Minister of Finance Felix Mutati has raised concerns over the high loan default rate at the Development Bank of Zambia(DBZ). Mr Mutati said that money being disbursed by DBZ to Small and Medium Enterprises must be paid back.
Speaking in Lusaka after signing a Financing Agreement with the African Development Bank (ADB) to be disbursed by DBZ, Mr. Mutati said government will not manage any funds because people think the cash is their entitlement. He has called on the private sector to access the money and use it to grow the economy.
The Minister said government is now working on tightening levels of dispatch because some clients do not use the funds on approved projects. He has also revealed that government has in the last four weeks secured $ 237 million investments from the ADB.
Mr. Mutati said that the money includes the $ 50 million funds for aqua culture to develop the sector and reduce on importation of fish especially that Zambia is home to 40 percent of the waters in Southern Africa.
The Minister also signed a $ 1.7 million Education for Sustainable Development in Mineral Resource Management for Capacity Building in Mineral Resource at the University of Zambia.
And ADB Country Representative Damoni Kitabire said the DBZ financing facility will have a 10 year lifeline. Mr. Kitabire said his institution is aware of challenges faced by SMEs in accessing finance, even though they contribute 90 percent of jobs for the working population.
Meanwhile, Minister of Finance Felix Mutati has said that the economy has started showing signs of recovery following various interventions government has put in place. Mr Mutati noted that the local currency has stabilised while the inflation rate is on a downward trend.
Mr Mutati further said that the enhanced flow of Foreign Direct Investments-FDI- was another key indicator that the recovery plan is bearing fruit. The Minister was addressing a Private Sector and GRZ Consultative Seminar on the Economic Stabilisation and Growth Program in Lusaka.
Mr. Mutati disclosed that government is taking a situational analysis on parastatals that are draining the treasury.
And Mr. Mutati said has said that government will continue dealing with debts and increase revenue with or without the IMF coming on board. The Minister has however advised Zambians not to be scared of the IMF because key reforms such as the removal of subsidies and introduction of cost reflective tariffs for fuel have been made.
Meanwhile, Zambia Revenue Authority -ZRA- Commissioner General Kingsley Chanda said the authority has extended the deadline for complying with the new law for all account holders to have TPINs from 31st March to December 31st.
Mr Chanda said the decision was arrived at by a technical committee formed with the Bank of Zambia which decided to give banks ample time to change machines and upgrade their date.