Bank of Zambia Unveils Comprehensive Plan to Strengthen Financial Integrity and Transparency
In a proactive move to fortify financial integrity and enhance transparency in international financial transactions, the Bank of Zambia has laid out a comprehensive roadmap. This initiative encompasses a range of measures, each designed to ensure the robustness of the country’s financial landscape.
In a Monetary Policy Highlights presented by the Deputy Governor of Operations, Mr Francis Chipimo, the Bank aims to reduce inflation to the 6-8 percent medium-term target band, ensuring price stability that fosters economic growth. International reserves are to be maintained above 3 months of import cover, strengthening the nation’s fiscal security.
The operationalization of the Financial Stability Committee will be a key component of Zambia’s commitment to financial robustness. The Banking and Financial Services Act of 2017 is set to undergo a comprehensive review, aligning it with evolving financial realities.
Zambia will adhere to a flexible exchange rate regime to navigate the volatile waters of international finance. A Credit Guarantee Scheme will be rolled out, facilitating Small and Medium-sized Enterprises’ access to affordable finance, a significant boost for economic growth.
Zambia is set to implement the Export Proceeds Tracking Framework on January 1, 2024. This framework mandates that all export earnings must be reflected in an account at a bank within Zambia, allowing exporters control over fund usage, as long as they comply with Anti-Money Laundering, Combating the Financing of Terrorism, and Countering Proliferation Financing obligations.
This comprehensive approach is expected to yield numerous advantages, including enhanced transparency in international financial flows and a bolstered financial sector integrity.
Additionally, a detailed database of aggregate statistics will be established, essential for conducting national money laundering and terrorist financing risk assessments, as required by the Financial Action Task Force.
The Bank of Zambia has kickstarted consultations with stakeholders, ensuring that the implementation of these critical measures proceeds smoothly. By linking the e-BoP Monitoring System with the ASYCUDA WORLD system of the Zambia Revenue Authority, the Bank will further strengthen the validation of export information.
To ensure widespread compliance, financial institutions have been directed to mandate customers engaged in cross-border transactions to obtain a Taxpayer Identification Number (TPIN) and adhere to the e-BoP Monitoring System reporting requirements.
