An ongoing challenge is that the threats are ever evolving. The nature of illicit fund flows are varied and often cut across jurisdictions and economic sectors. In the case of money laundering (ML), the intention is to camouflage the origin of ill-gotten proceeds or property. Terrorist financing (TF) can be different in that the sources of such funding may be of proper or legal origins. The motivation is often to disguise the use of the funds. 6. Criminals can and will try to use increasingly sophisticated ways to “beat the system” to launder money or finance terrorism. It is very difficult to estimate the size of this problem given its opaque nature. There have been various estimates that the amount of money laundered each year is far in excess of $ trillion. In truth, no one really knows. What is more important is that globally, it is recognised that this is an important issue that affects us all. ML and TF threats undermine the confidence and stability of financial systems. There are also high social and political costs. 7. This is why at national levels, many countries including Singapore have taken holistic measures to address ML/TF risks. Besides a multitude of actions relating to laws, regulations, penalties and public awareness, specific tools also include the ability of regulators and law enforcement authorities to carry out risk surveillance, investigation and information exchanges. A number of international organisations and groupings, including the Financial Action Task Force (FATF), IMF, G20, OECD’s Global Forum on Tax, the Egmont Group etc.

The growth of this sector is expected to be further bolstered by the establishment of the Multi-Facility Economic Zones in Lusaka and Chambishi to further diversify the economy and promote trade, stimulate export activities, technology, skills transfer and job creation. In pursuing an export-led growth strategy, the economic zones would actively promote value addition in identified specific products, such as, copper, vegetables, tobacco, gemstones, cotton yarn, leather products, sugar and oil cakes, of which the country has a competitive advantage. For instance, there has been a large increase in tobacco production, which has led to increased export earnings. Unfortunately, much of the tobacco is exported in a raw form with very little treatment or processing in the country. Significant investments in plant and machinery for value-addition will therefore be needed to offset this scenario. Thus, with expected large investments in Economic Zones and Export Fund facilities like the one we are witnessing today, Zambia’s competitiveness through value addition is expected to improve. Mr President let me also commend all the institutions involved in the two syndicated loans. It is gratifying to note that these facilities have been made possible due to the partnerships between the local financial institutions and international ones. I commend such partnerships and challenge other local institutions to enter into similar arrangements to reduce the cost of borrowing and promote growth in Zambia. Congratulations should be extended to the Zambia National Commercial Bank, ALS Capital and Calag Capital, AFREXIM, PTA Bank and Loita Capital to name but a few for the initiative.