The Governor of the Bank of Zambia, Michael Gondwe, commended African Development Bank President Donald Kaberuka for his outstanding leadership and the Bank's positive contribution to the economies of the continent.
Gondwe's comments came during a Bank of Zambia luncheon hosted in the honour of Kaberuka, which was attended by former AfDB Bank President, Willa Mung'Omba (1980 to 1985), the former Governor of the Bank of Zambia, and former Government of Zambia Finance Ministers, among others.
Gondwe further asked the Bank to consider increasing the support to SMEs through lines of credit to commercial banks. Gondwe stressed that despite the positive growth of the economy recorded over the past 10 years, there were still some serious challenges in attaining inclusive growth and job creation especially amongst youth. He also mentioned that infrastructure development remains a huge challenge for the economy with particular infrastructure needs in energy, roads, railways and communication, which has resulted in a high cost of doing business.
He stated that measures have been taken in an effort to address the economic challenges noted above, such as Zambia turning to the international capital markets to raise development finance and diversification. He projected a 50 per cent growth in non-traditional exports from 2011 to 2012.
He indicated, however, that more needs to be done in order to promote diversification and a vibrant manufacturing sector.
Gondwe further stated that the cost of borrowing remains high and the Bank of Zambia is working tirelessly to foster financial inclusion and to lower the cost of borrowing through the implementation of the Financial Sector Development Plan.
For his part, President Kaberuka reiterated the need for job creation, without which there would be no way to sustain all the measures being taken.
He also indicated that there is a need to build resilience in the systems and get more people in the labour market as quickly as possible. He further commented on the Euro bond that the Government obtained and advised that Zambia should lead by example by using the funds well, and building domestic management capacity to which he committed the Bank support.