amending the act, the bank ’ s primary role was solely “ to formulate and implement monetary and supervisory policies that will ensure the maintenance of price and financial system stability ”. this was deliberate, as experience world - over has shown that you can only achieve sustained and high economic growth in an economic environment characterised by low and stable inflation. thus, by working to ensure price stability as well as maintenance of a safe, sound and efficient financial sector, the bank is contributing to the achievement of sustainable economic growth and, ultimately, poverty reduction. in a nutshell, following the amendment of the bank of zambia act in 1996, the bank ’ s main responsibilities comprise price and financial system stability. the bank ensures financial system stability by licensing, supervising and regulating the activities of banks and non - bank financial institutions so as to promote the safe, sound and efficient operations and development of the financial system. ladies and gentlemen, i trust that, as members of unzabeca, you have actively participated in these series of lectures and expanded your knowledge of the functions of the bank of zambia. on our part as bank of zambia, we strongly encourage investment in education, which has been demonstrated by the sponsorship of these lectures. in this regard, i wish to take this opportunity to call upon other institutions to support our university by either sponsoring a series of lectures, like the bank of zambia has done, or rendering any financial assistance. as many of you may be aware, most of the companies in zambia have benefited, in one way or the other, from the services offered by our universities. as for the bank of zambia, most of its management members of staff, including myself, are graduates of this university and were members of unzabeca. therefore, as a token of their appreciation to unzabeca, they have made a generous donation in the sum of k9. 5 million. this donation, i hope, will go a long way in supporting unzabeca programmes. however, may i caution you to manage these funds prudently and ensure that they are applied towards the attainment of the intended unzabeca objectives. please, do not be wasteful now that unzabeca coffers are liquid! in conclusion, as patron of unzabeca, i look forward to being involved in unzabeca activities. in this regard, i undertake to promote your activities, at any slightest opportunity, to other institutions, which would benefit from your services. with these

caleb m fundanga : financial sector challenges and progress in zambia speech by dr caleb m fundanga, governor of the bank of zambia, at the information exchange forum on sources of finance, lusaka, 10 december 2007. * * * • mr chairman • representatives of international financial institutions • chief executives and representatives of financial institutions • distinguished ladies and gentlemen i am greatly honoured to be given an opportunity to make some remarks at this forum. i wish to extend a warm welcome to all participants gathered here today, particularly those who have travelled from outside the country. i hope that you will not only have fruitful deliberations but also find time to explore the beautiful scenery and experience the warm hospitality that zambia has to offer. mr chairman, ladies and gentlemen, this forum is more than timely as zambia is working tirelessly towards financial deepening, wealth creation and reducing the levels of unemployment. in order to achieve this, affordable financial services should be available to the majority of businesses. in fact, the forum has come at an opportune time when the economy has shown signs of macroeconomic stability and growth. the financial sector in zambia is considered relatively under developed. in spite of this status, post independence governments have always recognised the importance of the financial sector to national economic development. this is the reason why the activities of the sector had up until 1992 been controlled by the state. since then, the financial sector has been liberalized while simultaneously strengthening the regulatory framework. concerned with the limited contribution of the financial sector to economic development, the government devised and formulated policy mechanisms for addressing a number of identified obstacles within the framework of the poverty reduction strategy paper ( prsp ) whose implementation started in 2002. in line with the prsp framework, the world bank and the international monetary fund undertook an assessment of the financial system through the financial sector assessment programme ( fsap ) which was complimented by our own review. some of the principle areas of concern identified included : • low financial intermediation with limited access to financial services, especially for the rural and peri - urban population and the low - to - middle income earners ; • poor credit culture in the market ; • multiple and potentially conflicting roles of the government in the financial sector ; • weak regulatory framework for non - bank financial institutions, insurance and pension funds ; • undeveloped money and capital markets ; and • limited long - term development and housing finance. in recognition of the strategic importance of the financial sector to the country ’ s development and poverty reduction efforts,