Advocates of market efficiency claim that our intervention is misplaced as it interferes with the working of free markets. My first academic paper on the “efficient market” hypothesis was published in 1977 and I remain convinced that the more moderate versions of this hypothesis are valid. In particular, I think investors should always start from the premise that the market is “hard to beat” and that “free lunches” are extremely rare. However, I also believe that the extreme form of market efficiency, according to which the market price always and immediately reflects and reveals the underlying fundamental value of the asset in question, has been disproved in multiple instances. Scholars have convincingly documented episodes of market overreaction, herd behaviour and momentum trading. There have also been numerous cases of what appeared ex-post to be manifest examples of mispricing in financial history, from the “tulip mania” in Holland in the 1600s, to the recent house price bubble in the United States. One possible reason for this, which has been stressed in recent academic literature, is that investors who disagree with market valuations, and wish to trade on their convictions, have little chance of making a profit if the mass of ill-informed or irrational (“noise”) traders is too large. In the rare case of a safe haven currency, like the Swiss franc, there is an economic justification for the central bank attempting to limit the detrimental impact of safe haven “financial” considerations on the real economy by, in a sense, accommodating demands for the safe haven.

There is also a game park, a well stocked curio market and the Mukuni Cultural Village, among the many attractions. I therefore urge you to find time or indeed stay an extra day or more to sample this special menu that Livingstone has to offer. Chairperson, Central Bank of Zambia is honoured and delighted to co-host the second AFRACA Forum that begins today, the 23rd and ends on 25th September, 2008. AFRACA is an association of Central Banks and financial institutions involved in the provision of financial services to the rural population in Africa and increasing access to financial services in general. Its membership of 94 institutions consists of central banks, commercial banks, agricultural banks, development and cooperative banks, other financial institutions and microfinance operators whose networks spread throughout 26 African countries. It is through workshops and fora of this nature, among other events, that AFRACA endeavours to disseminate information and share experiences among members and other industry stakeholders across the continent. Following the first Central Banks Forum held in Accra, Ghana and in view of the need to deliberate further on the topical issue of financial inclusiveness, AFRACA felt it necessary to hold the second Central Banks Forum under the theme, “Promoting Financial Inclusiveness”. The main objectives of this second forum are to harness current views on promoting financial inclusiveness, draw lessons and recommend strategies for improvement of the levels of access to financial services, particularly among the rural communities in our countries.