The Bankers Association of Zambia (BAZ) says it is hopeful that the finance minister Situmbeko Musokotwane In 2022 national budget will focus on pronouncements that will concentrate towards growing the economy, stabilizing the macroeconomic environment and a general plan of how to manage the country’s debt situation.
Association Chief Executive Officer Leonard Mwanza said predictable and stable interest rates, exchange rates and inflation are key to restoring fiscal fitness therefore the need for pronouncements that will address these important issues.
Mwanza said stable interest rates, exchange rates and inflation would allow businesses to access funding at a lower cost, plan long term and avoid cyclical spikes of volatilities that tend to come close to each other.
Speaking in an interview with the Zambian Business Times-ZBT, Mwanza said various challenges arise from unstable interest rates, exchange rates and inflation, which cause problems for people in business and banks when they are lending therefore the need to manage such turbulences.
He said there is need for reforms in the energy sector so that the association can see how it can take a lead in supporting the Oil Marketing Companies thus the need to see reforms where government gives OMCs more latitude in terms of importation of fuel.
He added that the banking sector is ready to provide support to OMCs in order to avoid the disruption of the flow of fuel in the country therefore the need for policy changes.
He noted that the association is also looking forward to policy changes in the way government manages the Farmer Input Support Programme (FISP) as there is need to see a gradual strategy on how to wean out beneficiaries.
“Banks stand ready to ensure that as the reforms are going on, they continue to provide the needed support to agro dealers or farmers involved in the agribusiness so it’s about reforming the current policies so that banks are able to also participate in that space”, he said.
Mwanza said there is need for stable mining policies in the mining sector as they are key to unlocking pending investments, increase production and taking advantage of the high copper prices on the international market.
He added that there might be need for policy changes in the way government collects mineral royalties because if they can be brought back on the market, it could help to push up predictable flow of foreign currency to support the exchange rate.
He noted that the association is looking forward to seeing how it can work with government to ensure that digital financial transactions are automated as there are pronouncements that there is need to increase digital financial inclusion.
“We have systems which are available; we would like to see a committed response towards ensuring that all government businesses or services are brought on the e-commerce space. We want to see a situation where government can allow payment of things like school fees, land rates and health services using digital financial solutions which are available on the market”, he said.
He said this would see more money circulating within regulated financial institutions and if more liquidity circulates within the financial system, it can go a long way in helping to push down the cost of funds in the market and that would benefit both the banks and the borrowers.
“Because if they are borrowing at more affordable rates, they will be in a position to expand, grow their businesses, grow the jobs and also grow the economy which is basically the forecast of what we want to see in the 2022 budget”, he said.
Mwanza said the association wants to see a strategy, which will change the mindset of entrepreneurs such as retailers who tend to shun digital payments in preference to cash payments adding that the industry is ready to work with government to realise the objective of creating a cash lite echo system.
He said the industry has invested in infrastructure systems that are operating efficiently but what remains is a coordinated approach towards achieving and realising the objective of creating a cash lite echo system.
