Advocates Criticize BOZ’s Monetary Policy Rate Hike as Detrimental to Zambia’s Economy

The Advocates for National Development and Democracy (ANDD) Executive Director, Samuel Banda, has expressed concern over the Bank of Zambia’s decision to increase the Monetary Policy Rate from 11.0% to 12.5%. 

Mr. Banda observes that this move could have detrimental effects on Zambia’s domestic economy, particularly on small businesses and the general economic environment.

He emphasizes that the increase in the Monetary Policy Rate will lead to a rise in the cost of doing business, which is already burdensome for small enterprises. 

This, in turn, may discourage businesses from acquiring financial services to expand their operations, while also deterring individuals, especially youths, from starting new ventures due to the high cost of accessing financial capital.

Furthermore, Mr. Banda warns that the high cost of doing business and living could result in a shrinking domestic economy, with reduced economic activities, liquidity, and trade. 

He predicts that this could lead to business closures, reduced tax revenue for the government, and overall economic stagnation.

In light of these concerns, Mr. Banda urges President Hakainde Hichilema to implement sound economic policies aimed at reducing the cost of doing business and improving the living standards of Zambians. 

He recommends reducing the Monetary Policy Rate to 6.0% to enhance financial accessibility, especially for youths interested in entrepreneurship and agriculture projects.

Additionally, Mr. Banda suggests increasing copper production output and export volumes to stabilize the national exchange rate. He emphasizes the importance of ensuring optimal operations at strategic mines such as Konkola Copper Mine and Mopani Mines to achieve this goal.

Moreover, he recommends subsidizing fuel using income generated from mining activities to reduce the cost of producing goods and services, thereby promoting commerce and trade within the country.

In conclusion, Mr. Banda emphasizes the need for President Hichilema’s government to prioritize policies that serve the interests of Zambians and promote social-economic growth and development within the country, rather than relying on external entities for economic development.