Another development arising out of electronic clearing was the establishment of an electronic funds transfer system called Direct Debits and Credits Clearing (DDACC) in October 2001. The DDACC system provides unparalleled convenience to both payer and payee for processing bulk and small value regular payments such as salaries and utility bills. Owing to its fully electronic nature, funds are cleared within 24 hours. In a further development, in June 2004, the Bank of Zambia launched the Real Time Gross Settlement (RTGS) system. This system facilitates real time settlement of large value and time critical payments. This is a significant step towards easing the payments side of economic activities in our country. The above accomplishments not withstanding, challenges still remain and we in the Bank of Zambia are set to drive the payment system towards one that will be secure, efficient, cost effective and accessible to the majority of Zambians. The rural population and the unbanked majority will have a prominent focus in our reform process. The Bank has also been instrumental in other reforms in the financial sector which include preparation of the Financial Sector Development Plan (FSDP) whose overall objective is to increase financial intermediation and promote efficiency of the financial system. Madam Chairperson, the theme “40 years of Central Banking: Facing the Challenges of the 21st Century” during this anniversary is meant to make us reflect on the achievements that the Bank has made so far and then focus our attention to the challenges that lie ahead.

Madam Chairperson, with respect to its organisational and functional structure, the Bank has overtime undergone modifications to suite its role as a monetary and supervisory authority. In addition, structural changes have been necessitated by the continuously changing demands along with changes in the economy and especially in the dynamic financial markets. From a handful of departments at inception currently, the Bank comprises the following core departments, Economics, Financial Markets, Bank Supervision, Non-bank Financial Institutions Supervision, Banking, Currency and Payment Systems, and the Regional Office in Ndola. The support departments include Procurement and Maintenance, Finance, Bank Secretariat, Human Resources, Information Technology and Internal Audit as well as a Security Division. In order to streamline the operations of the Bank and improve its performance, a performance agreement system for employees was introduced in 1995. This was meant to bring about a new work culture with emphasis on professionalism, based on the philosophy, “The BoZ Way means Action”. Mr President, Ladies and Gentlemen, since the 1996 Bank of Zambia Amendment Act, the Bank has continued to enjoy operational autonomy with regard to the formulation and implementation of monetary policies and attainment of relative financial system stability. The ability of the Bank to continually meet quantitative benchmarks set by Government and cooperating partners, can be attributed to the focus of its monetary policy on creating a stable macroeconomic environment as a precondition for sustainable economic growth.