Caleb M Fundanga: Foreign private investment in Zambia Opening remarks by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the Closing and Dissemination Workshop on Foreign Private Investment and Investor Perceptions Survey, Lusaka, 20 January 2011. *  *  *  The Deputy Secretary to the Cabinet, Mr Evans Chibiliti; The Deputy permanent Secretary at the Ministry of Works and Supply, Mrs Bweupe Kaonga; The MEFMI Executive Director, Dr Elias Ngalande; The IMF Country Representative, Mr Perry Perone; Heads of Government Departments present; Chief Executive Officers of various Companies and Associations present Colleagues from Bank of Zambia; Distinguished Participants; Members of the Press; Ladies and Gentlemen. It is my honour and privilege to officiate at this very important Closing and Dissemination workshop of Phase III of the Survey on Foreign Private Investment and Investor Perceptions. As I welcome you all, I wish to convey my appreciation for your contributions to the success of this project. May I, in this regard, express our special appreciation to the private sector colleagues for their cooperation during the survey. Let me also take this opportunity to extend my sincere gratitude to the Private Sector Development (PSD) Programme, for providing financial support for this very important project. Further, our thanks go to the Macroeconomic and Financial Management Institute (MEFMI), and Development Finance International (DFI) for providing technical support to this survey.
High inflation, prevailing uncertainties and tighter financing conditions dented private consumption and investment, which fell by 0.9 per cent and 3.6 per cent respectively. Survey indicators for economic activity have steadily improved over recent months, coinciding with reduced concerns about energy shortages and price increases. These factors coupled with the ongoing support provided by fiscal policy and the continued resilience of the labour market, are expected to support a recovery over the coming quarters. Accordingly, projected growth for 2023 has been revised up to 1.0% in our latest staff projections, which also foresee growth of 1.6% in both 2024 and 2025. It has to be stressed, though, that the ECB staff projections were finalised before the recent emergence of financial market tensions. As such, these tensions imply additional uncertainty around the baseline assessments of inflation and growth. I will now turn to inflation, which has decreased from its peak in October owing to a sharp drop in energy prices and stood at 8.5% in February. Input cost pressures, which are partly related to the past surge in energy costs and the impact of supply bottlenecks and re-opening effects, are all weakening. However, accumulated price-pressures are still spreading through the economy with a delay. As a result, inflation excluding energy and food, has continued to increase, reaching 5.6% in February. Wage pressures have strengthened on the back of robust labour markets and employees aiming to recoup some of the purchasing power they have lost to high inflation.