The Times of Zambia (Ndola)
11 July 2009
The Bank of Zambia (BoZ) will demand more transparency among market players in the financial sector to limit the risks associated with the global financial crisis on the country's economy.
BoZ governor, Caleb Fundanga said the central bank would be acting to ensure that market players in the financial sector provided detailed information on their transactions. Dr Fundanga said when he addressed Southern African Development Community (SADC) high commissioners and ambassadors on Thursday that one of the lessons learnt during the economic crisis was the need for transparency.
"In addition, we will continue to work towards strengthening and developing our financial markets as well as encouraging competition and efficiency," he said.
The governor said it was important to accelerate diversification of Zambia's economy as one way of mitigating the impact of the prolonged economic downturn. He said Zambia still had enormous business opportunities, which were unexploited and it was important that the country continued to reduce the cost of doing business.
Dr Fundanga cited the agriculture sector, as one area that had remained underdeveloped despite Zambia possessing large tracts of arable land as well as adequate water and relatively good weather.
For Zambia's prospects of 2009 and beyond, the achievement and sustenance of a low and stable inflation rate would remain key to promoting investment and enhance business planning and confidence in the economy.
He said despite the adverse effects of the global economic meltdown, there were still prospects for appreciable economic growth for Zambia this year and beyond. Dr Fundanga, however, noted that Zambia remained vulnerable to the credit crunch especially if it prolonged but hoped that actions by bigger economies like the US and the EU would address the crisis.
Dr Fundanga said that second round pass through effects of the global financial crisis could have a negative impact on financial institutions in Zambia if the institutions were not well managed and did not strengthen their risk management systems.
And Dr Fundanga said that the effects could be in the form of deterioration in personal loans as was evident presently, and the banks needed to strive to strengthen their risk management systems to avoid further reduction in their loan portfolio.
Officiating at a ground breaking ceremony for the new US$9.5 million Stanbic Bank Zambia head office in the Show grounds yesterday, the BoZ governor said banks must emphasise on implementing measures to mitigate the effects of the crisis on their operations.
Dr Fundanga said it was encouraging that the Standard Bank group, through its subsidiary Stanbic Bank was investing in the infrastructure at a time when the spill-over effects of the global financial crisis had had impacted on the economy.
Standard Bank group deputy chief executive, Ben Kruger said the bank viewed Zambia as an important market, since it started operating in the countryp in 1992, because the market offered vast potential for banking business.
The development is a joint venture between Standard Bank Properties of the Standard Bank group and Farmers House of Zambia.
Farmers House managing director, Robin Miller said the investment by the Standard Bank group was a demonstration of viable partnership between an international organisation and a Zambian company.
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