offer home loans. third, the issue of high interest rates necessitated by among other things high inflation levels in zambia. as at end december 2005, annual inflation was at 15. 9 % and is expected to go down further. fourth, the issue of poor credit culture among our people. again i am happy to inform you that the central bank in partnership with the bankers association of zambia are in the process of developing credit reference bureau guidelines and will in the near future issue licences to deserving companies. lastly, but not the least, the issue of lack of an effective secondary financial market in zambia is being addressed with commencement of work on the financial sector development plan ( fsdp ). let me join the honourable minister of finance in wishing barclays bank zambia plc the very best of success with the launch of the home loan product. i thank you!!

this perspective, the role of the legislature and the media in ensuring the african governments make the right policy choices in dealing with the crisis will be critical in determining how well african economies weather and recover from the crisis once it is over – as all crises do come to an end. in this regard let me offer one simple example of how critical the role of the legislature and the media may be : the conventional wisdom is that one important way in which african economies can ensure that they are able to limit long - term damage to their economies is to ensure that they do not indulge in policy reversals for short term gain that sacrifice the longterm growth prospects. mr. chairman, policy reversals are more likely to occur in an environment in which information flows and understanding is poor between economic managers such as central bankers on one side and the legislature and the media on the other. populism can wreak havoc on good economic policy making. in this regard africa does not need to rehash the false choice of market versus the state – both are part of the fabric of society and the economy. furthermore, calls have been heard that african governments should also nationalise banks and purchase car companies as the developed economies, the owners of capitalism, have done. these are ultimately dangerous calls as the nature of our individual economies matters in determining the appropriate remedy for our economic ills. it is for this reason that my address today is entitled “ the central bank, the media, and the legislature : can they work together? ” my simple answer is that they can, and that they must – particularly in the unprecedented circumstances in which we find ourselves in today. mr. chairman, before i outline how the bank of zambia has engaged both the media and the legislature and the positive results that we believe we have reaped, allow me to state very quickly how a strong relationship between the media, the legislature and the central bank is a modern feature of central banking. mr chairman, the role of modern central banks revolves around three key functions : price stability ; financial system stability ; and the maintenance of the payment system. price stability has the greatest weight in the goals of most central banks. advances in economic theory and computing power as well as the developments in financial markets have greatly enhanced our understanding of the economy and our ability to understand and forecast inflation. central banks act to influence inflation some periods into the future – a period determined by the individual characteristics of the economy in question. today we understand this process as targeting inflation