The Global Economic Crisis and Its Impact on Zambia

TABLE OF CONTENTS

INTRODUCTION 3

THE ORIGIN OF THE GLOBAL RECESSION 4

IMPACT OF GLOBAL ECONOMIC CRISIS ON ZAMBIAN ECONOMY AND FINANCIAL SYSYTEM 5

LESSONS LEARNED FROM THE GLOBAL RECESSION 10

CONCLUSIONS 15

REFERENCES 16

EXECUTIVE SUMMARY

I remember back in 2007 when I was in my tenth grade at a boarding school, difficult financial times became known as the Global period/ times. This is a time when most pupils would not have enough food and contingency money for upkeep and would only be dependent on meals prepared from the school’s dining hall. This was not as a result of pupils not being mindful of their spending habit but it was at a time when the world economic crisis was just starting to show signs of hitting hard on peoples financial savings of which the Zambian and other developing econiomies where affected greatly. The global economic crisis first emerged as a financial crisis in the United States and European financial markets. The financial crisis led to the worst Global recession after the great depression of 1930 that was characterised by, the worst economic performance at least until 1939. Lending by Banks and other financial intermediaries to the household sector in the United States was growing at a rate far exceeding the overall economic growth experienced between 2002 and 2006.The financial crisis created a recessionary economic environment where commodity prices deteriorated so significantly and employment & inflation increase became the order of the day. Government then, became under pressure to mitigate its impact on the household, although it was very hard to do so as the households and the financial institutions where at the epic centre of this financial crisis. This paper aims at tracing the origins of the recession up to the current problems of the world economy and how Zambia’s economy was shaken by the financial crisis and what can be learnt out of this Global recession.

INTRODUCTION

The great recession which is also known as...