Today's Business News

Tue, 04 Apr 2017 11:01:05 +0000

Quality banking enhances competitiveness – Mutati

By BUUMBA CHIMBULU

THE presence of well-established banks in Zambia’s financial market enhances competitiveness and positions the country as one of the most attractive investment destinations in Africa, says Minister of Finance Felix Mutati.

Mr. Mutati said Government was pleased that the banking sector in Zambia recognised and appreciated the country’s huge investment potential.

“The Government is committed to promote sound economic policies and invest in infrastructure to attract foreign investment into key sectors of our economy.

“The presence of well-established banks in the market, such as Standard Chartered, serves to enhance our competitiveness and positions us as one of the most attractive investment destinations in Africa,” he said.

The minister was speaking at a Standard Chartered cocktail reception when it welcomed its new chief executive officer and hosted for its key clients in Lusaka.

Mr. Mutati also said Government would soon pass a legislation to allow the use of mobile assets as security to increase options for collateral while easing access to financial services.

Speaking earlier, Standard Chartered managing editor Herman Kasekende said Zambia’s favourable business potential had attracted investors from across the world.

Mr. Kasekende said Zambia was one of Standard Chartered Bank’s fastest-growing markets and that the bank envisaged many business opportunities emerging over the coming years.

He said the bank’s vision was to continue leading the way in the banking sector – driving investment and trade in the economy.

“This is an exciting time to do business in Zambia. There is a lot of excitement amongst investors out there about Zambia’s economic prospects – all eyes are, indeed, on Zambia.

“As a business, we see opportunities in the energy, mining, agriculture and construction sectors, amongst others,” he said.

Mr. Kasekende explained that his bank was keen to support Government’s business and economic agenda to diversify the economy.

And Standard Chartered board chairman, Michael Mundashi, reiterated the bank’s commitment to the Zambian market and pledged to continue providing quality services owing to its 110 years of existence in the country which made it better understand the marketplace.

Mr. Mundashi also pledged the bank’s commitment to working with its clients in helping them grow their businesses and achieve their aspirations.

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StanChart slashes interest rates to 29.5 pc

By BUUMBA CHIMBULU

STANDARD Chartered Bank has reduced interest rates on its borrowing facilities and loans for clients from 32 percent to 29.5 percent following recent changes in the macro-economic environment by the Bank of Zambia (BoZ).

And BoZ has commended the move, saying it expected the market to reciprocate its decision by making access to credit more affordable.

BoZ recently reduced its policy rate to 14 percent from 15.5 percent, and statutory reserve ratio to 15.5 percent from 18 percent.

Standard Chartered Bank chief executive officer, Herman Kasekende, said the reduction of interest rates was a response to recent move by BoZ to reduce the policy rate coupled with a single digit inflation.

“We pride ourselves to have one of the lowest interest rates at the moment. The rates before were at 32 percent. But off course they will continue to come down and even reach 11 percent in due course,” he said.

He was speaking at the official opening of the new Kabulonga branch in Lusaka in a speech read on his behalf by acting chief executive officer, Ngenda Nyambe.

Mr Kasekende also said a key priority for his bank was to provide state-of-the-art digital banking facilities in line with the national agenda to migrate to digital platforms.

Meanwhile, BoZ governor, Denny Kalyalya, said the central bank expected affordable credit which should translate into increased economic activities in various sectors of the economy owing to recent developments in the financial market.

“I am delighted to hear that Standard Chartered has already made a move and has reduced its interest rates and so we hope that by doing so credit will be extended to the many sectors of the economy to contribute to the development of Zambia,” he said.

He said this in a speech read on his behalf by BoZ director of bank supervision, Gladys Mposha.

Dr. Kalyalya also cautioned banks against taking advantage of customer’s loyalty because they were key stakeholders in the business of the bank.

He said improved product and service delivery was a bank’s expression of appreciation for the customers’ business.

“The Bank of Zambia attaches great importance to initiatives by banks that enhance service delivery to the public which in a way minimises incidences of customers dissatisfaction with the services obtained from the bank.

“This will stimulate customer loyalty which positively impacts on the image of the bank and financial system as a whole,” he said.

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Banks tighten rules on cheques to promote e-payment

By BUUMBA CHIMBULU

THE revision of limits on cheques and transfers is meant to promote usage of electronic payment method in the country, the Bank of Zambia (BoZ) has clarified.

And the BoZ has emphasised that issuing a cheque on insufficiently funded account is a criminal offence which attracts stiffer penalties, including imprisonment.

The BoZ was clarifying concerns raised by some businesses following information from commercial banks on charges which will be attracted for breaching the revision of limits on cheques and transfers by the central bank.

Responding to a press query, BoZ explained that the new measures which would come into effect on 5th July 2017 were aimed at further modernising the payment systems which had been in existence since 2008 when the central bank embarked on reforms to renovate them.

BoZ head of communications, Kanguya Mayondi, explained that the BoZ on 14th October 2016 issues CB Circular 6/2016 on the revision of the Item Limits on cheques and electronic funds transfer which repealed CB Circular no.03/2008 issues in February on the subject.

“It should be noted that Item Value Limits on cheques and electronic funds transfer are not new in Zambia, they have been in existence since 2008 when the central bank and the industry embarked on reforms to modernise payment systems in Zambia,” he said.

Mr Mayondi said electronic payment methods were advantageous over paper-based payment instruments and would help Zambia address major risks relating to fraud, security and issues concerning counterfeiting, among others.

He said the BoZ had actively engaged and consulted commercial banks, Bankers Association of Zambia (BAZ) and other stakeholders to ensure the success of the instrument.

Mr Mayondi said the bank planned to carry out a countrywide sensitization campaign aimed at educating the public on the new instrument.

“The Bank of Zambia wishes to advise that commercial banks and stakeholders in the financial sector are in the process of sensitizing their clients about the revisions to the Item Value Limits on cheques and electronic funds,” he said.

And the BoZ said there were charges on bounced cheques as spelt out in Government Gazette Notice 190 of 2010.

Mr Mayondi said issuing a cheque on insufficiently funded account was a criminal offence which attracted stiffer penalties, including imprisonment.

He explained that penalties for bounced cheques were K510 for individual customers and K840 for corporate customers.

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Local contractors urged to partner with Chinese

By MAILESI BANDA

ZAMBIAN construction companies usually have challenges in the tendering process for the construction of roads and other infrastructure, hence the need for them to partner with the Chinese to help in the growth of the sector, Zambia Chinese association president Zhang Jian has said.

Mr Zhang said the Zambian construction industry was faced with the challenge of pricing as contractors usually found themselves either over-pricing or under-pricing in their tenders.

Speaking in an interview with the Daily Nation, he said the pricing affected the quality of the construction sector and standards of the construction they delivered.

“Zambian constructors have a challenge in tenders, sometimes they price too high and sometimes too low and hence there was need for them to be knowledgeable on the costs of construction,’’ he said.

He said only with knowledge on how much it cost to construct particular building could the local contractors win tenders and be able to deliver quality infrastructure.

He advised that the local construction sector should work with the Chinese who have knowledge in construction and this could develop the sector as it would contribute to the growth of the economy.

He said proper management of resources was also important in the development of the construction sector.

He said Zambia had opportunities for the growth of the construction industry, adding that it could be a big source of employment and economic growth.

He said with proper investment and a dedicated workforce the construction industry in the next four years could have about 50 percent of construction being done by local companies.

He called for more Zambian companies to train and contribute to the construction industry’s growth.

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Private sector drives economy, says envoy

BY MAILESI BANDA

THERE is a good platform for the private sector to thrive in Zambia due to the policies and the business environment created by the Government, German ambassador to Zambia, Achim Burkart, has said.

The ambassador said the private sector was the driving force of every economy, adding that Zambia was not an exception. He said a conducive environment for the growth of the private sector was a direct benefit on the growth of the economy.

“The private sector drives the growth of most economies in the world and while on the one hand they increase economic growth by investing in the economy they benefited through the profits they made,’’ he said.

Mr Burkart said the Zambian business environment was favorable for the growth of the private sector, adding that the Government could still do more to attract more investments from the private sector.

“There is need for more efforts to give the private sector a thriving ground for it to succeed and yield economic benefits for Zambia’s economy,’’ he said.

He said the private sector was responsible for the growth of the economy as they benefited from progress made in the economy of the country.