Compel banks to reduce interest rates – ZFE

BOZ building.

ZAMBIA Federation o f Employers (ZFE) has implored Government and the Bank of Zambia (BoZ) to put in place effective measures that will compel commercial banks to reduce interest rates.
ZFE executive director Harrington Chibanda said current statistics on the cost of borrowing, which are almost averaging 40 percent, are hurting private sector growth.
“The cost of doing business in Zambia should be at manageable levels to promote entrepreneurship and private sector growth,”
“It is in this regard that we call upon the authorities to address the current high cost of borrowing, which is near 40 percent from the commercial banks, the high rate of inflation, severe load shedding and exchange rate,” Mr Chibanda said during the Labour Day commemoration last week.
He said the challenges stipulated are making it difficult for the private sector companies to thrive and generate returns to adequately repay the loans.
“This has also great potential for high degree of loan defaults, which poses a sharp risk to operations of the banking sector and the national economy,” Mr Chibanda said.
He called for favourable legislative framework that should target the development of the private sector and creation of sustainable employment.
Mr Chibanda said pro-poor growth requires high employment, intensity of growth and a rise in productivity which also depends on institutions, policies, laws and practices which positively affect the functioning of the labour market in the country.
He said the tripartite partnership comprising Government, the labour movement and the federation of employers should strive for the attainment of the national labour organisation decent work agenda, which member states, including Zambia, have adopted.
The agenda focuses on economic growth, with equity through a coherent blend of social and economic goals.

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