BOZ’S INCREASE IN MONETARY POLICY RATE IS DETRIMENTAL TO ZAMBIA’S AILING ECONOMY – BANDA
… President HH should focus on revamping the mining sector
Lusaka.. Thursday February 15, 2024 (SMART EAGLES)
The increase in Monetary Policy Rate from 11.0% to 12.5% by the Bank of Zambia, is detrimental to our domestic economy, Advocates for National Development and Democracy (ANDD) Executive Director Samuel Banda has observed.
Mr Banda has emphasized that this development will further raise the cost of doing business which is already very high, toxic and suffocating the small business enterprises, the general economic and business environment.
He says this will undoubtedly lead to Banks and financial lending institutions to increase interest rates on their financial business and personal loans which will discourage business entities especially SME’s to acquire financial services to expand their business portfolios.
“Equally Zambians especially the youths with an interest in starting businesses will be discouraged from getting financial capital to start businesses because of the high cost of accessing financial capital from banks. With this increase in the Monetary Policy Rate and poor exchange rate, the cost of doing business and living will continue increasing,” he said.
“Our domestic economy will continue shrinking because there will be fewer economic activities, low liquidity, and low trade and commerce. The Government tax revenue base will also reduce as a result of businesses shutting down, and reduced trade and commerce due to this toxic high cost of doing business.”
The ANDD Executive Director reminded President Hakainde Hichilema that Zambians voted for him to reduce the cost of doing business, and living and improve their living standards.
“We therefore appeal to President Hakainde Hichilema in the interest of many Zambians, to start implementing sound economic policies that will reduce the cost of doing business and improve the living standards of Zambians. In this regard as Advocates For National Development and Democracy (ANDD) our recommendation is that: Reduce the Monetary Policy Rate to 6.0% to increase financial capital accessibility by majority Zambians especially the youths to venture into business entrepreneurship and agriculture projects. Wef note that majority Zambians have the aspirations to venture into farming and business but lack capital. By increasing financial accessibility will encourage more Zambians to get into entrepreneurship and contribute to our social economic development through creating of employment and contributing to our national treasury through paying of tax,” he recommended.
“Increase Copper production output and increase export volumes to generate huge Forex to stabilize our national exchange rate to begin to trade at a fair rate against the major convertible currency the USD. Copper has always been our primary source of Forex as it accounts for 90% of our Forex.”
Mr Banda said President Hichilema can increase copper production output and increase export volumes by ensuring that the largest strategic mines Konkola Copper Mine and Mopani Mines start operating optimally, effectively and efficiently.
“We expedite the Vedanta KCM transition process, and withdraw the provisional liquidator at KCM so that the investor Vedanta Resources can start operating the mining firm optimally, increase copper production output and create the much-needed employment and business opportunities for Zambians,” he added.
“Mopani mines should equally start operating optimally to expeditiously increase copper production output
and increase export volumes to generate the much-needed Forex to arrest the brutal depreciation of the kwacha. ANDD just like many stakeholders, contractors, suppliers and Zambians at large would like to see KCM, MOPANI AND KANSESELI GOLD mines start operating optimally within the first quarter of 2024.”
“Subsidize fuel using mining-generated income to reduce the cost of producing goods and services. Reducing fuel prices will help your government reduce the cost of doing business, which will consequently promote commerce and trade in our country and facilitate the reduction in prices of basic commodities,” he further recommended.
“Zambia will not economically be developed by IMF or Foreign entities but by your Government with the help of Zambians, so we urge you to implement policies that will serve the interest of Zambians, restore social economic growth and develop our country.”