
GOVERNMENT has appointed two global rating agencies, Fitch Ratings Limited and Standard and Poors (S&P) to provide an independent and prospective credit opinion on Zambia.
The Fitch Ratings and S&P are widely recognised by investors, issuers, and bankers for their credible, transparent and timely coverage.
Fitch Ratings is headquartered in New York and London and is part of the Fitch Group while S&P is a United States of America based institution.
Bank of Zambia (BoZ) Governor Caleb Fundanga in an interview said J P Morgan is still on board as the transaction advisers.
“We are waiting for the rating agencies to do their jobs. The process is being driven by the Ministry of Finance and National Planning,” he said.
Dr Fundanga said the economic fundamentals are now in place with reduced inflation and high gross domestic product growth.
He said Zambia is one of the countries that were adversely affected by the global financial crisis and has managed to recover quickly while other nations have not.
[pullquote]“The time is now for Zambia to be rated. The economy generally is diversifying; tourism is growing and construction is also growing. The only sector where more needs to be done is manufacturing,” he said.[/pullquote]
He said Zambia’s recovery from the global crisis was fast, adding that the price of copper is now at its highest with the country also having the highest food harvest.
“The time is now for Zambia to be rated. The economy generally is diversifying; tourism is growing and construction is also growing. The only sector where more needs to be done is manufacturing,” he said.
Dr Fundanga also pointed out that there is a lot of interest from portfolio investors in Government securities.
He said the global investors who were shunning the country during the global financial crisis are now coming back.
Meanwhile, the central bank is working towards the introduction of inflation targeting framework.
Dr Fundanga said there are a lot of things that need to be done such as improving research capacity, adding that when the monetary policy committee meets, it will need to have well researched data on which to base decisions.
He said BoZ already has a research division, which is looking at what is needed for Zambia to migrate towards inflation targeting framework.
“It requires a lot of work. Even appointing people to be in the committee, we need to choose people that are well informed that can understand the complicated formulas and other things the researchers will be providing,” he said.
BoZ has been working on the matter for a long time in co-operation with the Bank of England officials who have been visiting Zambia from time to time to hold workshops.
[Zambia Daily Mail]