ESTHER MSETEKA, Lusaka
A DECREASE in interest rates and single-digit inflation is expected to spur Zambia’s economic growth going forward, Izwe Loans Zambia Limited managing director Brian Malambo has said.
Currently, inflation is at 6.6 percent while interest rates are hovering around 25 percent and 38 percent.
Mr Malambo said the prevailing macro-economic fundamentals will positively contribute to the country’s second half year fiscal outlook and beyond.
He said this in the company’s unaudited financial results for the six months ended June 30, 2017.
“The economic environment in Zambia is expected to remain buoyant in 2017 with the possibility of further decreases in interest rates and inflation remaining under control.
“The positive impact from government policies filtering through to the corporate sector has augmented a prosperous first half of the year for the company,” Mr Malambo said.
He also said the current high commodities with particular reference to copper, large planned infrastructure projects and significant direct investment inflows all point to an optimistic second half of the year.
Copper price on the London Metal Exchange is trading around US$6,400 a tonne.
During the period under review, he said the progressive improvements in interest rates and pricing of hedging government instruments, have also afforded Izwe an opportunity to reduce its pricing to customers across the board.
Mr Malambo said the country’s financial markets experienced reduced currency volatility and single-digit inflation, with the interest rate on the government 91-day treasury bill reducing by 800 basis points to 11.75 over the period under review.
“The Bank of Zambia policies succeeded in providing a stable and expansionary environment during the first half of 2017, favouring the overall business environment and enhancing investor confidence,” he said.
Mr Malambo said in the first half of the year, Izwe posted a profit after tax of about K38.8 million in the first half of this year compared to about K16.7 million recorded in the same period last year, representing 132 percent increase.
He said the positive results are evidence of a well-managed business model, implemented by a highly-skilled management team.