Maravi

Polls will boost economy, says Fundanga

Polls will boost economy, says Fundanga
By Chiwoyu Sinyangwe
Wed 01 June 2011, 08:00 CAT

THIS year’s presidential and general elections are expected to stimulate the local economy than hurting it, says Dr Caleb Fundanga.

Key political analysts fear that the run-up to elections might lead to intermittent disturbances in both key economic fundamentals and general state of the economy as some risk-averse international investors hold back their commitment to the local economy.

But Dr Fundanga said the performance of the economy which has seen government raise growth projections for this year to above seven per cent from budgeted 6.8 per cent was expected to continue for the second half of the year despite the forthcoming polls.

The Bank of Zambia governor said the country had a good record of peaceful elections since independence – enough strength to help retain investors’ confidence.

“Ordinarily, people will be campaigning and so forth but there is no reason why the elections should derail current strong economic growth,” Dr Fundanga said in an interview.

“The farmers are out there working in the field, the miners are out there…Whether there are elections or not, I expect the miners to be working. I don’t expect any disruptions. So, even in an election year, we don’t expect to have problems. Those who are producing should continue producing, and on the voting day, they will go and vote.”

He said elections tend to stimulate the economy as political parties tend to augment their expenditure on election-related activities.

“Sometimes, elections even stimulate the economy because there is a higher demand for chitenge material, T-shirts and all sorts of things,” Dr Fundanga said.

“You may find that an election even stimulate the economy. I am sure our friends who are working in the print industry would do a lot more business than in a normal year.People will travel more.”

Dr Fundanga said with the expected surge in copper and maize production, the economic performance was expected to remain robust in the second half of the year, with grain output expected to stem inflation which continued to be fueled by the recent rise in food prices.

The country’s inflation was likely to slow to seven per cent by the end due to a bumper maize harvest causing softer food prices despite its current high levels of 8.9 for this month, according to Dr Fundanga.

“The projections are looking upwards, we expect a higher rate of growth and more jobs being created and that is positive for the country,” he said. “Even you people in the media are going to do more business this year.”

Dr Fundanga, however, feared that higher crude oil prices, partly blamed on unrest in key oil producing regions, would cause some inflationary pressures but was confident that other more positive influences would help to lower inflation.

“Obviously, there will be on the other side other pressures like oil, we don’t know what direction oil prices are going to take,” said Dr Fundanga. “But we are going to have more positive influences more dominant which means we can expect lower levels of inflation.”

Labels: 2011 ELECTIONS, CALEB FUNDANGA, ECONOMY

posted by MrK @ 10:08 PM