Basic HTML Version
93
www.ebizguides.com
Finance
THE HON. ALEXANDER B. CHIKWANDA
MINISTER OF FINANCE AND NATIONAL
PLANNING
Zambia’s fiscal policies and national planning activities are anchored around the national development ob-
jectives established by the Ministry of Finance and National Planning. They are directed towards promoting
economic growth, employment creation and poverty reduction.
In my Ministry’s capacity to plan for the economy and mobilize financial resources into the key areas of devel-
opment, we have established major plans to construct infrastructure across various sectors of the economy
through the PPP arrangements. These plans include roads, airports, farming blocks, and power generation.
These developments, along with an increase in resources granted towards healthcare and education, will
contribute greatly to realizing our National Vision Plan.
The mining sector remains fundamental to Zambia’s economic growth. It contributes greatly to the economy
through its creation of employment and generating a general increase in the disposable income of Zambians.
The Bank of Zambia’s monetary policy framework is focused on maintaining a single digit inflation rate and the
link between changes in Central Bank interest rates and commercial bank lending rates.
The financial performance and condition of the banking sector in the first half of 2010 were satisfactory follow-
ing the adverse impact of the global financial crisis in 2009. The sector’s earnings and profitability improved
and I am hopeful that this growth trend will continue. On aggregate, the banking sector was adequately capi-
talized and the liquidity position remained satisfactory.
There was some deterioration, however, in the quality of commercial banking assets as a result of an increase
in the level of non-performing loans following the global credit crunch. Since March 2010, however, the level
of non-performing loans has stabilized. Furthermore, the level of non-performing loans does not represent a
major systemic threat, as the majority of the banks are generally well capitalized and profitable.
The financial sector is developing quickly as new and innovative financial services, such as the introduction of
mobile and Internet banking services, have revolutionized the provision of efficient financial services nation-
wide. Furthermore, the introduction of these services in rural areas without banks has the greatest potential to
financially empower millions of Zambians across the furthest reaches of the country.
Money supply grew strongly in 2010. This reflected the broader recovery in domestic economic activity and
increased domestic financing for the Government budget. In 2010, growth in money supply increased by 23.6
percent from 2.8 percent in the corresponding period in 2009. Much of this growth was a result of increased
lending to the Government.
The most important element for me to highlight is that Zambia has turned around substantially and is poised
for serious growth. The growth continues today and looking ahead I am quite optimistic that we will continue
to see this growth. This growth represents genuine hope that the main challenges facing Zambia will become
a thing of the past.
Sincerely,
Alexander B. Chiwanda
MINISTER