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Zambia's economy in commodity crunch

March 25, 2009 at 12:00 PM   |   Comments

LUANSHYA, Zambia, March 25 (UPI) -- Zambia's copper-driven economy has stalled badly, turning a boom into a bust for investments and a hungry population, various sources said.

"We used to eat three meals a day. Now we do one," said Lucas Ngoma, an electrician with a family of eight in Luanshya, Zambia, The Washington Post reported Wednesday.

Recently, International Monetary Fund Managing Director Dominique Strauss-Kahn said international efforts "must ensure that Africa is not left out," of recovery efforts.

The continent's economy is expected to grow 3.25 percent in 2009, a drop from an earlier prediction of 6.7 percent, the IMF said.

Growth is good, but mines in the copper belt invested heavily in exploration and modernization in recent years and now find themselves over-invested in a collapsed market.

Like many commodity-producing countries, Zambia's demise came late, but then swung around with a vengeance.

Copper, which is responsible for two-thirds of the country's export revenue, was priced at more than $8,000 a ton last year, but has recently fallen to $3,900 a ton. The impact has closed mines and left a recently bustling economy in a lurch.

"We will be rationing," said Ngoma, who the Post said recently traded a DVD player for a sack of dried fish. "One fish can be shared," he said.

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