Tukiya Kankasa-Mabula: Modernising Zambia’s payment system Remarks by Dr Tukiya Kankasa-Mabula, Deputy Governor Administration of the Bank of Zambia, at the Ecobank Launch of Financial Products, Lusaka, 16 December 2009. *  *  *  • Members of the Ecobank Zambia Limited Board of Directors present; • The Managing Director of Ecobank Zambia Limited, Mrs Charity Lumpa; • Members of the Diplomatic Corps; • Ecobank Zambia Limited Customers; • Management and Staff of Ecobank Zambia Limited; • Members of the Press; • Distinguished Invited Guests; • Ladies and Gentlemen. It is with great joy and gratitude that I stand to address you at this important launch of the “Ecobank Rapid Transfer” and the “Non-Resident African Account”. I am informed that the two products are designed to transfer money faster and in real time while meeting the needs of customers resident in countries other than those where their accounts are domiciled. I am also pleased that these two products are aimed at promoting the efficient transmission of remittances at an affordable cost. Distinguished Ladies and Gentlemen, allow me to briefly highlight the importance of remittances to our economy. Remittances are increasingly growing to be one of the most important sources of finance in Zambia. Such funds are not simply an expression of fondness by people in the diaspora to assist their families in adverse situations. They also represent an important source of finance that augments capital inflows and investments in the economy.
Formal remittance inflows into the country for the three quarters to September 2009 were estimated at K221 billion. This emphasizes the growing significance of globalisation and thus the need to intensify efforts to improve and establish, an environment that could enhance the impact of remittances and their effectiveness on the economy. Furthermore, remittances when compared to other forms of capital inflows, can have a positive impact not only on the volume but also on the quality of investments. People in the diaspora or their relatives are more familiar with the local economic and social environment and therefore can make a better use of the capital brought into the country. Infact, the recent few years has seen a growing number of Zambians who were in diaspora, returning and trying to set up their own small or medium size businesses, bringing in, not just funds, but also a lot of know-how. The downside to remittances is the possibility of the recipients remaining dependant on money transfers. In Zambia remittances are mainly used to secure daily family needs and to improve life style, as well as to construct or reconstruct houses, and to finance family ceremonies like weddings and funerals. Only a small portion goes into banks as savings. However in order to alleviate poverty, it is important that remittances are utilized in an effective manner that will contribute to economic development. It is therefore imperative that some of these funds are channeled into the financial sector and invested in meaningful projects like real estates, manufacturing and agricultural sectors.