This outturn was attributed to the decline in both annual food and non-food inflation. BIS Review 57/2010  1  In the external sector, Zambia’s external position showed remarkable improvement as reflected in the build-up of gross international reserves to 5.1 months of import cover in 2009 from 2.1 months of import cover in 2008. Zambia’s overall balance of payment position is expected to remain favourable in 2010 due to the rebound of copper prices on the international market as well as the expected increase in copper production as some mines increase production to full capacity and the resumption of production at some mines. The rebound in the international price of copper in the second half of 2009 and the return of foreign portfolio flows resulted in an appreciation of the exchange rate of the Kwacha by 4% at the end of the year. However, fiscal performance in 2009 was weak, mainly due to the global economic crisis, which reduced domestic revenues. Despite this, Government remained within the programmed domestic financing for the year. Ladies and Gentlemen, the financial sector has remained resilient despite the adverse effects of the recent global financial crisis. Currently, the Zambian financial sector is characterised by high liquidity levels, reflecting tighter lending standards in the wake of the lessons from the global financial crisis leading to marked decline in private sector lending. As a result, the demand for the relatively risk free Government securities has increased causing a decline in yield rates on Government securities.

The decline in Government securities yield rates and relatively low inflation experienced since the beginning of the year should contribute to a decline in banks lending rates and thus stimulate borrowing by the private sector. Ladies and Gentlemen, the critical role the accounting profession plays in enhancing economic development cannot be over-emphasized. One of the most important role the profession plays in any organization is to provide accurate, reliable and high quality financial information which communicates an organization’s operating results, its overall health, as well as raise the transparency of its various operating activities. The other role is the audit function, both internal and external, which provides independent assurance of the information produced by accountants and also reviews the control environment in which this information is produced. In a growing economy like ours, the need for high quality financial information is very critical. Financial information provides the basis for all financial decision making at all levels of economic activity, from households to large international organizations. Remember, there is no high quality information without the work of accountants and that is one reason why accountants play such a critical role in today’s global financial system and the global economy. You provide financial information that helps businesses and governments run properly. You provide investors and creditors with reliable information for decision making. You also provide assurance services founded on integrity and independence. Distinguished Members, the vision of this country is to become a prosperous middle income country by the year 2030.