Michael Gondwe: Economic and financial sector developments in
Zambia
Speech by Dr Michael Gondwe, Governor of the Bank of Zambia, at the official launch of the
Zambia National Commercial Bank Limited (Zanaco) Ndola West Branch, Ndola, 27 June
2013.
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The Managing Director, Zanaco
Members of the Executive Management Team
Members of the Press
Distinguished invited Guests
Ladies and Gentlemen
Let me begin by tendering apologies on behalf of the Governor of the Bank of Zambia,
Dr. Michael Gondwe who is not able to be with us this evening as he is attending to other
commitments. He however requested that I represent him at this important occasion. It is
therefore my honor and privilege to officiate at this important occasion to launch the new
Ndola west Branch of Zambia National Commercial Bank Limited. I am told that the Branch
was initially on Maina Soko Road opposite Barclays Bank and that the bank decided to move
here because the place is bigger, which I believe will provide a better and spacious
environment.
Distinguished Guests, the Bank of Zambia is reliably informed that since the inception of
the bank more than 37 years ago, Zanaco has grown its customer base to over 640,000 and
has grown its network of branches and agencies to 64, in addition to the branch being
launched today, 53 Zanaco Xpress offices and 26 Zanaco agents. The bank has also
invested in more than 162 ATMs and 465 Merchant POS terminals. This development
demonstrates the bank's strong and long term commitment to be a significant player and
contributor to the development of our financial sector, and the growth of the economy as a
whole. The Bank of Zambia wishes to commend the Board of the Bank, Managing Director
and his Team for these commendable developments.
Ladies and Gentlemen, you will no doubt be aware of the crucial role that banks play in
financial intermediation. The real challenge therefore is for all financial sector players to play
their honest part in enhancing savings mobilization and to effectively channel the public's
savings to support financing of viable economic activities. as our economy continues to grow
and per capita incomes increase, demand for financial services from both the corporate
sector and the general public will continue to grow rapidly. Therefore, Zanaco's wide branch
network will strengthen its capacity to meet this growing demand for financial services.
Managing Director, Distinguished invited Guests, Ladies and Gentlemen, the Bank of
Zambia is always pleased to be invited to occasions such as the one we are witnessing
today, because it gives us an opportunity to share with you and the public some of the key
developments that are taking place in our financial sector and the economy at large. In this
regard allow me to say something about what is currently the most topical issue not only in
the financial sector but in the national economy as a whole. This is Statutory Instrument 32
now revised and re-named SI 55 on the Monitoring of Balance of Payments.
Ladies and Gentlemen, as the name of the SI suggests, the aim is to "monitor" and not to
"control". There has been much public debate on this subject matter which seems to suggest
a public misunderstanding of the intentions of the SI. Some quarters have gone so far as to
link the issuance of SI 55 to the earlier issued SI33 as amended through SI78 (Currency
Regulations) and concluded that Government is introducing exchange controls.
allow me to
Managing Director, Distinguished invited Guests, Ladies and Gentlemen,
clarify that SI33 was issued with the primary intention of reinforcing the use of Kwacha, which
legal tender, for all domestic transactions. This is in line with practice in most countries
around the world. The SI has is no way intended to stifle business. The initial Monitoring of
Balance of Payments regulations were initially issued under SI 32. When the Government
issued SI 32, Bank of Zambia embarked on an exercise to seek the views of the financial
system players, the business community and the public at large. Arising from these
stakeholder engagements, it became clear that some of the provisions of SI 32 would
impede the smooth flow of business. It was also evident that the timeframe within which
stakeholders were supposed to prepare for the implementation of the SI was not adequate.
The Bank of Zambia therefore compiled all the stakeholder inputs and comments and
submitted proposed amendments to Government.
Managing Director, I am glad to report that Government responded favorably to the
submissions made and have today re-issued the regulations as SI 55, incorporating the
majority of the proposed amendments. As you may be well aware, Government extended the
date of implementation of the SI to 1st July 2013 from the initial 16th May 2013. I now urge
all stakeholders to read the new regulations carefully and make appropriate representations
where need arises. The commercial banks in particular will play a critical role in giving
guidance to their customers on the Regulations. The SI has already been posted to the Bank
of Zambia website which can be accessed from www.boz.zm. Allow me to reiterate that the
intention of the Balance of Payments regulations are merely to monitor the flow of funds in
and out of the republic with the ultimate aim to provide more accurate data to facilitate
decision making on the national economy.
Managing Director, The Bank of Zambia will continue to implement and monitor various
regulatory measures aimed at enhancing the operations of the banking sector and efficiency
in the wider economy and remains committed to support all efforts to reduce the cost of
doing business in Zambia.
Distinguished Ladies and Gentlemen, allow me to conclude my remarks by reminding
commercial banks that they must become proactive in identifying new markets and
developing appropriate new products and services, especially for the excluded population if
they have to remain competitive and relevant in our fast growing banking sector. As has
been echoed at various meetings, the Bank of Zambia has financial inclusion as one of its
strategic objectives and initiatives by market players to make this vision a reality are always
highly commended. The Bank of Zambia will play its own role and make every effort to create
an environment that supports innovation and market developments by financial institutions.
Managing Director, distinguished Ladies and Gentlemen, It is therefore, the Bank of
Zambia's expectation that Zanaco and other banks will take advantage of opportunities
arising from the general positive economic outlook on account of improving macroeconomic
conditions and improvements so far recorded in various sectors of the economy and foster
greater developments in the financial sector. Finally, let me extend my gratitude to the Board
of Directors and the Managing Director of Zanaco inviting me on this occasion to mark the
official launch the Ndola west Branch.
It now my honour and privilege to declare the Ndola west Branch officially opened.
I thank you.