may close down their businesses. while i appreciate this outcry, i wish to state that the exchange rate alone does not determine external competitiveness of exports. exporters should look at those areas in their production processes where they can attain efficiency gains and improve productivity. besides the appreciation of the kwacha which has an impact on inflation is beneficial to non - traditional exporters in several ways : • reducing cost of capital goods • reducing cost of imported raw materials • reducing cost of freight / fuel on its part, the government can assist this process by directing investment in infrastructure and structural reforms, including labour laws, so as to reduce the cost of doing business in zambia. mr chairman, in the government securities market, developments in yield rates were mixed in 2005. overall, the composite weighted average treasury bill yield rate stood at 16. 2 % in 2005, down from 17. 8 % recorded in 2004. in contrast, the composite yield rate on government bonds stood at 23. 0 %, up from 20. 9 % registered in 2004. as at may 5, 2006, the composite weighted average treasury bill yield rate came down sharply to 7. 7 % while the composite yield rate on government bonds declined to 11. 0 %. the sharp reduction in yield rates on government securities has been due to low inflation expectation coupled with high demand for these securities by the non - bank financial institutions and private sector. mr chairman, with respect to developments in the money market, commercial banks lending rates have also been coming down, though not as fast as the decline in inflation and treasury bills rates. commercial banks nominal weighted average lending base rate declined from 29. 8 % in 2004 to 27. 6 % in 2005. as at may 5, 2006, the weighted average lending base rates stood at 23. 7 %. clearly, there is a need for commercial banks to do more to reduce lending rates in order to influence a substantial expansion of private sector credit. lower lending rates will contribute to the reduction in the cost of doing business in zambia. sustainable lowering of lending rates by commercial banks should occur in the current environment of low inflation. distinguished guests, ladies and gentlemen, the macroeconomic gains attained in 2005 will be consolidated in 2006. the real gdp growth is projected at 6. 0 % while inflation is projected at 10. 0 %. the government will continue to pursue policies that would spur growth and assist in lowering inflation below the target. distinguished guests, ladies and gentlemen, at this juncture, i wish to talk

about your role as insurance brokers in economic growth, as the remarkable economic gains that i have outlined above would not have been possible without your contribution. in my humble understanding insurance brokers are independent intermediaries who provide the link between clients and insurance companies. by performing this function, your firms are important economic agents acting in the best interest of clients by providing them with sound and impartial professional and practical advice regarding insurance services. the intermediary role that you play undoubtedly makes you critical in the growth of the zambian economy in general, and the insurance services sector in particular. the advice that you provide to your clients is important because it promotes a more competitive market within the insurance industry. this may includes an analysis of the most suitable firm, the various types of cover on the market and importantly a fair price for the given product. in some instances, you even go as far as carrying out surveys on various insurance products, negotiating prices of those products for your clients and presenting reports to insurance underwriters. ladies and gentlemen, with your contribution, and that of other stakeholders, zambia could easily achieve the national socio - economic goals in the medium to long - term. every economic unit needs the services of a booming insurance sector, through your brokerage, for them to contribute more to economic growth and development. in this regard, i wish to urge you to continue facilitating and promoting investments in the insurance sector. mr chairman, allow me to point out that, in order for you to contribute positively to the development of the insurance sector in the country, it is imperative that you carry out your work in an honest manner, maintaining the highest degree of integrity, only then can your firms become credible enough to attract business from the public and private firms operating in zambia. one of the most important attributes of a credible insurance broker is the ability to remit funds to insurance companies on time. as intermediaries between clients and insurance companies, you are entrusted with a heavy responsibility of looking after other people ’ s funds. clients pay premiums due to insurance companies through insurance brokers. to enhance credibility of your institutions and contribute to the growth of the insurance industry, i would like to urge you to ensure that you remit your clients funds to insurance companies on time and as agreed. delays in remitting funds may tempt you to put such funds to other uses which may lead to default and erosion of the integrity upon which your intermediary role is based. mr chairman, zambia has come