Tuesday, March 10, 2009

The Global crisis and its impact in Zambia

“The Emergence of the Global Economic Crisis and its Impact to Social Economic Development of Zambia"
Paper Presented at the ZCTU Top Leadership Workshop - March, 2009

The genesis of the current global financial crisis started between 2002 and 2006 when lending to the household sector in the United States of America (USA) was growing at a rate far beyond the overall economic growth. The global economic crisis first emerged as a financial crisis. Subsequently, the financial crisis created a recessionary economic environment in which commodity prices, particularly copper, deteriorated significantly. The impact of the global financial and economic crises on economies around the world has been on investment, imports and exports to individual economies. In the case of Zambia, the initial shock to the economy was felt in October 2008 when the collapse in the global stock markets led to a reversal of direction in the so called portfolio investments from outside Zambia and subsequent exchange rate volatility.