by administrative controls on interest rates and the exchange rate. although the banking act of 1965 was created to enable the implementation of monetary policy, in the preliberalization era monetary policy involved multiple objectives, such as, financing agriculture and parastatal companies, and providing guarantees for export marketing, which at times presented the bank with conflicting roles as a monetary authority. to the contrary, during the current liberalization period, which commenced with vigor in 1992, the bank, in conformity with market reforms, has steadily moved towards the use of market - based structures and systems as opposed to direct instruments in the conduct of its monetary policy. in this regard, and beginning 1993, deregulation of interest rates, removal of capital controls and freeing of the foreign exchange market were implemented as part of the broader financial sector reforms. as a result, through the use of mainly market - based instruments of monetary policy, the bank has made several notable achievements. amongst these, has been its contribution to the reduction of annual inflation to 17. 2 % in december 2003 from 197. 0 % at the end of december 1992. further, inflation has remained just under 20 % in the first half of 2004 and it is the bank ’ s desire to see single digit inflation within the foreseeable future. the benefits of lower inflation in single digits can not be over - emphasized, especially with regard to the fight against poverty. madam chairperson, last october the bank took a bold stand of effecting a down - ward adjustment in the statutory reserve ratio to 14. 0 % from 17. 5 % on both kwacha and foreign currency deposit liabilities. this was intended to release funds to commercial banks. the outcome of this policy action has been increased loanable funds being available to commercial banks. this in turn has greatly contributed to the downward trend in lending rates in the economy. 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

caleb m fundanga : campaign to keep zambia clean and healthy opening remarks by dr caleb m fundanga, governor of the bank of zambia, at the review walk of the “ keep lusaka clean, green and healthy campaign project ”, lusaka, 17 september 2009. * * * the acting minister of local government and housing, hon bradford machila his worship the mayor of lusaka, his worship robert chikwelete the chairman of the baz, mr saviour chibiya chief executive officers of commercial banks distinguished invited guests members of the press ladies and gentlemen i am honored to officiate at this important occasion at which banks have undertaken to conduct a review of the “ keep lusaka clean, green and healthy campaign ”. hon minister, as you are aware, the “ make zambia clean and healthy ” campaign was launched by the government in 2007 and was aimed at keeping our surroundings clean and green in order to improve the health standards throughout the country. you may wish to know that the banking sector through the bankers association of zambia and the bank of zambia commenced work immediately after the national launch. a project committee was formed and each bank including the boz embarked on implementing the campaign by making financial contributions. to ensure a uniform landscape on all islands along cairo road, a single company was employed to carry out landscaping and maintenance works including maintaining and keeping the pavements and gardens clean and green. the programme also included placing dustbins along the pavements and ensuring that the street lights were repaired and lit. it is highly gratifying to see how much work has been accomplished and i am sure that the results are clear for all of us to see today. this initiative, ladies and gentlemen, is one sure way of inculcating and promoting a culture of cleanliness amongst our people. it is also an effective way of expressing our corporate social responsibility. beautiful and clean surroundings also go a long way in complementing government ’ s efforts of developing tourism. in fact another dimension of the initiative required that all banks including the boz maintain and keep their offices and surroundings clean at all times. in this regard, we at the bank of zambia have introduced regular inspections of offices while ensuring that all staff are aware of their responsibilities towards the clean campaign. furthermore, by keeping their premises or business environment clean, banks provide the satisfaction that customer need. you would all agree with me that a business done in a clean environment leave the customer totally relaxed and in good spirit, prompting another visit in future