By Kalata News
Lusaka 19/03/25 – THE Kwacha’s value on foreign exchange dropped by eight-point four percentage points in 2024 while inflation continued to rise, Zambia’s Finance Minister, Situmbeko Musokotwane has told Parliament.
In a Ministerial statement on the performance of the Zambian economy in 2024 this March, the Minister said 2024 was heavily impacted by the drought that reduced the country’s agricultural production leaving the country with a declined maize production in the 2023/2024 agricultural season of 54.5 percent from 3.3 million metric tonnes in 2023 to 1.5 million metric tonnes in 2024.
“The Kwacha traded at K27.88 per US Dollar at the close of 2024 from K25.71 at the close of 2023, representing an annual depreciation of 8.4 percent. This was mainly attributed to subdued supply amid elevated demand pressures exacerbated by higher imports of food and energy following reduced output due to the drought,” announced Dr. Musokotwane.
Dr. Musokotwane said Government expenditure increased by 11.2 percent at K197.8 billion against a target of K177.9 billion being influenced by an increased expenditure of personnel emoluments amounting to K53.3 billion, exceeding the target of K52.8 billion by 0.9 percent.
On farmer support, the Minister said there was slower releases of funds to farmers under the Farmer Input Support Programme (FISP) in the year 2024 with the expected remainder of funds being released in the first quarter of 2025.
Other support included the K10.4 billion released towards Social Benefits, surpassing the target of K8.4 billion.
Dr. Musokotwane said the increased release was on the Social Cash Transfer programme, with over K3.0 billion provided by cooperating partners helping support a total of 2.3 million beneficiary households under the programme.
“Madam Speaker, during the review period, the Treasury collected a total of K152.6 billion in revenues and grants, surpassing the budgetary target of K144.5 billion by 5.6 percent. Tax revenue amounted to K118.8 billion, exceeding the target of K114.8 billion, resulting in a positive variance of 3.5 percent,” said Dr. Musokotwane.
Zambia’s donors withheld about K1.4 billion causing the country to have a shortfall against the target of K3.4 billion.
Zambia’s average annual inflation rose to 14.96 percent in 2024 from an average of 10.9 percent in 2023.
The Minister said the rise in inflation was an effect of the drought experienced in 2024 which affected food production and electricity generation. Both food and non-food price rises contributed to the observed inflation rate.
Dr. Musokotwane said even though it was common knowledge that 2024 was a challenging year for the Zambian economy, the Government demonstrated exceptional resilience.
“In this regard, growth will most certainly be higher than the anticipated 1.2 percent we projected for 2024. As we get into the medium term, we expect the macroeconomic environment to also improve and grow the economy on an average of six (6) percent,” he said.
