President Edgar Lungu has said that his Government is concerned with failure by Commercial Banks to significantly reduce interest rates despite the Central Bank having lowered monetary policy lending rates to trigger the Banks to support Government initiatives.
Speaking today when he met Standard Chartered Bank Group Chief Executive Officer Bill Winters, in the company of Finance Minister Felix Mutati, Deputy Secretary to Cabinet Christopher Mvunga and Special Assistant to the President (Press and Public Relations) Amos Chanda, the president said that it was sad that his Government has not seen a significant interest rate reduction by Commercial Banks to support Government initiatives.
“Sadly we have not seen a significant interest rate reduction by Commercial Banks to support Government initiatives, which is a source of concern. The high interest rates charged by Commercial Banks have also resulted in increased non performing loan portifolios in the Banking sector.”
And the President hailed the cordial relations that exist between Standard Chartered Bank and the Zambian Government and that the visit by the institution’s Chief Executive Officer was testimony of this cordial relationship.
The President acknowledged the Bank as a strategic partner with a global reach hence Government is confident that the institution will continue as the country’s goodwill Ambassador in promoting Foreign Direct Investments (FDsI) into Zambia through its diversified clientele base.
“The country’s peace and stable political environment makes Zambia a natural destination for FDIs and this was evident in the ever-increasing pledges.”
The Head of State assured the bank that the country’s economic outlook in the medium to long term remained as positive and noted the recent upgrading of Zambia Credit Rating from negative to stable by Standard and Poor.
“GDP growth target for 2017 has been revised upwards from 3.6 percent to 4.3 percent with further gains anticipated. Inflation has dropped over the last 18 months from the high twenties to 6.3 percent. The Zambian currency has also remained stable.”
The President attributed the country’s good economic outlook to partly to Government’s austerity measures he announced on 26th November 2016.
“We are determined to press on with reforms aimed at fiscal consolidation, removal consumption subsidies and reducing bottlenecks that increase the cost doing business. Concerns about subsidies draining Government coffers have been addressed through cost- reflective tariff implementation on petroleum products and electricity migration from Fertiliser Input Support Programme to E-Voucher.”
The President also assured that negotiations with the International Monetary Fund were on a positive trajectory.
And Chartered Bank Group Chief Executive Officer Bill Winters assured President Lungu that on the occasion of the Standard Chartered’s 100 years of operations in Zambia, it was right and proper that the bank pledges to do more to create greater partnerships with the government and the private sector in Zambia.
“Zambia is a special place for us and we are to stay. We have been here a 100 years and we appreciate greatly what we have achieved in Zambia” Mr. Winters said when he led the bank’s delegation to pay a courtesy call on the President at State House on Tuesday evening.
“We will address Your Excellency’s concern that we are not doing enough to lend to agriculture. There is a way we can help to attract capital to help commercialise the agriculture sector in Zambia as we have done in Nigeria where we mobilised investors from Japan.
During the same meeting Standard Chartered Zambia Chief Executive Herman Kasekende announced that the bank will build its new head office at a new location near Addis Ababa Roundabout.
Others who accompanied the Group CEO are Standard Chartered Zambia chairman Mr. Michael Mundashi, Standard Chartered Regional CEO for Africa and Middle East Mr. Sunil Kaushal and Mr. J. Kweku Bedu-Addo, the CEO for Southern Africa.