Caleb M Fundanga: Future of the Zambian economy – a balanced look Paper presented by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at a discussion sponsored by the LSA Group, Ndola, 30 June 2006. * •  Mr. Chairperson  •  Distinguished Guests  •  Ladies and Gentlemen  *  *  On behalf of the Bank of Zambia and indeed on my own behalf, I wish to express my sincere gratitude to Lawrence Sikutwa Associates for inviting me to this very important discussion. Our interaction with the corporate world on the subject “The Future of the Zambian Economy – A Balanced Look” is indeed appreciated and very important. This subject, as you rightly pointed out in your letter of invitation to us, is vital considering that Zambia, in general, and Ndola, in particular, are in dire need of investment. It is this investment, Mr. Chairman, which would create employment and accelerate economic growth, a necessary condition to combating extreme poverty among the Zambian people. Ladies and Gentlemen, the future of the Zambian economy can only be known, if one understands the past and the present. Therefore, with your permission, I would like to begin by giving an account of the macroeconomic developments in Zambia in the recent past. I am certain that many of you have been following the economic trends and have seen that the economy has performed relatively well in recent years.
This is the dividend in respect of resource saving which represents one of the net benefits of moving to a single currency, even though the forex traders whose skills are no longer in such demand may not see it that way. In the bond market we have witnessed the first Hong Kong corporate issue in euro, which generated good demand - primarily from European investors but also with significant interest  1  BIS Review 53/1999  from local buyers. In former times an issue of this sort in any of the parent currencies would probably have been rarer, because the individual markets lacked maturity. A significant consequence of the euro’s arrival is that there now exists a market with the potential for a critical mass of liquidity well beyond that which the individual parent currency markets ever managed to achieve. There is further evidence to support that view in provisional reports that global international bond issuance in euro this year has exceeded that of issuance in the parent currencies during the equivalent period last year, while the same comparison for non-euro European currencies shows a decline (although I have not yet seen the formal statistics by which to confirm this). This has been achieved despite the fact that the process of establishing the euro firmly in these markets is not yet complete.