As many of you maybe aware, at independence in 1964, Zambia had one of the most vibrant economies in Sub-Saharan Africa, which was supported by a strong mining industry. The country’s external position was in surplus between 1964 and 1974; inflation rates were low, averaging 7.7 percent; and experienced high economic growth rates. In addition, GDP per capita was one of the highest in Sub-Saharan Africa at about $ 950. Further, unemployment levels were low. Between 1968 and 1972, Government announced sweeping economic reforms under which 80 percent of industry was nationalised, giving the state greater control over the country’s resources, with which it could implement an ambitious industrialisation programme to bring about rapid economic development. In addition, nationalisation was aimed at empowering Zambians economically, which was important following political independence. However, following the outbreak of the 1973/74 international oil price shock and the world economic recession that ensued, Zambia experienced a significant change in her economic fortunes. For instance, the external position deteriorated; inflation increased; per capita GDP fell; the performance of the mining sector, which accounted for over 80 percent of total export earnings declined; and Government capacity to finance economic and social infrastructure was severely curtailed. As a result of these budgetary difficulties, Government began to run huge fiscal deficits, which were financed, primarily, by borrowing from the domestic banking system and the international financial markets.
It also guarantees the proper monetary support for the economy under this stage of development. In the future, the Bank of Albania remains willing to operate in line with the actual and expected performance of the economic indicators and in accordance with its principal objective. 4  BIS Review 11/2010