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HomeNews$2m UNLOCKED...BANKS UNCHAIN MONEY WITHHELD FROM THE ECONOMY A YEAR AGO

$2m UNLOCKED…BANKS UNCHAIN MONEY WITHHELD FROM THE ECONOMY A YEAR AGO

COMMERCIAL banks have unlocked US$2 million withheld from the economy a year ago due to the national governance uncertainties ahead of the August 2021, general elections.

Meanwhile, the government projects that the country’s external debt will be completely restructured by December, 2022.

Bankers Association of Zambia (BAZ) chairperson Mizinga Melu said following the prevailing macro-economic stability in the country, the banks had started releasing the resources they had withheld before the last elections.

Ms Melu who is ABSA Zambia managing director said that had led to the appreciation of the Kwacha against major convertible currencies.

She said this during a panel discussion at a Mid year National Budget and Economic Performance and the 2023-2025 Medium Term Budget Plan hosted by the Ministry of Finance in Lusaka yesterday.

She said the banks would soon start reducing lending rates as all market fundamentals were looking. Favourable to trigger the move.

“And I think one or two banks has already started doing that, this was a pledge we made earlier and needs to be fulfilled,” Ms Melu said.

Finance and National Planning Minister Situmbeko Musokotwane said the unlocking of the funding by the banks was a sign of local investor confidence in the economy.

Dr Musokotwane said the anticipated $1.4 billion IMF programme, which was in near-sight, was also an indication of foreign investor confidence in the economy.

“The IMF executive board will be sitting this month to consider the report from Zambia’s creditors and we hope that by September, the IMF programme will come through. In as far as debt restructuring is concerned, this should be completed by December this year,” Dr Musokotwane said.

He, however, indicated that the restructuring of the debt did not entail laxity as the country would still have to meet the repayment obligations.

“With the IMF programme, we will be able to attract more investments to create new jobs. Just look at the number of applicants for the census, it shows you that our youths need jobs and Government alone cannot provide all the jobs,” he said.

Acting Secretary to the Treasury Mukuli Chikuba said the country’s medium term economic prospects were positive, with the Gross Domestic Product growth expected to be recorded at four per cent, next year, 4.2 per cent in 2024 and 4.4 per cent in 2025.

Mr Chikuba said inflation was also projected to remain within single-digit margins.

He said over the period, the Government would invest in mechanised agriculture and value addition to the manufacturing sector to enhance sustainable development.

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