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…reports of intelligence wings monitoring cash flow cause anxiety


THE high demand for cash has been amplified by the announcements that various government intelligence wings are monitoring movements of cash as the situation brings anxiety in an economy dominated by a huge informal sector and a black market, the Economic Association of Zambia has said.

EAZ president Lubinda Haabazoka said Zambia had a huge presence of cross border traders with markets at Kasumbalesa which are very developed and result in cautious behaviour from such traders when the narrative was that of tightening economic intelligence.

Dr Haabazoka said this was normal behaviour because businesses and households prefer to concentrate their savings in offshore banking zones as opposed to countries with conventional banking centres.

“It is expected that as the country settles under the new administration money will once more move from mattresses into the banking centre,” he said in an interview.

And Dr Haabazoka said the shortage of cash in the banking system apart from traders buying maize produce as announced by the Bank of Zambia could also be attributed to the just ended elections in the country.

He said the shortage of cash was also experienced after the 2011 elections.

Dr Haabazoka said during elections, majority of investors operating in a particular country always had a wait and see attitude to cushion themselves against political risks.

Immediately after elections, he explained in an interview, investors normally brought back their monies and play ball provided there was no political violence.

“But what is so peculiar about this year is that there has been a change of government and in a global economy where capital is highly mobile, businesses and households will wait to put back their resources until the new administration settles and becomes predictable,” Dr Haabazoka said.

According to Dr Haabazoka, it was expected that as the country settled under the new administration, money would once more move from mattresses into the banking centre.

He therefore urged the Bank of Zambia to provide enough liquidity to continue facilitating business operations in the country.

“It is also advised that our economic intelligence units operate quietly to prevent anxiety among various market participants especially from players in the informal sector and investors that want a quiet business operating environment.

“Business is also advised that Zambia is a country of laws and therefore there is no need to panic but continue to operate normally provided Caesar receives what belongs to him,” Dr Haabazoka said.

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