The International Monetary Fund (IMF) has said that Zambian economic prospects are favorable and have been bolstered by sizable investments.
The IMF picked out investments in mining, manufacturing and residential construction as some of the major issues that have contributed to the enhanced economic landscape of Zambia, reported Sunday Times of Zambia.
It urged the Zambian government to boost tax revenues next year and in subsequent years to contain domestic borrowing while providing a scope for increased spending on developmental programs.
In a statement posted on its website after a recent visit to Zambia by its mission, the IMF said Zambian domestic borrowing needs to be contained while providing opportunities for increased funding on infrastructure and social programs to meet national development goals.
The IMF, however, said that the Zambian government has already initiated a comprehensive review on its tax system with the aim of broadening tax base and improving the efficiency and equity of the system.
"Monetary expansion has been faster than programmed in recent months and corrective action is being taken to meet the end-year targets," said the statement.
It said by implementation of the fifth national development plan (2006-2011), the economic growth of the southern African country could strengthen further and living standards rise at a quicker pace.
But the IMF said that sustaining robust growth hinges on maintaining macro-economic stability, making more effective use of public resources and undertaking improvements in infrastructure.
It said there is also a need to improve the financial and private sector reforms which are essential to enhance productivity and competitiveness.