of a stable, sound and market - based financial system that would support efficient resource mobilisation necessary for economic diversification, sustainable growth and poverty reduction. currently, key recommendations of the fsdp are under implementation. for example, the creation of a credit reference bureau will improve the information available to credit providers in order to enable them to make better credit decisions. your excellency, the zambian government recognises the importance of expanding financial services to our rural areas, as part of its overall strategy to reduce poverty. the importance of the agricultural sector to the economy, in general, and small - scale farmers in particular, has made provision of financial services to rural areas a priority on the government ’ s agenda. the need to improve financial services in economically disadvantaged areas also comes in light of the reduction in the presence of a number of banks in these areas over the last ten years. these areas need banking services from both commercial banks and non - bank financial institutions. distinguished ladies and gentlemen, although this has been the case, the microfinance institutions ( mfis ) have risen to the occasion to fill - up the gap in the provision of financial services such as small loans and savings facilities in the periurban and rural areas. in addition, the national savings and credit bank ( nscb ), formerly known as postal bank, which has a rural network has been providing financial services to the remote parts of the country. your excellency, coming to economic developments, i wish to state that the zambian economy has performed relatively well in recent years. inflation and interest rates have been coming down while the exchange rate of the kwacha against major currencies has relatively stabilised, following a steep appreciation in 2005. distinguished ladies and gentlemen, in 2005, the economy registered growth of 5. 0 % in real terms, marking the seventh consecutive year of positive real growth in output. this growth was largely due to the expansion in construction, driven by a robust demand for housing as well as large - scale investment which led to a marked pick - up in mineral production, particularly of copper. other sectors such as tourism as well as transport, storage and communications also contributed to the overall economic growth. inflation declined to 15. 9 % at the end of december 2005 from 17. 5 % at the end of december 2004 despite several setbacks. these included the partial drought that significantly reduced food supply and high prices of oil and petroleum products. attainment of single digit inflation has been

billion to below us $ 1 billion. the removal of the debt burden also made zambia more attractive to foreign direct investment and capital flows, that have been an important source of investment financing. furthermore, over the recent past, the growth in the real gross domestic product ( gdp ) has remained positive and above 5 % for the last six years. despite the adverse effects of the recent global economic crisis, the country recorded an impressive real gdp growth of 6. 3 % in 2009. this is at a time when other countries in the region and world over were posting negative growth rates. the country also attained a single - digit inflation level of 9. 9 % at end december 2009 while the exchange rate of the kwacha against major currencies has remained relatively stable. in addition, the financial sector has been stable with improvement in banking services. these impressive economic trends suggest that the reform programmes that the government has implemented are now bearing fruit. the reforms have focused on the restructuring of the economy, to let markets determine key decisions so as to allow the private sector take the lead in providing investment in the economy. however, despite the progress noted above, we are still far from achieving many of our developmental objectives. we are alive to the fact that we cannot achieve our development ambitions if we close ourselves from the rest of the world. the economy faces enormous financing needs especially in view of the high levels of poverty among our people. we are also alive to the fact that these challenges do not just end at obtaining a good sovereign rating or raising low - cost finance, but more importantly prudently deploying funds raised to projects with a high rate of both social and economic return. this is the challenge we face. ladies and gentlemen, the importance of obtaining a sovereign rating and issuing a sovereign bond cannot be over - emphasised. by providing access to long term funds, a sovereign bond issue provides wide possibilities for countries to meet financing needs demanded by their growing economies. at the same time, issuers are assured that their financing needs will be met in an orderly and timely manner. this will no doubt result in cost efficient investments in the economy. in a country like ours a sovereign rating and bond issuance will lead to availability of relatively less costly finance for the timely execution of a number of long term projects in sectors like energy, communication, agriculture and mining. the timely execution of such projects would no doubt accelerate economic growth further and impact positively on the high levels of poverty. this workshop has therefore come at the