President Hakainde Hichilema has emphasised on the need for government to work with the private sector in order to revive the country’s economy.
The President says the economic challenges that the country has faced have been immense and calls for collective duty to find solutions to revive the economy expeditiously.
Speaking when he met a team from the Bankers Association of Zambia (BAZ) at State House in Lusaka today, the Head of State observed that the country has experienced economic difficulties, business challenges coupled with the COVID- 19 pandemic.
The President noted that there is need to also address the pandemic not just from the health point of view but also from the economic point of view as the economic shutdowns that the country has experienced are real.
“We have this discussion with a concept of partnership, the country has gone through great economic difficulties, challenges, business challenges coupled with the coronavirus. Something new to us and we had to grapple with it, how do we deal with it,” he stressed.
The President expressed gratitude that the Bankers Association has shown commitment to working with his administration in revamping the country’s economy.
“We are grateful that the BAZ is alive to the economic challenges the country is facing. We are grateful that you as a sector are involved, the Association is at the top end of the economy so we are grateful for that,” he said.
The Head of State said it is important that all players involved in reviving the economy have a shared objective despite sitting in different offices.
He further emphasised the need to also work with other sectors that are serviced by the financial sector such as mining and agriculture to rebuild the country’s economy.
“So the challenges have been immense as a Country and our duty again is partnership, collective duty is for us to find solutions on how we can bottom up our economy quickly, expeditiously, and I think again partnership comes in handy here,” he noted.
The President said economic revival for obvious reasons, job and business opportunities will allow us to support health and education.
President Hichilema indicated that government appreciates the fact that the financial services sector does appreciate the little efforts that government has made so far being a new administration.
“We are very pleased that some of the initial first step measures that were put in place are being felt by business operators and we want to encourage you that we are going to do more in that direction,” the President stated.
And President Hichilema noted the need for the financial sector to work with government in the successful implementation of the Constituency Development Fund (CDF) to make it possible to derive the intended value.
We found that one of the issues the economy has been bleeding with is extravagance at the Centre so one of our intentions is to take money away from those who live in Lusaka to take it to the people who really own it, I think that’s where some of the small businesses the SMEs reside, in the constituencies,” he noted.
The President said government intends to work on other funding mechanisms to add more components to the CDF instrument.
“Please find ways of supporting this policy so that it works, the idea is to first get the money away from the Centre, to basically get local economies to function,” the President said.
President Hichilema added that the government has further provided guidelines that require for local procurements of goods and services to support the CDF funding.
Meanwhile, Bankers Association of Zambia Chairperson Mzinga Melu assured the President that the Association is part of the economic growth recovery.
Mrs. Melu noted that the last few years have been quite tough for the sector but that at the same time it has been resilient.
She said last year in particular, ended up being one of best years for the sector despite it having a lot of economic hardships.
She stated that in terms of non- performing loans, the loans reduced drastically to the levels of 5.8 percent while as previously they were at 11.8 percent.
“In terms of loans and advances we saw a growth there of 3.1 percent and right now we are standing at K45 billion as a sector. So the banks that you see are representative of the K45 billion that we are able to lend to our clients in particular sectors such as agriculture, as well as manufacturing,” she said.
Ms. Melu added that the Corporate tax contribution for the sector as at last year was at K2.9 billion compared to the previous year which stood at K1 billion.
“So we are seeing that last year was the year where there was a lot of resilience but there were a number of structures which the central bank put in place which were able to support this growth,” she observed.
Ms. Melu further hailed the President for the positive market sentiments in the economy from the time he entered office.
“We want to congratulate you because since you came in power there has been very positive market sentiments in the economy. Before you came in power, we were looking at a lot of difficult issues where a number of our limits both at credit point of view and country risk were actually almost closed, so we were not able to lend at the levels that we would have wanted to or at the levels that our balance sheet commanded just because the investors including our shareholders were very worried about what was happening in the economy,” stated.
And Ms. Melu noted that the Banking Sector is committed to working with the government to implement the CDF policy.
She indicated that there is commitment across the sector to making it easier for themselves to lend to the people on the ground.
“We do know that it’s a challenge for us when it comes to dealing with people on the ground simply because when we talk about these numbers we talk about agriculture, we talk about individuals who are working but here, we are talking about the citizens who might not have the security we may be looking for, who might not have the balance sheet we are looking for, but we do commit,” she said.