to the 12th media seminar that further expansion in the banking sector was eminent, as some commercial banks had plans to re - open or indeed open more branches across the country, this has come to reality as most of you have seen the establishment of new branches by several banks. these developments are undoubtably a manifestation of the improving investment environment arising from consistent macroeconomic reforms reflected in enhanced macroeconomic stability. we have also continued to received inquiries from foreign banks that want to establish operations in our country. under the financial sector development plan, implementation of activities has continued key among them being : a ) sovereign rating for zambia the process of obtaining a sovereign rating for zambia, being spearheaded by government has made appreciable progress, with the completion of the terms of reference for the provision of advisory services and subsequent submission of cabinet memorandum for approval. the sovereign rating is expected to compliment other government initiatives to promote foreign investment in the zambian private sector and stimulate the development of domestic capital markets and investment by zambians. b ) credit reference law and services following the issuance of the credit reference services ( licensing ) guidelines and the credit data ( privacy ) code, the bank of zambia has drafted the credit reference law. the draft law is currently undergoing legal review and is expected to be effected in the course of next year. meanwhile, the licensed credit reference bureau – credit reference bureau africa limited ( crbal ) has not yet commenced operations as some commercial banks are yet to provide the required data to the crbal. c ) the national payment systems law the national payment systems law has been enacted and became effective on 15 june 2007. the law is intended to mitigate the shortcomings that were in the legal framework and provide legal backing to international best practices in the payment systems. to all of you gathered here, i would like to implore you, not to only inform the public about these and other developments but to interpret what these mean to ordinary zambians. it is only when ordinary zambians, who are the key stakeholders, have an unquestionable understanding of these developments that they shall fully support our developmental policies and strategies. ladies and gentlemen, allow me to remind you that our quest for development will in no doubt be without challenges. the continued higher and unstable international oil prices poses one of the strong challenges to our targeted growth of 7 % this year and end year inflation of 9 %. another challenge, ladies and gentlemen, to a growing economy such as ours is the need to ensure availability

) at our offices in lusaka and our regional office here in ndola. nevertheless, i am confident that the respective presenters will ensure clarity in their presentations and fully respond to any issues arising there - from. ladies and gentlemen, allow me, at this point in time to brief you on the performance of the economy in 2006 and the period january – august 2007. as you may be aware, zambia has in the recent past recorded macroeconomic stability and growth in the economy, reflected in low and falling inflation, relative stability in the kwacha exchange rate, falling lending rates and positive real gdp growth rates underpinned by strong private sector investment in all growth or priority sectors. further, the financial sector has been stable, and continues to post growth. in 2006, the performance of the zambian economy continued to be encouraging as it registered a positive growth of 6. 2 % in real gdp, marking the eighth consecutive year of positive real growth. you will note that over the period 2001 - 2006 growth in real national output averaged 5. 0 % per annum and was above the average population growth over the same period, while inflation declined to 8. 2 % in december 2006 from 15. 9 % in december 2005. distinguished journalists, it is worth - mentioning that the growth, which has been broad - based has extended beyond the recovery of the mining sector and shown resilience to adverse shocks, such as droughts and record increases in oil prices, agriculture, construction, transport and communications, and tourism sectors have been the other key contributors to the sustained increase in economic activity. a lot of progress continue to be made on the inflation front, as shown in september 2007, when inflation declined to 9. 3 % despite having risen to 12. 7 % in march. continued implementation of prudent monetary and fiscal policies, fairly favourable developments in the exchange rate coupled with pro - growth and pro - poor agricultural policies that have led to an increase in food supply and subsequent improvement in the country ’ s food security largely explain the favourable developments in inflation. for instance, the country recorded an increase in maize surplus to 250, 000 metric tons ( mt ) this consumption period from 160, 000 mt during the 2006 / 2007 consumption period. with respect to the money market, given lower inflation and yield rates on government securities, commercial banks lending rates have been on the downward path. this can be illustrated by the nominal average lending rates which declined to around 28 % in december 2006 from about 34 % in december