##ractive. however, following the introduction of the broad - based interbank foreign exchange system ( ifes ) in july 2003, the exchange rate of the kwacha against major foreign currencies, particularly the us dollar, has been relatively stable. the kwacha appreciated by 2. 6 % against the us dollar in 2004, after depreciating by 7. 2 % in 2003. other factors contributing to the relative stability of the kwacha include strong performance of the external sector, prudent fiscal management, and the broad weakness of the us dollar in the international market. from the behaviour of the exchange rate of the kwacha against major currencies, it is clear that, supported by effective supervision, foreign exchange market participants are able to police themselves and instil discipline in the market. ladies and gentlemen allow me, at this juncture, to turn to the other function of the bank of zambia – that of ensuring financial system stability. as you may be aware, financial system stability is very critical to the maintenance of macroeconomic stability. as a matter of fact, monetary policy would not be effective in pursuing the inflation objective if the financial system were not stable, for monetary policy actions are transmitted through financial institutions. in this regard, a stable financial system plays a catalytic role for financial institutions to provide the financial products that will contribute to the development of the real estate business. therefore, to enhance the capacity of the financial institutions to meet the challenges of financing, among others, the real estate sector, the bank has undertaken a lot of reforms. for instance, the bank ’ s legislative and supervisory powers have been strengthened to conform to a liberalised financial sector. however, the development of a more active secondary financial market to enhance efficiency in the financial system remains a key challenge to us. to address these and other challenges, the government approved the financial sector development plan ( fsdp ) in 2004. in coming up with the fsdp, the government recognised, among other weaknesses, that public financial institutions that were established to facilitate the provision of various financial services to the majority of the people in the country were insolvent, and therefore ineffective, or have closed down. e. g., mortgages ( znbs ) ; agriculture lending ( lima bank, co - operative bank and exim bank in the past ) and ; banking services for the rural populace ( nscb ). in addition, long - term project finance has remained difficult to access for

caleb m fundanga : barclays bank home loan product vote of thanks by dr caleb m fundanga, governor of the bank of zambia, at the official launch of the barclays bank home loan product, lusaka, 25 january 2006. * * * • the minister of finance and national planning, hon. ng ’ andu peter magande m. p. • the board chairman of barclays bank zambia plc, mr hakainde hichilema and board members present here today • the acting managing director barclays bank zambia plc mr daniel nel, • barclays bank zambia plc staff, • distinguished invited guests, ladies and gentlemen i feel greatly honoured to be invited to give a vote of thanks to the honourable minister ’ s speech at the launch of the barclays bank home loan product. on behalf of bank of zambia and indeed on my own behalf, i would like to congratulate barclays bank plc zambia for leading the way in establishing long - term finance for the real estate sector. distinguished invited guests, its just a few months ago that i was invited to talk to an audience on the theme, “ investment opportunities in the zambia real estate business : the role of bank of zambia ” at a workshop on investment opportunities in zambia – integrating african property markets. i remember telling the audience then that although the share of the real estate sector in gdp has been increasing over the years, it could perform even better if certain issues were addressed. i particularly mentioned the following as impediments to real estate sector development : 1. lack of long term finance 2. high interest rates necessitated by among other things high inflation levels in zambia 3. poor credit culture among our people. 4. lack of a more active secondary financial market the picture was not promising for the real estate sector and the only positive economic variable i remember mentioning as helping the real estate sector was the exchange rate of the kwacha that has been stable against major currencies since july 2003 when the bank of zambia introduced the broadbased inter - bank foreign exchange system ( ifes ). distinguished guests, today i feel honoured to tell you that most of the issues i raised a few months ago as impending real estate sector development are now being addressed. first, the exchange rate of the kwacha against major international currencies has continued to improve drastically. second, the issue of lack of long - term finance, an issue a few months ago has been resolved today with the announcement by barclays bank to