REDUCTION IN INFLATION HAS LED TO IMPROVED AFMI SCORE
ZAMBIA’S significant reduction in inflation and improved growth outlook has led to the improvement of the country’s score on the 2022 Absa Africa Financial Market Index (AFMI).
The country’s score on the AFMI 2022 has improved to 54 this year from 52 in 2021 recorded last year, driven by significant decrease in inflation and improved growth outlook.
The index evaluates the financial development of 26 countries primarily based on measures of market accessibility, openness and transparency where Zambia has remained in the 12th position despite registering an improvement.
The launch of the AFMI 2022 under the theme “harnessing the power of African opportunities” indicated that Zambia’s macroeconomic environment has improved over the past year supported by a reduction in inflation from over 20 percent last year to 9.8 percent.
This is according to Absa Bank Zambia Chief Executive Officer, Mizinga Melu, at the launch of the AFMI 2022 in
Lusaka this week.
Ms Melu said the country’s biggest improvement came in pillar five which is macroeconomic environment and transparency where Zambia rose by four places.
“The economic performance has also resulted in increased investor confidence in the country. Zambia is one of the only three countries in the index where inflation has fallen over the past year, to 9.8 percent in mid-2022 from 24.6 percent in mid-2021,” she said.
Ms Melu however, said the turnover of listed government bonds normalised after a temporary surge in 2021 which weighed on Zambia’s score and ranking in pillar one market depth.
At the same event, Ministry of Finance and National Planning Permanent Secretary in charge of budget and economic affairs Mukuli Chikuba said unification of company income tax is among the steps Government is taking to lower the tax burden in the country.
Mr Chikuba said a lower tax regime will result in stable fiscal environment on which businesses will thrive.
On debt, he said the current debt is not sustainable for Zambia and making it difficult for corporate entities to access business financing.
Earlier, Economist Oliver Saasa said Zambia was moving at a progressive pace in economic recovery under the current administration.