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Zambia headed for emerging market status, observes IMF

Zambia headed for emerging market status, observes IMF
By Joan Chirwa
Saturday August 23, 2008 [04:00]

ZAMBIA is among seven other countries in sub-Saharan Africa that are headed towards emerging market status, the International Monetary Fund (IMF) has established.

David Nellor of the IMF's African department stated that eight sub-Saharan countries that met the criteria for an emerging market status were benchmarked against the founding members of the Association of Southeast Asian Nations (ASEAN), which were among the early emerging markets identified by the International Finance Corporation (IFC) - a financing arm of the World Bank.

Nellor stated that the criteria for an emerging market, which include private sector led growth and investible markets, were identified in the eight sub-Saharan African countries, Zambia inclusive.

"Botswana, Ghana, Kenya, Mozambique, Nigeria, Tanzania, Uganda, and Zambia have been earmarked for emerging market status. Together, these countries account for about 40 per cent of the region's population outside South Africa and almost one-half of its GDP," stated Nellor in the September issue of IMF's Finance and Development magazine. "This group of African countries compares favourably with the ASEAN countries of 1980.

ASEAN was already experiencing strong economic growth in 1980 but, in many other areas, the ASEAN countries looked quite different than they do today - and the African candidates perhaps have lower vulnerability and greater economic stability than the ASEAN countries had in 1980."

The IMF notes that successful emerging market countries feature the private sector as the engine of growth, irrespective of their form of economic organisation.

"Institutional investors want to have confidence that policy will continue to support private sector development and that private property rights will be protected; here they share the interests of foreign direct investors," stated Nellor.

"Africa generally fares poorly in measures of the attractiveness of the business environment, and this makes the continent a less attractive destination for investors. Stronger performance in this area is likely to be well rewarded with additional investment."

Labels: IMF

posted by MrK @ 4:32 AM