ANDD OPPOSES BOZ POLICY MONETARY RATE INCREASE
..says small businesses will find it difficult to expand their businesses
Thursday…November 25 2021 (Smart Eagles)
The increase of the policy monitary rate by 50 basis points to 9.0% will impact negatively on the country’s economy, Advocates for National Democracy and Development (ANDD) has observed.
The Bank of Zambia announced yesterday that the Monetary Policy Committee (MPC) at its November meeting decided to raise the Monetary Policy Rate ( MPR) by 50 basis points to 9.0 percent.
Bank of Zambia Governor Dr Denny Kalyalya said the decision was arrived at in a quest to help steer inflation to single digits in 2022 and to maintain it within the 6-8 percent target range by mid 2023 as staled in the 2022 budget address.
But ANDD executive director Samuel Banda has observed that the move is not only ill-timed but goes against the hopes and desires of small medium entrepreneurs who are already struggling to survive.
“Small businesses will find it difficult to expand their businesses because they will be afraid to aquire loans for business expansion due to high interest lending rates” Mr Banda has further observed.
He says some youths who are interested in doing business will not have access to business loans due to high lending business rates adding that this will lead to a rise in unemployment levels among the youths.
He has further forseen that banks, especially micro lending institutions will lose out business because very few business entities and individuals will have interest in aquiring loans for business expansion.
“In the interest of growing the economy, through the provision of access to financial capital for business expansion, trade financing or business start up , we as Advocates for National Development are appealing to the UPND administration to reduce the monitary policy rate” he said with a reminder to remind President Hakainde Hichilema that he promised the Zambian people that he will reduce the cost of doing business and that he will ensure he provides business opportunities for the youths.
Mr Banda has however wondered how President Hichilema intends to reduce the cost of doing business when he is implementing policies that will make it difficult for the business community to access loans at fair interest rates.
“We believe one of the effective ways to reduce the cost of doing business is to increase access to financial capital.We must mention that the majority of the youths have brilliant and innovative business ideas but lack access to funding, hence it is imperative that the UPND administration strives to reduce the lending rate to ease access to funding” he said.
Mr Banda notes that the country must invest quality time to learn from China and Singapore, who have grown their economy through implementing business initiatives and investments that empower their citizens through easy access to funding at a low lending rates.