Transport and Communication Sector
Financial and Professional Services
In 2003, agriculture output is expected to increase by 6.8 per cent compared to a growth of 2.4 per cent in 2002 due to improved weather conditions, the resumption of universal starter pack scheme and other input schemes by employers. The small-holder agriculture sub-sector is expected to increase by 13.3 per cent.
Nonetheless, the large-scale sub-sector is expected to decline by 16.5 per cent in 2003 compared to an increase of 13.9 per cent in 2002. The decline in output is a result of low production in sugar and burley tobacco. Burley production declined by 20 per cent while sugar is expected to decline by 3.7 per cent in 2003. However, in 2004 the large scale sub-sector is expected to grow by 13.3 per cent as a result of intensified efforts to revamp tobacco production. Overall growth is expected at 7 percent with smallholder projected to grow by 5.7 per cent
Despite the continued poor economic fundamentals as manifested by high interest rates, fluctuations of the Kwacha vis-à-vis foreign currencies and inflation, the manufacturing is expected to increase marginally by 1.2 per cent compared to a decline of 0.1 per cent in 2002. The improvement is expected to emanate from sub-sectors like confectionery, publication, textiles and garments, cement production and dairies that have experienced high consumer demand. Based on industry expectations, increased demand in these sub-sectors will be sustained in the short to medium term resulting into a projected growth of 2.5 per cent in 2004.
Prospects for the mining and quarrying sector are good for coal after rehabilitation of the mines. Output is expected to increase by 23.5 per cent in 2003. The mining and quarrying sector dropped by 38.7 per cent in 2002 due to decline in production following prolonged rainfall and high taxes that negatively affect the large-scale sub-sector. The expectations are however, optimistic based on current trends and growth is expected to be a modest 10 per cent in 2004.
Despite the challenges the construction is facing including the extension of surtax, which has increased the cost of construction and has made companies less competitive; and high interest rates leading to lack of cheap working capital and capital investment, the construction sector is expected to increase substantially by 9.7 per cent in 2003 compared to an increase of 14.1 per cent recorded in 2002. This is a result of increased activity in the sector for private enterprise and household investments in construction. The scenario will remain more less the same with growth anticipated at around 7.5 per cent in 2004.
In 2003, output in the utilities industry is expected to increase by 4.7 per cent compared to an increase of 5.8 per cent in 2002. The growth is expected to emanate from the water sub-sector as a result of programmes to expand water supply system to reach more consumers and electricity due to high household demand. Despite blackouts experienced between mid February and May, electricity production is projected to rise by 25 per cent on account of increased household demand in 2004. Growth is however, expected at 7 per cent on the basis of value absorption by increased generation costs.
Despite the increase in smallholder agriculture output, and improvement in the output of manufacturing, the distribution sector is expected to increase by only 2.3 per cent in 2003 compared to 1.6 per cent in 2002. This is a result of low production in sugar and burley tobacco; and closure of some companies. However performance of some companies in fertiliser trading such as Optichem, SFFRFM and ADMARC is satisfactory enough to justify such growth and the situation is expected to improve in 2004 based on these factors coupled with positive prospects for burley and sugar production.
In 2003, prospects for the industry are positive. Output is expected to increase by 2.2 per cent in 2003, a slow down from 14.5 per cent in 2002. The substantial increase in 2002 was a result of good performance road freight transport mainly of relief items and the improved performance in the communication sub-sector. However, in 2003 air and rail transportation are expected to decline. The rail sub-sector is affected by the damaged Rivirivi Bridge; hence the company did not transport tobacco while the airline is fighting stiff competition within the sub-region. A growth of 3.3 per cent in 2004 is projected with telecommunications bringing a big chunk of growth and expected repairing of the rail line being another additive factor.
The sector is expected to grow by 6.0 per cent in 2003 from 6.3 per cent achieved in 2002. The industry has experienced increased activity in its direct output mainly as a result of an active market for financial instruments particularly Treasury Bills. Growth is expected to slacken slightly in 2004 but nonetheless will be on a positive course with 4.9 per cent expected.