ECONOMIC GROWTH: WHAT DOES IT REALLY MEAN?
Many people hear politicians and economists talking about GDP and economic growth, but what do these terms actually mean?
What Is GDP? GDP stands for Gross Domestic Product. In simple terms, GDP is the total value of all goods and services produced within a country during a specific period, usually one year.
Think of Zambia as one giant farm, factory, mine, shop and marketplace combined. Everything produced by farmers, miners, factories, transport companies, banks, shops, hotels, restaurants and other businesses contributes to Zambia’s GDP.
Family Example:
Imagine a family earns money from farming. Last year, they produced and sold 50 bags of maize worth K25,000 Their annual production was K25,000. This year, they produced and sold 100 bags of maize worth K50,000 Their annual production increased to K50,000. The family’s economic output has grown. The same principle applies to a country.
What Is Economic Growth?
Economic growth occurs when a country produces more goods and services than it did before. If Zambia’s farms produce more food, mines produce more minerals, factories manufacture more products, businesses expand, and more services are provided, the economy grows.
Simply put, Economic Growth = Producing More Than Before.
Why Economic Growth Matters
Growth creates opportunities. Growth creates jobs. Growth increases incomes. Growth attracts investment. Growth generates government revenue for roads, schools, hospitals and other public services. Without growth, there is very little new wealth to share. A country cannot sustainably improve living standards if it is producing less and less every year.
Zambia’s Recent Journey
One of the major economic challenges Zambia faced was moving from economic contraction where the economy was shrinking to economic expansion, where production and investment begin growing again.
The encouraging news is that Zambia has moved from periods of negative growth and economic distress to strong positive growth projections driven by recovery in mining, agriculture, energy and other productive sectors.
The challenge ahead is to ensure that this growth translates into more jobs, more business opportunities and a better quality of life for ordinary Zambians.
Growth alone is not the destination, but without growth, the journey to prosperity cannot begin.
Saviour Chishimba
President
United Progressive People (UPP)
UPND Alliance Partner