Zambia to reduce borrowing from banking sector

Dec 23, 2009

In an attempt to encourage financial institutions to increase lending activity, the Zambian government has decided to reduce borrowing from the banking sector next year - according to Reuters.

In an attempt to encourage financial institutions to increase lending activity, the Zambian government has decided to reduce borrowing from the banking sector next year - according to Reuters.

The news organisation reported that Zambia currently borrows about 620 billion kwacha in bonds and treasury bills per month - and there is a need for the country to bring down interest rates.

In a statement, the nation's Presidential Affairs Minister Ronald Mukuma said: "The government will retire a substantial amount of maturing bonds and treasury bills next year. This, I hope will enable commercial banks to lend to the private sector."

Furthermore, he went on to reveal that a single treasury channel will be established in 2010 – which will result in some state accounts in commercial banking coming to an end.

Previously, Sambwa Gabriel Chifwambwa wrote an article in the Post and suggested that the Bank of Zambia should have more powers to reduce the cost of lending.