Private Sector Development Association (PSDA) chairman Yusuf Dodia has commended government for dispelling stakeholder anxiety over the Bank of Zambia (BOZ) Amendment Bill.
The BOZ Act of 2013 amends the Bank of Zambia Act and seeks among other things to regulate and monitor foreign exchange inflows and outflows, and amounts remitted.
Various stakeholders have raised concern over the new act with immediate past Central Bank governor Caleb Fundanga saying that government should instead strengthen monitoring mechanisms of existing institutions and not bringing new regulations.
But Mr Dodia told ZANIS in an interview that the move by Finance Deputy Minister Miles Sampa to explain government’s motives towards amending the act is a good way of dispelling rumours that may have an effect on the sector.
At a recent tour of the Bank of Zambia offices, Deputy Minister Miles Sampa affirmed that the Bank of Zambia Act of 2013 was not meant to reintroduce foreign exchange controls on the economy but to monitor exports for the Kwacha’s stability.
And according to the ZANACO newsletter for 22 March 2013, the bank said the kwacha is in the near term expected to trade at a narrow range of between KR5.370 (K5,370) and KR5.420 (5,420) on the interbank for bid and offer respectively.
Mr Dodia however said there is need for government to clearly articulate their policies so as to calm the growing concern by people in the banking sector who feel the new provisions to the law will give government more monetary control.
The PSDA chairman stated that clear statements and government coordination in economic policies will go a long way in reinforcing confidence in the economy especially with attempts to stabilise the kwacha.
Mr Dodia added that the fall of the kwacha in recent weeks has been due to the insufficient foreign currency in circulation brought on by uncertainty in the market.
He affirmed that the takeover of mines, lack of coordinated policy pronouncements, the BOZ amendment bill, and insufficient foreign currency are among the factors that have contributed to the recent poor performance of the local currency.
He stressed the need to manage the business environment prudently to allow players gain confidence in the local currency
Mr Dodia urged government to look at ways of increasing foreign currency on the market to stabilise demand and in the medium to short term boost the local currency.