy 196.80 1.60 30.00 338.90 2.00 72.20 311.90 1.60 (8.00)
Construction 504.00 4.20 (5.60) 620.60 3.70 23.10 654.70 3.40 5.50
Wholesale And Retail Trade 1,248.30 10.40 25.50 1,124.50 6.70 (9.90) 1,709.10 9.00 52.00
Restaurants & Hotels 253.50 2.10 45.20 339.40 2.00 33.90 321.70 1.70 (5.20)
Transport, Storage And Communications 650.60 5.40 50.00 772.20 4.60 18.70 838.30 4.40 8.60
Financial Services 603.50 5.00 147.70 309.30 1.90 (48.80) 381.00 2.00 23.20
Community, Social And Personal Services 257.90 2.10 (24.60) 347.60 2.10 35.80 378.30 2.00 8.80
Real Estate 297.80 2.50 (48.20) 400.90 2.40 34.60 406.60 2.10 1.40
Personal Loans 3,526.10 29.40 42.60 5,402.70 32.40 53.20 6,571.90 34.50 21.60
Others 375.10 3.10 77.50 424.30 2.50 13.10 726.60 3.80 14.20
Source: Bank of Zambia
6.2. INFLATION DEVELOPMENTS
The annual overall inflation rate was 7.1 percent at end December 2013, lower than the 7.3 percent at
end December 2012 on account of a decline in annual food inflation. However, the annual inflation rate
was above the end year target of 6.0 percent by 1.1 percentage points due to a rise in annual non-food
inflation (see Figure 10).
2013 ANNUAL ECONOMIC REPORT
47
6.2.1. Non Food Inflation
Annual non-food inflation was 8.2 percent at end December 2013, higher than the 6.1 percent in
December 2012. Non-food inflation remained moderate in the first quarter of 2013, but picked up in the
second quarter due to the 21 percent rise in pump prices of petroleum products following the removal of
fuel subsidies coupled with the pass-through effects of the exchange rate depreciation. This translated
into higher production and transportation costs.
6.2.2. Food Inflation
Annual food inflation eased, closing the year at 6.2 percent from 8.4 percent at the close of 2012. This
was due to the improved supply of food items despite the inflationary pressure emanating from increased
seasonal demand for maize and maize products towards the end of the year.
Figure 10: Annual Inflation, January 2012-December 2013
Source: Central Statistical Office
6.3. INTEREST RATES DEVELOPMENTS
6.3.1. Yield Rates on Government Securities
Yield rates on all Government securities trended upwards due to low demand for Government paper and
an upward adjustment in the tender size during the third quarter of the year. The weighted average yield
rate for Treasury bills was 12.8 percent in 2013, up from the average of 10.8 percent in 2012. Similarly,
the composite average yield rate on Government Bonds rose to an average of 15.4 percent from an
average of 12.9 percent in 2012.
3.5
4.5
5.5
6.5
7.5
8.5
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Overall Food Non-Food
48
6.3.2. Yield Rates on Treasury Bills
The yield rates on the 91- and 182-day securities rose to averages of 7.9 percent and 14.8 percent at
close of December 2013 from 7.5 percent and 10.5 percent in 2012. The yield rate for the 273-day and
364-day papers also increased to averages of 15.3 percent and 15.8 percent from averages of 10.8
percent and 11.4 percent in 2012, respectively (see Figure 11).
Figure 11: Treasury Bills Yield Rates (percent per annum), 2011-2013
Source: Bank of Zambia
6.3.3. Yield Rates on Government Bonds
The average 2-, 3- and 5- year bond yield rates increased to averages of 13.0 percent, 14.7 percent and
15.8 percent in 2013 from 10.7 percent, 12.3 percent and 12.9 percent in 2012, respectively. Similarly,
the yield rates on the 7-, 10- and 15 year bonds edged upwards to 15.5 percent, 17.3 percent and 17.2
percent from 14.5 percent, 16.0 percent and 16.7 percent in 2012, respectively (see Figure12).
0.00
2.00
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2013 ANNUAL ECONOMIC REPORT
49
Figure 12: Government Bond Yield Rates (percent per annum), 2011-2013
Source: Bank of Zambia
6.3.4. Nominal Interest Rates
Commercial banks’ nominal interest rates registered a mixed performance in 2013. The Average Lending
Rate (ALR) increased to 16.4 percent as at end-December 2013 from 16.1 percent as at end-December
2012. However, the Average Savings Rate (ASR) for amounts above K100 declined to 3.6 percent from
4.3 percent, while the 30-day deposit rate for amounts exceeding K20,000 remained unchanged at 5.3
percent (see Figure 13).
Figure 13: Lending and Saving, January 2010-December 2013
Source: Bank of Zambia
0.00
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6.3.5. Real Interest Rates
The real ALR rose to 9.3 percent from 8.8 percent in December 2012 on account of the fall in annual
inflation to 7.1 percent from 7.3 percent in December 2012. Similarly, the real 30-day deposit rate for
amounts above K20,000 rose to negative 1.8 percent from negative 2.0 percent, while the real ASR for
amounts above K100 decreased to negative 3.5 percent compared to negative 3.0 percent in 2012 (see
Figure 14).
Figure 14: Real Interest Rates, January 2010-December 2013
Source: Bank of Zambia
6.4. FOREIGN EXCHANGE MARKET DEVELOPMENTS
6.4.1. Exchange Rate
During the review period, the Kwacha exhibited mixed performance against the major currencies. The
local unit depreciated against the US dollar, Pound Sterling and Euro, while posting an appreciation
against the South African Rand.
The Kwacha depreciated by 4.9 percent against the US dollar to an annual average of K5.3914/US$ from
K5.1415/US$ in 2012. The Kwacha closed the year at K5.5126/US$ compared to K5.1466/US$ at the
end of 2012. The Kwacha also depreciated against the Pound Sterling and Euro by 3.6 percent and 8.3
percent to annual averages of K8.4408/£ and K7.1624/€ from K8.1496/£ and K6.6119/€, respectively.
Firm domestic demand due to high Kwacha liquidity, market participants’ position-taking ahead of
Statutory Instrument No. 55 implementation and developments in the Euro Area, China and USA
contributed to the observed weakness in the Kwacha.
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
Average Lending Rate 30-Day Deposit Rate
Average Savings Rate WALBR
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2013 ANNUAL ECONOMIC REPORT
51
The Kwacha, however, appreciated against Rand by 10.7 percent to an average K0.5596/ZAR. This was
due to exposure of the South African economy to the fragility in the Euro Area (see Figure 15).
Figure 15: Kwacha Exchange Rate Levels against Major Foreign Currencies, 2012-2013
Source: Bank of Zambia
6.4.2. Supply and Demand of Foreign Exchange
In 2013, the supply of foreign exchange to the market, reflected by commercial banks’ purchases of
foreign exchange from various sectors increased to US$10,693.6 million from US$9,662.8 million in 2012.
Similarly, demand for foreign exchange as reflected by commercial banks’ sales to various sectors rose to
US$9,419.6 million compared with US$8,651.9 million in 2012. As a result, commercial banks recorded
net purchases of US$1,274.0 million in 2013 relative to net purchases of US$1,010.8 million in 2012.
Mining companies remained the main suppliers of the foreign exchange selling US$4,339.4 million,
representing 40.6 percent of the total supply. This was followed by foreign financial institutions, which
supplied US$1,355.3 million, accounting for 12.7 percent. Foreign financial institutions led the demand for
foreign exchange with purchases of US$1,157.1 million from US$1,099.8 million in 2012. On a net basis,
supply of foreign exchange by foreign financial institutions declined to US$198.2 million compared with
US$613.5 million in 2012.
0.2000
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Interbank Exchange Rates
USD Pound Euro SA Rand
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52
6.5. FINANCIAL SECTOR DEVELOPMENTS
6.5.1. Banking Sector
The overall financial performance and condition of the banking sector for the year ended 31
st
December
2013 was rated satisfactory. The sector recorded improvements in capital adequacy, asset quality and
liquidity position, while the earnings performance remained satisfactory.
The total regulatory capital of banks rose by 50.5 percent to K6,201 million from K4,120 million in
December 2012. The increase in regulatory capital was largely driven by the increment in minimum
primary capital requirement which rose from K12 million to K104 million for locally owned banks, and
K520 million for foreign owned banks. Consequently, the capital adequacy ratios went up by 24.4 percent
for the primary regulatory capital
8
and 26.8 percent for the total regulatory capital
9
compared with 19.4
percent and 21.3 percent as at end-December 2012, respectively.
The banking sector’s total assets increased by 22.4 percent to K41,953 million as at end-December 2013
compared to K34,276 million in 2012. Loans and Advances to customers, which accounted for the largest
share of total assets at 42.6 percent grew by 14.5 percent to K17,884 million, largely funded by deposits
from customers, that increased by 22.8 percent to K30,907 million. The asset quality improved as
reflected by an improvement in the gross Non-Performing Loans (NPL) ratio to 7.0 percent as at end-
December 2013 from 8.1 percent as at end-December 2012 on account of improved risk management by
banks.
Earnings performance for the banking sector measured by net operating income increased by 15.2
percent to K4,403 million compared to K3,822 million in 2012. This was largely attributed to a
proportionately higher increase in net operating income
10
at K581 million compared to operating
expenses
11
of K475 million.
6.5.2. Regulatory Developments
New Capital Adequacy
In the year under review, compliance with the new minimum capital requirements was extended to 31
December 2013. This was done in order to allow banks to have sufficient time to mobilize capital
8
The minimum requirement is 5.0 percent
9
The minimum requirement is 10.0 percent
10
Net interest income plus non-interest income
11
Non-interest expenses plus provision for loan losses
2013 ANNUAL ECONOMIC REPORT
53
resources. Of the 19 banks, 14 met the minimum primary capital requirements, 1 bank agreed to convert
to a non-bank financial institution, while 4 were granted special approval for recapitalisation plans that
extend beyond the 31
st
December 2013 deadline.
Capping of Interest Rates
In 2013, the Bank of Zambia introduced a cap on margins that commercial banks can add on the Policy
Rate in order to determine the effective lending interest rate. This was applied to all new loans written on
or after the effective date of 2
nd
January 2013.
6.5 NON-BANK FINANCIAL INSTITUTIONS
The overall financial condition and performance of the Non-Bank Financial Institutions (NBFIs) was
satisfactory. The aggregate regulatory capital increased by 6.5 percent to K1,043.5 million as at end-
December 2013 from K973.3 million as at 31 December 2012. The increase in regulatory capital was
largely due to an after tax profit of K35.4 million coupled with a combined capital injection of K72.3 million
in the building society, microfinance, leasing and bureaux de change sub-sectors. The total number of
NBFIs licensed by the Bank of Zambia increased to 114 from 106 in 2012 (see Table 43).
Table 43: Non-Bank Financial Institutions Licensed by the Bank of Zambia as at 31 December 2013
Type of Institution
Number of Institutions as at
31 December 2012 31 December 2013
Leasing Finance Companies 8 7
Building Societies 3 4
Bureaux de change 57 64
Savings and credit institutions 1 1
Microfinance institutions 35 35
Development finance institution 1 1
Financial Businesses 0 1
Credit reference bureaux 1 1
Total 106 114
Source: Bank of Zambia
6.6 CAPITAL MARKETS DEVELOPMENTS
6.6.1Stock Market
In 2013, trading activity at the Lusaka Stock Exchange (LuSE) increased with market capitalisation rising
by 17.3 percent to K58,188.0 million from K49,624.7 million at the end-2012.The LuSE All Share index
also grew by 42.7 percent to 5,300.0 by end-December 2013 compared to 3,714.6 at close of 2012 (see
Figure 16).This was on account of capital gains by most companies.
54
In terms of participation, foreign investors increased their participation in the local bourse, evidenced by
net capital inflows of US$5.2 million compared to net outflows of US$7.4 million in 2012.
Figure 16: Indicators of LuSE Activity, 2013
Source: Lusaka Stock Exchange and Bank of Zambia
6.6.2Bond Market
Trading on the secondary market rose to K344.5 million from K221.5 million in 2012 with Government
securities traded increasing by 31.6 percent to K2.18 billion from K1.66 billion in 2012. This was largely
reflective of the increased risk appetite by foreign investors into emerging and developing economies.
-
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3,000.00
4,000.00
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6,000.00
-
10,000.00
20,000.00
30,000.00
40,000.00
50,000.00
60,000.00
70,000.00
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Market Capitalisation LuSE All Share Index
55
7.0 EXTERNAL SECTOR DEVELOPMENTS
0.1. BALANCE OF PAYMENTS
Preliminary data indicates an overall Balance of Payments (BoP) deficit of US$344.9 million in 2013
compared to a surplus of US$726.7 million in 2012 (see Table 44). The deterioration in the BoP position
was largely driven by the narrowing of the current account surplus coupled with the widening of the
capital and financial account deficit. In line with this development, reserves accumulation reduced to
US$360.2 million in 2013 from US$721.9 million in 2012.
Table 44: Balance of Payments 2011-2013, (in US $ Million)
2011 2012 2013*
Current Account 704.70 802.60 216.50
Balance on goods 2,205.60 1,450.50 1,402.30
Exports , f.o.b 8,512.30 9,204.60 10,398.50
Metal sector 6,915.70 6,511.00 7,086.60
Copper 6,659.70 6,294.50 6,941.30
Cobalt 256.00 216.50 145.30
Non-traditional 1,596.60 2,693.50 3,312.00
Imports, f.o.b (6,454.20) (7,925.50) (9,234.80)
Metal sector (1,567.30) (2,083.70) (2,560.10)
Non-metal sector (4,887.00) (5,841.90) (6,674.70)
Fertilizer (330.00) (304.30) (391.70)
Petroleum (530.50) (930.60) (1,200.50)
Others (4,026.50) (4,606.90) (5,082.50)
Goods Procured in ports by carriers( Bunker Oil) 44.50 47.20 50.00
Nonmonetary Gold 103.00 124.30 188.60
Services (net) (723.60) (768.30) (821.40)
Services Receipts 374.50 466.30 583.00
Services Payments (1,098.10) (1,234.60) (1,404.40)
Income Net (1,155.30) (333.50) (753.30)
Income Receipts 11.10 10.10 4.90
Income Payments (1,166.40) (343.60) (758.20)
Of which: Income on Equity Payments (1,092.50) (239.20) (652.80)
Interest payments (44.80) (74.10) (76.60)
Current Transfers(net) 378.00 453.90 388.90
Private 231.80 265.00 279.00
Official 146.20 188.90 109.90
Capital and Financial Account (368.50) (7.10) (512.30)
Capital Account 151.00 223.00 101.00
Capital Transfers 151.00 223.00 101.00
General Government 151.00 223.00 101.00
Project Assistance grants 151.00 223.00 101.00
Financial Account (519.50) (230.10) (613.30)
Direct Investment 1,109.90 2,433.40 1,630.40
Abroad 1.40 701.90 (180.50)
2013 ANNUAL ECONOMIC REPORT
56
2011 2012 2013*
In reporting economy 1,108.50 1,731.50 1,810.90
Portfolio Investment 70.70 917.70 112.10
Assets - 104.70 -
Liabilities 70.70 813.00 112.10
Financial Derivatives (154.30) (10.80) 11.90
Other Investment (1,545.80) (3,570.40) (2,367.60)
Assets (2,183.90) (3,922.30) (2,560.00)
Increase in NFA - banks(-) - 490.40 (42.00)
Other Assets (2,183.90) (4,412.70) (2,518.00)
Liabilities 638.10 351.90 192.40
Government 371.10 171.90 110.20
Disbursement of Loans 397.30 407.40 223.50
Project 367.30 355.00 223.50
Budget 30.00 52.40 -
Amortization of loans(-) (26.20) (235.50) (113.30)
Private Foreign Borrowing(net) 267.00 180.00 82.20
Errors and Omissions (92.40) (68.70) (49.10)
Overall balance 243.80 726.70 (344.90)
Financing of Overall balance (243.80) (726.70) 344.90
Change: NIR of Bank of Zambia (243.80) (726.70) 344.90
Reserve Assets (270.40) (721.90) 360.20
Of which: Gross Official Reserves (270.40) (289.80) 61.10
Encumbered Reserves (432.20) 299.10
Use of Fund Credit and Loans(net) 26.60 (4.80) (15.30)
Financing gap - - -
Source: Bank of Zambia
*Preliminary
7.1.1Current Account
The current account recorded a surplus but narrowed to US$216.5 million from US$802.6 million in 2012.
This was mainly on account of a decline in the merchandise trade surplus, the widening of the services
and income account deficits, and a decline in current transfers.
The merchandise trade surplus at US$1,402.3 million was 3.3 percent lower than US$1,450.5 million in
2012. This was driven by a higher increase in merchandise imports relative to the rise in exports. The
merchandise import bill at US$9,234.8 million in 2013 was 16.5 percent higher than US$7,925.5 million in
2012 on account of an increase in import bills especially for iron and steel, fertilizer, petroleum products,
machinery and equipment.
Merchandise export earnings, grew by 13.0 percent to US$10,398.5 million from US$9,204.6 million in
2012 on account of growth in both Traditional and Non-Traditional Export (NTE) earnings. NTEs, at
US$3,321.0 million, were 23.0 percent higher than US$2,693.5 million in 2012. The rise in NTEs was
mainly on account of increased earnings from the export of burley tobacco, cane sugar, fresh flowers,
fresh fruits and vegetables, electricity and petroleum products (see Table 45).
2013 ANNUAL ECONOMIC REPORT
57
Table 45: Major Non-Traditional Exports (C.I.F.), 2011-2013 (US$’ Millions)
2011 2012 2013* % Change 2013/2012
Copper Wire 169.7 151.4 123.3 (18.6)
Cane Sugar 165.0 141.9 189.0 33.2
Burley Tobacco 100.6 156.6 213.3 36.2
Cotton Lint 118.2 129.1 91.7 (29.0)
Electrical Cables 41.7 50.9 53.2 4.4
Fresh Flowers 20.8 23.7 32.6 37.4
Fresh Fruits & Vegetables 9.2 15.7 31.5 100.6
Gemstones 35.8 232.3 215.8 (7.1)
Gasoil/Petroleum Oils 36.8 97.1 105.9 9.0
Electricity 16.9 42.7 78.0 82.6
Source: Bank of Zambia
*Preliminary
Metal export earnings increased by 8.8 percent to US$7,086.6 million from US$6,511.0 million in 2012,
following a rise in copper export earnings. Copper export earnings, at US$6,941.3 million were 10.3
percent higher than US$6,294.5 million realised in 2012, driven by higher export volumes (see Figure 17).
Copper export volumes at 981,340.59 Mt were 11.3 percent higher than 882,095.09 Mt in 2012. The
realised average copper price, however, marginally declined to US$7,073.82 per tonne from US$7,135.84
per tonne in 2012.
Cobalt export earnings declined by 32.9 percent to US $145.3 million from US$216.5 million in 2012, due
to both lower export volumes and realised prices. Cobalt export volumes, at 6,146.29 Mt, were 26.4
percent lower than 8,350.4 Mt in 2012. Similarly, the realised average price of cobalt, at US$23,635.55
per tonne, was 2.8 percent lower than US$24,325.85 per tonne in 2012.
The services account deficit widened by 6.9 percent to US$821.4 million from US$768.3 million, due to
higher import related service payments. Similarly, the income account deficit widened to US$753.3 million
from US$333.5 million in 2012 as a result of higher equity payments. Current transfer inflows declined
due to lower budget support grants.
58
Figure 17: Export Earnings, 2011-2013 in US $Million
Source: Bank of Zambia
7.1.2Capital and Financial Account
The capital and financial account deficit widened to US$512.3 million from US$7.1 million in 2012. This
was largely attributed to a reduction in foreign direct investment to US$1, 630.4 million from US$2,433.4
million in 2012 as well as a decline in portfolio investments by 87.8 percent to US$112.1 million from
US$917.7 million in 2012.
0.2. EXTERNAL DEBT POSITION
Preliminary data indicates that Government external debt stock as at end December 2013 increased by
10.5 percent to US$3,512.9 million from US$3,179.8 million as at end December 2012. The increase was
mainly attributed to a rise in supplier’s credit by 59.9 percent, most of which were net disbursements from
Exim Bank China. Multilateral debt also increased by 5.0 percent to US$1452.7 million from US$1382.8
million (see Table 46).
Table 46: External Debt Stock in US Million, 2011-2013
Creditor 2011 2012 2013 % Change 2013/2012
Multilateral 1280.70 1382.80 1452.73 5.06
ADB/ADF 215.20 247.00 282.39 14.33
World Bank (IDA) 484.40 564.10 609.51 8.05
IMF 416.50 405.60 387.86 (4.37)
Others 164.60 166.10 172.97 4.14
Bilateral 250.70 239.00 183.75 (23.12)
Paris Club 180.00 169.80 122.08 (28.10)
Non-Paris Club 70.70 69.20 61.67 (10.88)
Suppliers Credit 448.70 565.80 904.96 59.94
6,659.7
6,294.5
6,941.3
256.0 216.5
145.3
1,596.6
2,693.5
3,312.0
0.0
1,000.0
2,000.0
3,000.0
4,000.0
5,000.0
6,000.0
7,000.0
8,000.0
2011 2012 2013
U
S

$

m
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n
Copper Cobalt NTEs
2013 ANNUAL ECONOMIC REPORT
59
Creditor 2011 2012 2013 % Change 2013/2012
Commercial Debt 0.00 992.20 971.49 (2.09)
DBSA 0.00 242.20 221.49 (8.55)
Euro Bond 0.00 750.00 750.00 -
Total Govt. External Debt 1980.10 3179.80 3512.93 10.48
Government External Debt Stock as % of GDP 10.3 15.4 15.0
Source: Ministry of Finance
7.2.1External Debt Service
Government external debt service declined by 45.8 percent to US$160.8 million in 2013 from US$296.6
million in 2012 on account of a reduction in both principal and interest payments (see Table 47). Principal
payments declined by 57.3 percent to US$97.7 million from US$228.9 million in 2012 while interest
payments declined by 6.8 percent. The lower debt service payments in 2013 was mainly on account of
the one-off repayment of US$145 million loan borrowed for the accelerated urban road project made in
2012
Table 47: Public External Debt Service, 2011-2013
Category 2011 2012 2013 % Change 2013/2012
Principal 13.7 228.9 97.7 (57.32)
Interest 20.5 67.7 63.1 (6.79)
Total 34.1 296.6 160.8 (45.79)
External Debt Service as % of Domestic Revenue 3.5 6.9 3.6
Source: Ministry of Finance
7.2.2Loans contracted in 2013
In 2013, Government contracted 13loans amounting to US$1,248.93 million on both concessional and
non-concessional terms. The loans were mainly utilised on infrastructure projects in the energy, road,
health, education, agriculture, water and sanitation sectors (see Table 48).
Table 48: Loans Contracted by Government in 2013
Name of the Loan Lending Institution Amount (US$’Million)
Construction of the Mansa – Luwingu (M3)Road (175 km) and 30km of township roads in Mansa China Development Bank 175.92
Upgrading of the Mbala – Nakonde (D1)Road(171.9KM) Exim Bank of China 196.00
Agricultural Prod. Prog. For SAP International Development Association (IDA) 49.89
Buyer Credit Agreement (Rehabilitation of Urban Roads) EXIM China 295.80
Livestock Infrastructure Support Project African Development Bank 18.21
Lusiwasi/Lunzua Hydropower Stations EXIM China 183.23
Water Resources Development Project International Development Association (IDA) 50.94
Lusaka Transmission and Rehabilitation Project International Development Association (IDA) 107.89
Modernization of the University Teaching Hospital Saudi Fund for Development 20.00
Construction of Three Technical Colleges OFID Fund 10.00
Procurement of Fertilizer Saudi Fund for Development 20.00
Rehabilitation & expansion of Mulonga Water and Sewerage services European Investment Bank 103.12
Strategic Programme of Climate Resilience in Kafue Sub-Basin African Development Bank (AFDB) 17.50
Total 1,248.50
Source: Ministry of Finance
61
8.0 PROSPECTS FOR 2014
Global growth in 2014 is projected at 3.7 percent. This is expected to be driven by a projected resurgence
in the advanced economies to 2.2 percent in 2014from 1.3 percent in 2013. This will in part be supported
by the reduction in the United States of America fiscal drag and the recovery in the Euro Area which is
expected to post positive growth of 1.0 percent from negative 0.4 percent in 2013.
Emerging and developing economies are expected to grow at 5.1 percent from 4.7 percent in 2013 with
Sub-Saharan Africa expected to reach 6.1 percent from 5.1 percent in 2013. This will be on account of
stronger external demand from advanced economies, although domestic weaknesses may remain a
concern.
In the commodity market, the price of oil is expected to be on a downward trend. The projected high
production by both OPEC and non-OPEC producers will sustain the downward pressure. Similarly, Non-
fuel commodity prices, such as copper are expected to ease on account of expected boost in the supply
of the commodity.
Global developments will have a positive impact on the domestic economy with real GDP projected at 7.0
percent. This will be driven by strong performance in the mining, transport and communication, and the
construction sectors. The agriculture sector is also expected to recover on account of expected
favourable weather conditions.
Monetary policy will continue to focus on price and financial system stability. In this regard, inflation is
expected to remain in single digit levels on account of the anticipated improvement in food supply
complimented by expected stability in fuel prices. Nonetheless, risk of exchange rate volatility may exert
inflationary pressure. End year inflation has been projected at 6.5 percent in 2014.
Fiscal policy will focus on strengthening domestic resource mobilization to support public infrastructure
and human capital development. To this end, efforts will be directed towards increasing domestic revenue
collections from 19.3 percent of GDP in 2013 to at least 20.0 percent in 2014.
Notwithstanding the positive prospects, downside risks are associated with global events. The global
tapering programmes are likely to exert liquidity pressure on emerging and developing economies
including Zambia which may affect the performance of the external sector.
2013 ANNUAL ECONOMIC REPORT
63
Part III
ANNEXES
2013 ANNUAL ECONOMIC REPORT
65
ANNEX I
Table 49: Selected Macroeconomic Indicators, 2011-2013
2011 2012 2013 Target 2013* Outturn
Real GDP 6.8 7.2 7.0 6.4
Inflation (end year) 7.2 7.3 6.0 7.1
Domestic Revenue(% of GDP) 20.9 21.1 20.0 19.2
Overall fiscal deficit ,including grants(% of GDP) 3.6 4.8 4.3 6.8
Gross International Reserves (months of imports) 2.8 2.8 4.0 2.4
Source: Ministry of Finance
* Preliminary
66
ANNEX II
Table 50: Percentage Changes in G.D.P by kind of Economic Activity (Constant 1994 prices), 2011-2013
KIND OF ECONOMIC ACTIVITY 2011 2012 2013*
Agriculture, Forestry and Fishing 8.0 6.8 -7.4
Agriculture 14.0 11.1 -15.4
Forestry 3.7 3.7 3.7
Fishing -2.0 -2.0 -2.0
Mining and Quarrying -5.2 -2.7 5.9
Metal Mining -5.3 -2.7 5.9
Other mining and quarrying 8.1 4.4 3.5
PRIMARY SECTOR 2.2 2.9 -2.3
Manufacturing 8.0 7.2 4.5
Food, Beverages and Tobacco 9.3 7.1 4.5
Textile, and leather industries -54.7 3.5 18.4
Wood and wood products 6.1 4.3 -1.9
Paper and Paper products 18.5 14.1 7.7
Chemicals, rubber and plastic products 7.2 10.1 11.3
Non-metallic mineral products 25.0 8.1 3.3
Basic metal products -0.9 13.9 5.6
Fabricated metal products 16.6 -3.7 -8.5
Electricity, Gas and Water 8.2 4.1 5.9
Construction 8.9 13.6 11.4
SECONDARY SECTOR 8.5 10.1 8.3
Wholesale and Retail Trade 7.5 4.0 5.2
Restaurants, Bars and Hotels 7.9 -2.6 2.2
Transport, Storage and Communications 13.7 12.8 12.4
Rail Transport 4.4 -33.4 24.2
Road Transport 10.8 7.1 7.1
Air Transport 13.1 10.8 13.3
Communications 16.0 18.0 14.9
Financial Institutions and Insurance 4.9 12.0 12.2
Real Estate and Business services 2.9 3.7 3.1
Community, Social and Personal Services 8.4 9.4 12.8
Public Administration & Defence /Public sanitary services 10.6 11.2 21.9
Education 7.5 7.9 7.9
Health 13.3 20.0 5.6
Recreation, Religious, Culture 2.8 6.2 15.6
Personal Services 3.5 3.5 3.5
TERTIARY SECTOR 7.8 7.4 8.6
Less: FISIM 2.3 2.3 2.3
TOTAL GROSS VALUE ADDED 6.8 7.3 6.4
Taxes less subsidies on Products 6.8 7.3 6.4
TOTAL G.D.P. AT MARKET PRICES 6.8 7.3 6.4
Source: Central Statistical Office
*Preliminary
2013 ANNUAL ECONOMIC REPORT
67
ANNEX III
Table 51: GDP by Kind of Economic Activity (Constant 1994 Prices in K'Billion), 2011-2013
KIND OF ECONOMIC ACTIVITY 2011 2012 2013*
Agriculture, Forestry and Fishing 582.8 622.6 576.4
Agriculture 306.5 340.5 288.0
Forestry 200.8 208.2 215.9
Fishing 75.5 74.0 72.5
Mining and Quarrying 405.6 394.6 417.7
Metal Mining 403.0 391.9 414.9
Other mining and quarrying 2.6 2.7 2.8
PRIMARY SECTOR 988.4 1,017.3 994.2
Manufacturing 427.7 458.4 479.2
Food, Beverages and Tobacco 305.9 327.6 342.2
Textile, and leather industries 4.6 4.8 5.7
Wood and wood products 38.0 39.6 38.9
Paper and Paper products 19.7 22.5 24.3
Chemicals, Rubber and Plastic products 37.2 40.9 45.5
Non-metallic mineral products 11.0 11.9 12.3
Basic metal products 1.5 1.8 1.9
Fabricated metal products 9.6 9.2 8.5
Electricity, Gas and Water 110.8 115.4 122.2
Construction 552.8 627.9 699.5
SECONDARY SECTOR 1,091.2 1,201.7 1,300.9
Wholesale and Retail trade 708.9 737.1 775.5
Restaurants, Bars and Hotels 110.0 107.2 109.5
Transport, Storage and Communications 483.8 545.8 613.3
Rail Transport 5.4 3.6 4.4
Road Transport 155.2 166.2 178.0
Air Transport 74.4 82.5 93.4
Communications 248.9 293.6 337.4
Financial Intermediaries and Insurance 323.3 362.1 406.4
Real Estate and Business services 342.8 355.3 366.3
Community, Social and Personal Services 400.3 437.9 494.1
Public Admin. & Defence; Public & Sanitary services 134.7 149.7 182.5
Education 195.9 211.3 227.9
Health 24.2 29.1 30.7
Recreation, Religious, Culture 27.1 28.8 33.3
Personal Services 18.3 19.0 19.7
TERTIARY SECTOR 2,369.1 2,545.4 2,765.1
Less: FISIM (160.8) (164.4) (168.1)
TOTAL GROSS VALUE ADDED 4,287.9 4,599.9 4,892.0
Taxes less subsidies on Products 319.7 343.0 364.8
TOTAL G.D.P. AT MARKET PRICES 4,607.6 4,942.9 5,256.8
Real growth rates 6.8 7.3 6.4
Source: Central Statistical Office
*Preliminary
68
ANNEX IV
Table 52: GDP by Kind Of Economic Activity At Current Prices (K’Billion), 2011-2013
KIND OF ECONOMIC ACTIVITY 2,011.0 2,012.0 2,013.0
Agriculture, Forestry and Fishing 18,094.8 20,348.5 21,441.4
Agriculture 3,351.7 3,983.8 3,595.0
Forestry 14,151.6 15,744.4 17,198.0
Fishing 591.5 620.3 648.4
Mining and Quarrying 3,144.1 2,757.5 2,716.5
Metal Mining 3,131.9 2,746.1 2,705.5
Other Mining and Quarrying 12.2 11.4 11.0
PRIMARY SECTOR 21,238.9 23,106.0 24,157.9
Manufacturing 7,790.4 8,866.6 9,843.7
Food, Beverages and Tobacco 4,996.3 5,646.5 6,259.2
Textile, and Leather Industries 106.7 117.5 149.9
Wood and Wood Products 934.7 1,045.4 1,080.0
Paper and Paper products 774.6 948.4 1,076.0
Chemicals, rubber and plastic products 703.2 822.2 983.9
Non-metallic mineral products 165.3 189.8 210.8
Basic metal products 10.4 10.6 10.5
Fabricated metal products 99.2 86.2 73.3
Electricity, Gas and Water 2,910.4 3,187.2 3,655.2
Construction 20,815.0 24,714.5 29,693.8
SECONDARY SECTOR 31,515.8 36,768.3 43,192.8
Wholesale and Retail trade 13,085.3 14,499.8 16,320.3
Restaurants, Bars and Hotels 2,143.8 2,176.6 2,359.7
Transport, Storage and Communications 3,578.4 4,052.1 4,728.5
Rail Transport 122.6 87.0 115.6
Road Transport 1,467.9 1,734.5 2,050.2
Air Transport 737.2 884.9 1,109.2
Communications 1,250.6 1,345.6 1,453.5
Financial Intermediaries and Insurance 7,568.8 8,998.7 10,864.0
Real Estate and Business services 5,327.7 5,820.8 6,502.3
Community, Social and Personal Services 9,696.1 11,738.7 14,159.6
Public Administration and Defence 2,082.4 2,663.0 3,472.0
Education 5,542.0 6,516.3 7,661.9
Health 1,522.9 1,947.5 2,321.3
Recreation, Religious, Culture 188.6 212.9 255.3
Personal services 360.1 399.0 449.1
TERTIARY SECTOR 41,400.0 47,286.7 54,934.3
Less: FISIM (4,349.6) (5,171.4) (6,243.3)
TOTAL GROSS VALUE ADDED 89,805.1 101,989.7 116,041.7
Taxes less subsidies on Products 3,527.5 4,025.5 4,738.5
TOTAL G.D.P. AT MARKET PRICES 93,332.5 106,015.2 120,780.2
Source: Central Statistical Office