gentlemen, it is very clear that small - scale cross - border trade plays a very vital role in our economies, particularly in generating income, creating employment and alleviating poverty. however, ladies and gentlemen, the small - scale cross - border trade faces a lot of barriers and impediments, including lack of access to financial and payment services such as currency exchange and transmission facilities. traders from both sides of the border are forced to carry cash and must first convert funds into united states dollars from their respective countries and then into the domestic currency of the country they are purchasing goods or services from. by so doing, cross - border traders face many risks including theft, exchange losses and other conversion costs. ladies and gentlemen, although there have been some bilateral efforts towards formalising and facilitating small - scale cross - border trade in southern africa, these have not been bis central bankers ’ speeches enough. for instance, zimbabwe signed a memorandum of understanding with malawi to facilitate informal trade, especially between small and medium - sized enterprises. mozambique and zambia also signed a memorandum of understanding to facilitate the repatriation of currencies of the two countries that are accumulated by traders located along the common border areas. it is expected that this memorandum of understanding will be expanded to include malawi. the lack of financial and payment services has not only hindered small - scale cross border trade but also led to the establishment and entrenchment of parallel currency markets at the borders. needless to say, these are associated with vices such as counterfeiting, facilitating illegal trade, as well as enhancing cross - border money laundering activities. moreover, to us monetary authorities, illegal cross - border local currency circulation creates the potential for complicating the conduct of monetary policy, especially if a significant amount of a country ’ s domestic currency is being used outside its jurisdiction. the volumes of goods and services traded and amount of currency handled by individual traders may seem small. however, they are collectively significant and have implications for the conduct of monetary policy. for instance, the world bank estimates small - scale border trade in southern africa to be around $ 17. 6 billion. other studies have estimated that small - scale cross - border trading accounts for about 42 % of gdp in sub - saharan africa. ladies and gentlemen, it is for this reason that this roundtable symposium has been convened with the following objectives : 1. to stimulate broader interest in the topic of small scale cross border trade ; 2. to initiate an inquiry into the

of access to financial services to 48 % by 2008 and 50 % by the end of 2009. following the earlier survey, a subsequent study called the “ finscope supply – side survey ” was conducted in 2007. some of the key findings were that : a. bank charges are unaffordable for 90 % of the rural adult population in zambia ; b. zambian banks generally have high operating costs and interest rate spreads ; and c. the physical coverage of financial outlets may not increase at current cost levels. it is therefore, my hope that this forum will address these and other challenges that slow the pace of financial inclusion in our countries. honourable minister, over the past two years, we have noted with delight that financial institutions in zambia are beginning to rise up to the challenge by beginning to broaden the scope of their financial services and extending their services beyond the traditional customers to include previously unbanked communities. in addition, the zambian financial sector has in recent years experienced growth in numbers of both registered commercial banks and non – bank financial institutions. we in zambia, therefore, see this forum as being timely and providing a unique opportunity for african financial institutions to share knowledge and experiences on how best to promote financial inclusiveness, particularly among our rural and peri - urban communities who have since not been fully integrated in the financial systems of most of our countries. this entails that they are not effectively participating in the economic growth that is being experienced in these countries. this forum also comes at a time that we in zambia have just lost a statesman who was passionate about rural development and empowerment of all citizens. the conference theme therefore, is appropriate for us as we carry on the vision of our beloved late president, dr. levy patrick mwanawasa, sc ( m. h. s. r. i. p ). in this respect, we would also like to acknowledge the many expressions of sympathy extended to us during our time of mourning. distinguished delegates, on behalf of afraca, i would like to thank our various presenters and panelists for accepting to facilitate our deliberations over the next two days. i would therefore, like to implore all delegates to engage fully in these discussions and make the most of the wealth of knowledge and experience represented in the house. ladies and gentlemen, it is my pleasure and privilege once again to welcome you to the second afraca central banks ’ forum. i now wish to invite our distinguished guest of honour, the minister of finance and national