For instance, the weighted average lending base rate dropped to 29.8% in June 2004 from 39.6% in August 2003. This action was consistent with Government’s objective to ensure increased credit to priority sectors such as agriculture. I am glad to inform the conference participants that a noticeable increase in credit to key growth sectors namely agriculture, tourism, manufacturing and mining has been recorded since this policy action by the Bank. This process has been greatly assisted by a significant reduction in Government borrowing from the banking sector. In its continued effort to develop a fully functional foreign exchange market, in July last year the Bank established a broad-based inter-bank foreign exchange management (IFEM) system as the new mechanism for determining the exchange rate in Zambia. Under this system market making has been transferred to commercial banks with the Bank performing mainly an oversight role. Coupled with favourable developments in exports, the IFEM has to-date yielded encouraging results as evidenced in the relative stability of the Kwacha against currencies of most major trading partners. Mr President, Ladies and Gentlemen, one area that has seen remarkable reforms is that of the payment systems in Zambia, for which the Bank has been actively involved. These reforms include the establishment in September 1999 of the Zambia Electronic Clearing House Limited which provides a speedier mechanism of clearing funds to customers. It also reduces the risk of errors during processing of payments.

23  Services liberalisation is also a more efficient form of rebalancing because services industries tend to have higher domestic value added, and jobs, than manufactured goods. The lower import content of services compared with goods means smaller changes are needed to address current account imbalances. 24  For  example, a £ billion increase in UK financial services exports would reduce the UK’s trade deficit by £ billion, whereas the same increase in exports of autos would contribute £ billion. Of course, liberalising services is not straightforward, as barriers are typically not tariffs but ‘behind the border’ differences in regulatory standards and trading conditions. This is where global standards and regulatory cooperation should help. 23  Roughly equal to 15%. These calculations are based on the estimated effects of reducing services trade restrictions on services exports reported in Nordås, H.K. and Rouzet, D (2016), ‘The impact of services trade restrictiveness on trade flows’, The World Economy, and the estimated mapping between services trade restrictions and services trade costs reported in Miroudot, S. and Shepherd, B (2016) ibid. 24 In sterling terms. In percentage terms, the changes are larger for services reflecting the fact that they start from a smaller base. 10  All speeches are available online at www.bankofengland.co.uk/speeches  10  Arguably the greatest possibilities are in financial services given the major progress in financial reform. Indeed, financial services could serve as a template for broader services trade liberalisation. And with Brexit, we have the coincidence of necessity and opportunity.