of zambia introduced a policy rate in april 2012 to, among other things, enhance communication of monetary policy direction to the public and introduce transparency in the way commercial banks and other financial institutions price their products. ladies and gentlemen, owing to the general decline in the rate of inflation over time, interest rates are expected to decline. however, commercial banks ’ average lending rate rose to 16. 4 % in december 2013 from 16. 1 % in december 2012 largely reflecting upward adjustment in the bank of zambia policy rate. the adjustment in the policy rate was aimed as containing inflationary pressures attributed to removal of fuel and maize subsidies during the year. in 2013, the average lending rate increased to 17. 0 % at end - march. as the cost of borrowing is a key factor in facilitating sustainable economic growth and enhanced financial inclusion, it is one of bank of zambia ’ s objectives to see commercial banks ’ lending rates eventually trending down significantly. colleagues, zambia ’ s external sector has also registered significant improvements over the last ten years, with notable surpluses recorded over the last five years. this was largely on account of higher growth in export earnings relative to import bills. total merchandise export earnings have more than doubled over the last five years to 10. 4 billion us dollars in 2013 from 4. 5 billion us dollars in 2008. the increase was driven by a rise in earnings from both metal and non - traditional exports. metal exports rose by 76. 1 % to 7. 0 billion us dollars in 2013 from 4. 0 billion us dollars in 2008 due to both improved prices and an increase in export volumes. non - traditional export earnings posted a stronger growth of 283. 6 % to 3. 4 billion us dollars from 900 million us dollars over the same period. however, the current account surplus narrowed in 2013 as imports grew faster than exports. this is a normal trend in a growing economy as most of the imports are machinery and intermediate goods such as industrial boilers and equipment, petroleum products, chemicals and motor vehicles that are expected to enhance productivity and ultimately increase production. in the foreign exchange market, the kwacha has been relatively stable in the last few years. however in 2013, the kwacha was characterised by a depreciating trend against most major bis central bankers ’ speeches trade partner currencies, except the rand. the kwacha depreciated against the us dollar by 4. 9 % to an annual average of k5. 39 / us $ from k5. 14 /

michael gondwe : outline of zambia ’ s recent macroeconomic performance and projected outlook opening speech by dr michael gondwe, governor of the bank of zambia, at the 15th bank of zambia media seminar, siavonga, 1 may 2014. * * * mr chairman, distinguished colleagues from the media fraternity, senior director – monetary policy, senior director – supervisory policy, fellow bank of zambia officials, ladies and gentlemen. it ’ s my great pleasure and honour to be with you today at this important seminar for professional media practitioners. allow me first, on behalf of the bank of zambia, and indeed my own behalf, to begin by welcoming you to this very important event, being the 15th in the bank of zambia – media seminar series that we have been conducting for journalists from across the zambian media fraternity. distinguished colleagues, it is simply not possible to overemphasise the importance of the media to matters affecting national development. you are the window through which the world sees us all. your reporting conveys important information about the economy, as well as the business environment and financial performance of the country, industries, institutions, households and indeed individuals. this information becomes very useful to a wide range of users in making business decisions. therefore, as journalists, you bear a great responsibility of keeping the public as well informed as possible and it is imperative therefore, that you report factually and accurately. it is not for us to remind you that one of the attributes of being factual and accurate is to be able to verify information as much as possible. ladies and gentlemen, it is for this reason that the bank of zambia finds immense pride in organising this event, whose objectives are to interact with the media so as to : 1. share information on the role and functions as well as operations of the bank of zambia in the zambian economy ; 2. discuss recent developments in the zambian and global economy ; and 3. provide an outlook on future economic and financial developments. through this interaction, we also seek to clarify certain economic and financial terminologies that are frequently used in economic or business reporting. at this juncture, distinguished colleagues, allow me to outline the recent macroeconomic performance in zambia and its projected outlook. the zambian economy has recorded robust economic growth rates for over a decade now with gdp growth averaging at 6. 4 % in the last 10 years. this growth has been broad - based, extending beyond the mining sector to the agriculture, forestry and fisheries ; manufacturing ; construction ;