BOZ to restrict inflation to single digits

THE Bank of Zambia (BoZ) will continue to lower and stabilise inflation to single digits to enable the banking industry to facilitate the flow of foreign private capital to the economy.

Central bank governor Michael Gondwe said the bank would continue its efforts to lower and stabilise inflation to make the banking industry more capable of facilitating the flow of foreign private capital.

Speaking at the American Chamber of Commerce in Zambia meeting on responding to trends in public finance and private investment in Zambia, Dr Gondwe said the central bank was undertaking various reforms aimed at improving the efficiency and effectiveness of the industry.

Dr Gondwe said the central bank was promoting and encouraging new payment systems such as point of sale, mobile money as well as electronic banking which are contributing to the lowering of the cost of doing business.

“We are undertaking work with stakeholders towards the implementation of the national financial switch in 2014.This is expected to lower the cost associated with the use of different payment platforms,” he said.

Dr Gondwe believed that enhancing the secondary market activity would make Government securities more attractive to investors as it was the case in well-developed markets.

This would provide increased opportunities for private sector to raise financial resources from the market through bond and equity insurance.

He said the central bank was implementing the cheque truncation system which was expected to shorten the time the cheque clear, thereby encouraging the use of cheques and contribute to an improved business environment.

Dr Gondwe said the changing patterns in the global Foreign Direct Investment (FDI) have had a positive impact on African countries like Zambia, saying that in the 10 years, the net FDI flows grew by more than 100 per cent to US$1,066.6 million in 2012 from $347 million in 2003.

He said mining continued to receive the largest share of FDI flows accounting for 53.9 per cent or $933.7 million in 2012 followed by the manufacturing sector at 27.1 per cent.

 

[Times of Zambia]