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The good times are here to stay in the short to medium term. Sugar is in high demand in the European Union and Nakambala can reap high returns from this.
The price of gold, South Africa’s biggest export, has surged 16 percent this year, helping to underpin the currency for instance. Copper has climbed 25 percent, benefiting Zambia, Africa’s biggest producer of the metal.
Overall, Sub-Saharan Africa is benefiting from rising prices of gold, oil and copper, helping the region’s economy expand an estimated 6.8 percent this year, from 5.5 percent last year. The challenge now is for countries like Zambia that are dependent on commodity exports to properly “manage” the commodity boom.
If we respect the truth, then we need to admit that commodity boom phases have not been managed well in the past, and we are at risk of making the same mistakes again. The main factors underpinning commodity prices were strong demand for platinum in devices that cut pollution in cars and rising demand in China and other emerging markets.
Still, commodity prices might drop, hurting growth in some African countries. To assume that current prices and the current boom phase reflects a permanent shift, rather than a temporary opportunity, would be a naive and risky approach to adopt.
If our analysis is correct, then the slump will come and it will bring with it a significant decline in commodity prices but prudent asset management now would help governments that are diversified enough to transition into manufacturing, construction and service sectors.
However, with norminal GDP rising from $3.24 billion in 2000 to well over $10.71 billion in 2006; per capita GDP income thriving from $303.00 in 2000 to $902.00 in 2006; inflation falling from 26.1% in 2000 to just 9.2% for fiscal year 2006; tourism at its highest peak and a combination of other factors … the Zambian Enterprise is headed for some good times, that’s the memo this week from us at the Zambian Chronicle … thanks a trillion
Brainwave R Mumba, Sr.
CEO & President – Zambian Chronicle
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