By BENNIE MUNDANDO
THERE is an estimated US $5 billion in cash outside the banking Sector the Economics Association of Zambia (EAZ) has revealed.
It has now proposed a two-year amnesty for both Kwacha and forex hoardings to facilitate repatriation back into the banking system without retribution pursued by investigative wings.
EAZ president, Lubinda Haabazoka, has appealed to Government to declare a two-year amnesty so that the economy could benefit from huge amounts of money circulating outside the banking sector.
Dr Haabazoka was speaking in an interview with the Daily Nation yesterday. “There is an estimated US $5 billion in cash outside the banking sector. We need that money to come in so that it can be used to cushion exchange rate volatility. We ask the Ministry of Finance to declare an amnesty.
“As EAZ, we appeal for a two-year strict amnesty where nobody must be pursued for declaring whatever they are keeping at home,” he said.
He also appealed to Zambia to relax requirements for foreigners to open up dollar accounts in the country. He cited the Democratic Republic of Congo as one country which had a lot of money floating in Katanga Province where owners did not deposit in accounts in their country because conditions were not as favourable.
“Because we have been very strict on foreigners opening accounts in Zambia, all the huge sums of money from Congo are banked in South Africa yet they are our neighbours here. These are the people we must be encouraging to come and open dollar accounts in our country.
“The bank of Zambia should also scrap off charges on dollar accounts because we need forex to flow into the banking system. Let these measures be implemented as soon as possible,” he said.
Meanwhile, Dr Haabazoka says the medium term refinancing facility implemented by the Bank of Zambia (BoZ) will enhance liquidity in the economy.
He said the K10 billion pumped into the economy by BoZ was quite substantial and that his association hoped to see businesses access financing to either hedge against risk or scale up operations to replace potential shortages of imports.
“The scaled up one market operations will provide short term liquidity support to commercial banks to ensure that the financial sector remained healthy and that the overall mood to enhance online dealings which are the movement of money from one entity to another.
“By waiving charges from person to person transactions, this will also help the Zambia Revenue Authority (ZRA) to collect revenue. This is because where individuals were transacting in cash and such transactions were declared, the waiver will ensure that people are encouraged to move into the formal banking sector,” Dr Haabazoka said.