Govt reaffirms commitment to reforms

Central bank governor Dr Michael Gondwe
Central bank governor Dr Michael Gondwe

Government has reaffirmed its commitment to continue implementing reforms aimed at building and enhancing a sustainable legislative and regulatory environment for private sector-led growth next year.

Finance Minister Alexander Chikwanda says this will include government’s commitment to providing an environment that will encourage local content and business linkages with the help of the financial sector under the auspices of the Bank of Zambia and other financial sector regulators.

Mr. Chikwanda says government’s commitment to improve the welfare of the people in the country through various initiatives is underscored by the fact that this year, it has released 106.9 million kwacha from the Eurobond proceeds to the Development Bank of Zambia (DBZ) to support the financing needs of SMEs in the country.

Mr. Chikwanda who was speaking in Lusaka this morning when he opened an SME Local Content and Business Linkage Forum co-hosted by the Bank of Zambia and the World Bank, says he expects the forum to be used to brain storm and develop ideas on how to move forward the SMEs local content and business linkages development agenda in order to come up not only with recommendations but also ways in which the proposal could be translated into action.

The one day forum is being held under the theme: Encouraging Local Content and Business Linkages: Role of the Financial Sector.

Speaking earlier, World Bank Country Director Kundhavi Kadiresan noted the need to create greater linkages of the SMEs to the larger enterprises in key sector such as mining, agribusiness, tourism and retail.

Dr. Kadiresan says greater linkages will improve stronger domestic supply chains and bring about improved standards and greater transfer of knowledge and skills as well as greater overall economical productivity.

And Bank of Zambia Governor Michael Gondwe noted that despite the high potential to catalyze growth and create employment, the major barrier to the growth of the SME sector in Zambia is the shortage of financing.

Dr. Gondwe says this why it makes business sense for the financial sector to start look at the financing problems facing SMEs in a holistic manner which takes into consideration other developmental constraints which may impede sustainable growth and render financing ineffective.