way to mitigate the effects of a prolonged global financial crisis. currently, there are enormous business opportunities which still lie unexploited in zambia in virtually all sectors of the economy. it is important that we continue reducing the cost of doing business, in conjunction with the private sector, in order to improve investments in various sectors of the economy. the agriculture sector, for instance, remains underdeveloped despite the country possessing large tracts of arable land, adequate water and relatively good weather. this is one sector where the country can easily take advantage of its comparative advantage. the achievement and maintenance of a low and stable inflation rate, preferably single digit, therefore remains key to promoting investment, enhancing business planning and confidence in the economy, maintaining external competitiveness and stabilising people ’ s incomes. in the medium - term, government continues to pursue market and structural reforms in partnership with the private sector with the view of consolidating the gains so far attained for sustained economic growth and development. despite the adverse effects of the global economic meltdown, there are still prospects for appreciable economic growth in 2009 and the years ahead. gdp growth is expected to be led by growth in agriculture ; construction ; financial services ; manufacturing ; transport and communication ; and wholesale and retail trade. conclusion in conclusion, we all agree that zambia remains vulnerable to effects arising from the ongoing global financial crisis, particularly if it is prolonged. we hope that the actions that most affected countries, led by the us and the eu, have taken would help cool down the financial crisis and bring back the much needed confidence in the financial systems. for its part, the bank of zambia continues to closely monitor global developments and always stands ready to intervene in the local financial market with a view to prevent any systemic risks that may have negative effects on macroeconomic gains achieved thus far. once again, your excellencies let me thank you most sincerely for this opportunity to discuss the challenges zambia is facing in view of the current global economic crisis. i thank you.

caleb m fundanga : global financial and economic crisis and its effect on the zambian economy speech by dr caleb m fundanga, governor of the bank of zambia, to the sadc group of high commissioners and ambassadors meeting, lusaka, 9 july 2009. * * * chairperson your excellencies high commissioners and ambassadors from sadc resident in zambia distinguished guests ladies and gentlemen it is a great honour and privilege to be invited this afternoon to share zambia ’ s experiences given the unfolding global financial and economic crisis. in discussing this topic, i will begin by highlighting, albeit briefly, the origins of the current global economic crisis. i will then underscore the effect of the crisis on the zambian economy before i look at the policy responses, the challenges and then conclude. origins of the crisis as your excellencies are already aware, the genesis of the current global economic crisis has been traced to the collapse of the sub - prime mortgage market which started between 2002 and 2006. this was when lending to the household sector in the united states of america ( usa ) was growing at a rate far beyond that of the broader economy ( i. e. growth in gdp ). the rising delinquencies in the subprime mortgage market triggered turbulences in the subprime mortgage – backed securities market leading to a financial crisis which quickly spread to other advanced economies. subsequently, the financial crisis created a recessionary economic environment in which global trade, stock market indices, and commodity prices, such as copper and cobalt, declined significantly. the global financial and economic crises thus negatively impacted on economies around the world by adversely affecting trade and investment flows and the price of key export commodities. to respond to this crisis, several actions are being taken at global level by the major economies to address the root causes and the effects of the global financial and economic crises. these are fiscal and monetary policy stimulus measures aimed at boosting global consumption and investment demand in an effort to avoid a significantly sharper global contraction than that which has already occurred. measures typically entailed reduction of interest rates, tax cuts and increased government spending in form of bail - outs of strategic institutions and in some cases virtual nationalisation. concrete steps are also now being taken to reform the regulatory and supervisory frameworks governing the financial sector. further, increased resources have been provided to key multi - lateral institutions such as the imf and the world bank. these institutions have also been mandated to play a central role in leading the global response to