Maravi

BoZ projects $1bn revenue from non-traditional exports

BoZ projects $1bn revenue from non-traditional exports
By Mutale Kapekele
Tue 09 Nov. 2010, 04:01 CAT

File: Central bank governor Dr Caleb Fundanga
THE Bank of Zambia (BoZ) has projected a record US$1 billion revenue from non-traditional exports by the end of this year.

Non-traditional exports include all goods that are outside the sugar, copper and metals sectors.

And the private sector has recorded foreign debt of US $2 billion surpassing the government by US$ 500 million.

Addressing the press at the BoZ quarterly briefing, bank governor Dr Caleb Fundanga announced that non-traditional exports recorded a 13 per cent increase in the third quarter as compared to the previous quarter.

“Non-traditional exports increased by 13 percent, which amounts to US$338 million and we could hit US$1 billion by the end of the year,” Dr Fundanga said. “In the past this was usually US$50 million for the whole year. I would like to take this opportunity to challenge all Zambians to export. You can export anything. If you go abroad, you will find everything from impwa to inswa in Korean shops. We could also do the same. Exports’ success should not be limited to high-tech goods only.”

On the developments in the financial sector, Dr Fundanga said the overall financial condition of the sector for the quarter ended September 2010 was satisfactory.

“On aggregate, the banking sector was adequately capitalized and the liquidity levels remained high. The sector’s profit after tax also improved, although the asset quality modestly deteriorated,” he said. “The overall condition of non-Bank financial institutions (NBFI) sector was rated fair during the quarter under review. The sector was adequately capitalized with fair asset quality while earnings and liquidity performance were also rated fair. However, the leasing subsector reported regulatory capital deficiencies.”

He said according to the latest FinScope Survey, agricultural activities still remained a major source of income for most Zambians “yet the sector was largely financially underserved.”

He said overall, there was marginal increase of 3.6 per cent points in financial access to 37.3 per cent in 2009 from 33.7 per cent in 2005.

Dr Fundanga also announced that Zambia’s overall Balance of Payment (BoP) recorded a surplus of US $357.6 million during the third quarter of 2010 compared to a deficit of US $94.3 million in the previous quarter.

“This was driven by the improvement in the performance of both the current account and the capital and financial account balances,” he said. “The current account surplus increased to US$453.6 million from a surplus of US$92.8 million recorded the previous quarter, reflecting an increase in the merchandise trade surplus coupled with the narrowing of the services and income accounts deficits. Supporting the current account was the merchandise trade surplus which rose by 74.8 per cent to US$897.2 million in the third quarter following an increase in exports as well as a decline in imports.”

He also said gross international reserves were expected to rise to about 4.3 months of import cover by the end of 2010.

“This is not enough because SADC requires that it grows to six months,” Dr Fundanga said. “Some countries in the region have even gone up to 120 months of import cover. We need to do more to increase our cover.”

He also disclosed that the total disbursed poverty reduction budget support (PRBS) in the third quarter was US$19.5 million from the World Bank with another US$150 million mining tax revenue received while the BoZ foreign exchange purchases from the market amounted to US$70 million.

Dr Fundanga also expressed optimism that inflation would remain low in the fourth quarter, below the target of eight per cent at year end.

“This is on account of expected stability in maize prices in view of the bumper harvest in 2010, favorable supply of vegetables and fresh fish and relative stability of the exchange rate of the kwacha against the US dollar for much of the fourth quarter,” he said.

On the country’s debt, Dr Fundanga said the private sector had borrowed US$2 billion to finance projects that were mainly mining related while the government owed US $1.5 billion.

He said the government also had domestic debt of K900 trillion which he termed as low.

“Our debt is much lower and now we can build infrastructure and easily borrow because we have the high ability to service debt unlike in the past when we were highly indebted,” said Dr Fundanga.

Labels: BOZ, CALEB FUNDANGA, TAXATION

posted by MrK @ 7:52 AM