The Lusaka Securities Exchange – LuSE has signed a Memorandum of Understanding – MoU with the Policy Monitoring and Research Center – PMRC aimed at promoting increased levels of financial and capital mobilization for industrial growth at every level of economic activity.
Speaking during the signing of the MoU between LuSE and PMRC in Lusaka on 6th May 2019 attended by the Zambian Business Times – ZBT, LuSE Chief Executive Officer Pricilla Sampa said the partnership will energize the growth of the stock markets which will benefit the economy.
Sampa said much will be achieved in directing and promoting public understanding of the stock market through research adding that meaningful economic development and industrialization will be achieved.
Speaking at the same event PMRC Executive Director Bernadette Deka – Zulu said capital markets are important for inclusive growth specifically in wealth distribution and ensuring that capital markets are safe for investors.
Deka – Zulu said it is a well know factor that a well-developed capital market creates a sustainable low-cost distribution mechanism for multiple financial products and services across the country and further increases mobilization of savings and improve efficiently the volume of investors.
She said the partnership between the two will enhance understanding and comprehension of capital and financial markets as well as financial literacy among the citizenry. “In the financial sector we are aware that government policy is aimed at ensuring stability in the banking and non-banking sectors, including enhancing financial markets deepening to stimulate increased access to financial services to support economic growth, in this view we cannot overemphasize the critical role that capital markets play in any economy,” she said.
LuSE has struggled to attract especially small and medium enterprises – SMEs to list on its alternative investment market that was launched as an answer to capital raising which has been a major missing ingredient in Zambia.
The government in 2019 through the Industrial Development Corporation – IDC has announced that two of its state owned companies (Zambia State Insurance Corporation and ZAFFICO) will he listed on LuSE which is expected to breath some new levels of relevance into the local bourse. However, the challenge remains that its attractiveness remains questionable as seen by the low levels of listing and transaction volumes on already listed stocks.
More needs to be done by LuSE to join the league of frontier African bourses in South Africa, Kenya, Nigeria and Ghana. There is need for the management at LuSE to benchmark their performance against the leading African countries at the minimum to ensure that Zambia is not left behind in terms of financial markets development.
Many are the times that we talk of slower rates of private sector development and its institutions like LuSE that can act as game changers to the ability to efficiently allocate capital, that can then be applied to diversify the economy and improve exports for Zambia.
