Zambia embarks on major reforms

Zambia, a country in Southern Africa, is embarking on major economic reforms to reposition and restructure its economy for sustainable growth. Chileshe Moono, Zambia Economist at FNB, recently shared insights on the key developments in the country during a discussion with CNBC Africa. The focus of the reforms in Zambia is on the energy and mining sectors, two critical areas that play a key role in the country's economic stability and growth. In the energy sector, Zambia has introduced an open access network to the transmission and distribution lines. This move is aimed at attracting more investment into the energy sector to address the current challenges in electricity supply, exacerbated by the drought the country is facing. By allowing new players to utilize the transmission and distribution lines previously monopolized by the state-owned entity, AMZESCO, Zambia hopes to diversify its energy sources beyond hydroelectric power and encourage investments in alternative sources like solar and wind energy. The reforms in the mining sector are equally promising, with the introduction of a special purpose vehicle to manage trading on behalf of the government. This shift from relying on dividend payments to actual production from mines signifies a strategic move towards ensuring a steady supply of critical minerals for local manufacturers. The government's commitment to guaranteeing the supply of these minerals to support value addition locally is a positive step that aims to stimulate economic growth in the country. Moreover, Zambia has secured additional funding from the IMF to support vulnerable populations affected by the recent drought. The funding will be used for cash transfers and food support, addressing immediate needs while also investing in long-term measures to future-proof the agricultural sector. The government's focus on irrigation plans and winter farming demonstrates a proactive approach to mitigating the impact of climate change and ensuring food security in the country. Ghana and Kenya are also navigating economic challenges but show signs of progress in their debt restructuring and revenue plans. Ghana's debt restructuring program is expected to attract new investments and address structural issues, while Kenya's successful refinancing of its euro bond has alleviated some fiscal pressure. Despite short-term challenges, both countries are working towards broader economic recovery and stability. In the face of inflationary pressures and climate-related challenges, African economies are exploring innovative solutions to enhance energy security and food production. The agility displayed in addressing energy crises and the commitment to financial support for non-state energy development projects reflect a shift towards sustainable economic development in the region. By restructuring debt and creating fiscal space for investment in critical sectors, countries like Zambia are laying the foundation for long-term growth and stability. As Africa navigates various challenges, including climate change and global economic uncertainties, the focus on economic reforms and sustainable development remains paramount. The resilience and adaptability demonstrated by countries like Zambia in implementing strategic reforms bode well for the region's economic resilience and long-term growth prospects.