Monday, June 17, 2024

Zambia’s Finance Minister highlights access to finance as the biggest obstacle to business growth in the country

Share

Finance Minister Dr Situmbeko Musokotwane has said the government is aware of the challenges that local businesses and entrepreneurs are facing in accessing finance to grow their businesses.

During the launch of the new head office and new Longacres branch of Zambia Industrial Commercial Bank, Dr. Musokotwane said the number one obstacle to the growth of businesses in Zambia is access to finance.

He said the government want to see enhanced growth and increased productivity of local businesses because it is the most sustainable way to create wealth and alleviate poverty among the people.

“We are all here as witnesses to a budding Zambian story – a young locally-owned commercial bank is holding out a promise for the Zambian entrepreneurs and the local business community. The bank has been created with a mandate to specifically support the local businesses to grow into major commercial and industrial enterprises for the purpose of creating jobs for our youths and local wealth for economic development. Distinguished ladies and gentlemen as government, we have heard, and we are aware of the challenges that local businesses and entrepreneurs are facing in accessing finance to grow their businesses. According to the world bank’s 2019 enterprise survey, the number one obstacle to the growth of businesses in Zambia is access to finance (31 percent of firms that participated in the survey listed it as their biggest obstacle. This compares to 23% of firms in sub-sahara africa). 4 the report further shows that, in Zambia, only 10.1 percent of firms have a bank loan, compared to an average of 20.4 percent across sub-saharan africa. For sme’s, the number of firms that have a bank loan is even lower at 6.3% due to the presence of structural constraints, including firm informality, and high collateral requirements,” Dr. Musokotwane said in a speech read on his behalf by Labour Minister Brenda Tambatamba.

“These challenges, among others, have been cited by our sme’s as the major reasons for their low participation in our economic activities. Ladies and gentlemen, as government, we want to see enhanced growth and increased productivity of local businesses because it is the most sustainable way to create wealth and alleviate poverty among our people. We therefore need structured financial solutions and platforms to be deliberately created for the primary purpose of stimulating the growth of our smes and local businesses. i have been informed that the mandate of the Zambia industrial commercial bank (zicb) is to find solutions to the challenges being faced by Zambian businesses, particularly those in the sme sector. 5 I therefore take this opportunity to commend the shareholders of zicb for actualising their noble idea of forming a bank that would spearhead the commercialisation and industrialisation of Zambian businesses through the provision of business-friendly financial solutions. I have also been informed that the majority shareholder of zicb with a shareholding of 64.3% is the national pension scheme authority (napsa), whose investment in the bank is held through a special purpose vehicle (spv). The other government entities with a stake in the bank are the industrial development corporation (idc) at 30.2% and the workers compensation fund control board (wcfcb) at 4.7%,” he said.

Dr. Musokotwane further hailed the operation of the Zambia Industrial Commercial Bank.

“As such, our expectation, as government, is that zicb should open a new chapter in the banking sector in Zambia for the benefit of our people by having a deliberate focus on local businesses. With that said, we can look to the future with great hope and belief that zambian business houses and entrepreneurs have a bank they can definitively call their own. I have noted that the bank has been posting profits for the last two financial years. Let me take this opportunity to echo my message to all other state-owned enterprises (soes) regarding financial performance. I have said before and I am saying again that days of bailing out poor performing or loss-making soes are long gone. Our focus as the government is on stabilising the economic fundamentals of our country and delivering on our promise of a better standard of living for our people. Ladies and gentlemen allow me therefore to conclude with a commendation to the board, management and staff of zicb for driving the bank into profit since the third year of its operation. I the number one obstacle to the growth of businesses in Zambia is access to finance” Dr. Musokotwane said.

10 COMMENTS

  1. I feel sorry for you Sir. You were very upbeat about your budget and bright prospects of clinching a deal with IMF. The performance of the Kwacha has also dissapointed despite all the effort to prop it up. You tried exporting power but it brought back load shedding. So you stopped. Rightly you thoght exporting maize will bring in dollars to prop the Kwacha.This has lementably failed as it has created serious maize shortages. Now you want to import the same maize you exported.. And this will definately dent your efforts to prop the Kwacha. Kamala left a paltry $16m but what i$16m ? I feel for you Sir and I dont envy your job at this moment. Waiting for the next ace up your sleeve.

  2. Where’s the genius gone. Dr Musokotwane we are suffering. No mealie meal and when we find it it’s too expensive.
    This year instead doing my usual six limas I only did three because of the late delivery of inputs. I see the same scenario in the neighbouring farms. I wish I had kept enough maize instead of selling most of it.
    Dr what have you done?

  3. In opposition everything looked very easy…just as simple as 1-2-3…big mouth Mr Know it all HH is just good at begging…how can a country prioritize “begging”…and jumping up and down when someone offers you aid….typical African mentality …we have more resources and favorable weather conditions than Finland,Denmark,Norway,Sweden etc but we still languishing in poverty

    • The problem lies with the voters, they fall for sweet lies…. privately ask HH why he was telling us he would solve the problems by 14hours after being sworn in.. the answer will be IF I TOLD THE YOU THINK THEY WERE GOING TO VOTE FOR ME?
      Same same with the 90 day miracle by abayashi.

  4. Upnd is a failed project…2026 out.
    By the way Zambians yellow maize is on the way due to fool.s who do not listen or reason.

  5. Upnd is a failed project…2026 out.
    By the way Zambians yellow maize is on the way due to fool.s who do not listen or reason.
    They talk too much

  6. You still havent sued Munir Zulu??Were you demanding K50m from him?Too little. Why dont you try a cool $50m legal action, maybe the kwacha might improve as you wait for our debt to be worked out at Paris Club.

Comments are closed.

Read more

Local News

Discover more from Lusaka Times-Zambia's Leading Online News Site - LusakaTimes.com

Subscribe now to keep reading and get access to the full archive.

Continue reading