Caleb M Fundanga: Moderating the impact of the global meltdown on the
Zambian financial system
Speech by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the official opening of
Standard Chartered Bank Zambia Limited Ody's Excel Centre, Lusaka, 22 April 2009.
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The Chairman, Standard Chartered Bank Zambia Limited, Mr Michael Mundashi
The Managing Director of Standard Chartered Bank Zambia Limited, Mrs Mizinga Melu
Distinguished Guests
Members of the Press
And may I simply say Ladies and Gentlemen
I am pleased to be here today at the official opening of the new Excel Centre of Standard
Chartered Bank Zambia Limited. This event is taking place at a time when our economy is
faced with challenges emanating from the impact of the global financial and economic crisis.
Although the Zambian financial system is not fully integrated with the world's financial
markets, the impact of the crisis is already clear.
Mr Chairman, the financial turmoil has resulted in a reduction in projected global economic
growth and a decline in demand for commodities. As a commodity exporting country, Zambia
has experienced a decline in her export receipts due to the decline in commodity prices
reflecting a weak demand for these commodities. The declining export earnings and
reversals in portfolio investments have been reflected in the depreciation of the local
currency and consequent inflationary pressures towards the end of 2008.
Ladies and Gentlemen, the financial turmoil facing the world today has affected all of us
and we as regulators are trying to ensure stability in the financial markets. In this regard, the
Bank of Zambia has put in place measures to moderate the impact of the global meltdown on
the Zambian financial system. The Government also remains resolved to continue with
prudent fiscal policies and economic management, which have seen a buoyant financial
sector in Zambia, thereby resulting in the mushrooming of branches in different locations of
the country, such as the one we are inaugurating today.
In spite of the uncertainties in the global economy, Distinguished Guests, we remain
confident that the financial sector in Zambia will rise above the challenge and continue to
provide services to the communities where they operate.
Ladies and Gentlemen, I have stated at various fora that it is important for banks in Zambia
to take actions which support the development of our economy:
•
Banks need to open more outlets such as this one, to increase our people's access to
banking services, thereby empowering our citizens
•
Banks should provide more loans to the productive sector, such as Agriculture and
SMEs.
In striving to meet these demands, banks must always comply with the regulations as
stipulated in the Banking and Financial Services Act to ensure the safety of customers'
deposits. I am proud of the stability that has been exhibited by our economy.
However, I am disappointed that the cost of borrowing has remained high in
Mr Chairman,
spite of the improvements in the fiscal management of our economy. As you know, the high
cost of borrowing stifles the growth of the productive sector.
I therefore appeal to all the banks operating in Zambia to show more commitment to the
growth and development of our country by:
• Opening more branches
•
Providing more loans to increase the productivity of our economy, and
•
Encouraging more Zambians to open bank accounts through provision of easily
accessible and affordable products and services
All this, ladies and gentlemen, will greatly contribute to the emergence of a middle class in
Zambia, which will bring real economic development and lead to poverty reduction.
I am pleased to observe Standard Chartered Bank's commitment to growth and
reinvestment. You will all agree with me, however, that those who have more should do
more. I therefore look forward to seeing more from Standard Chartered Bank Zambia
Limited, as it is one of the leading banks in this country.
I thank you.