Q FM Africa's Modern Radio
Advocates for National Democracy and development ANDD has expressed concern that the increase of the policy monetary rate by 50 basis points to 9.0% will impact negatively on the country’s economy.
The bank of Zambia announced yesterday that the monetary policy committee (MPC) at its November meeting decided to raise the monetary policy rate (MPR) by 50 basis points to 9.0 percent.
Bank of Zambia governor Dr Denny Kalyalya said the decision was arrived at in a quest to help steer inflation to single digits in 2022 and to maintain it within the 6-8 percent target range by mid-2023 as staled in the 2022 budget address.
But ANDD Executive Director Samuel Banda has observed that the move is not only ill-timed but goes against the hopes and desires of small medium entrepreneurs who are already struggling to survive.
Mr. Banda says small businesses will find it difficult to expand their businesses because they will be afraid to acquire loans for business expansion due to high interest lending ratessome youths who are interested in doing business will not have access to business loans due to high lending business rates adding that this will lead to a rise in unemployment levels among the youths.
He has further foreseen that banks, especially micro lending institutions will lose out business because very few business entities and individuals will have interest in acquiring loans for business expansion adding that in the interest of growing the economy, through the provision of access to financial capital for business expansion, trade financing or business start-up, the UPND administration should reduce the monetary policy rate.
Mr. Banda reminds president Hakainde Hichilema that he promised the Zambian people that he will reduce the cost of doing business and that he will ensure he provides business opportunities for the youth but wondered how president Hichilema intends to reduce the cost of doing business when he is implementing policies that will make it difficult for the business community to access loans at fair interest rates.