More surprising is that there has been no recovery in these rates of productivity gain during the subsequent jobs recovery (Chart 23). The rungs in the jobs ladder have had a smaller productivity spacing than in the past. 20  All speeches are available online at www.bankofengland.co.uk/speeches  20  Chart 23: Firm productivity difference when moving jobs Per cent 16%  Firm productivity change  14% 12% 10% 8% 6% 4% 2% 2004  2006  2008  2010  2012  2014  2016  0% 2018  Sources: ONS and Bank of England calculations. Notes: Chart shows percentage difference in productivity between new firm and old firm with the median workers moves between firms. Summing up, then, a strong jobs recovery has not resulted in workers vigorously re-climbing the jobs ladder. Both their willingness to climb, and the pace of this climb, has been subdued relative to the strength and tightness of the jobs market. Post-crisis risk aversion, and changes in the nature of work, may have increased insecurities and dimmed workers’ appetite for a vertiginous career climb – or indeed any climb. The result has been subdued rates of pay and, in particular, productivity growth. Just recently, some of these patterns in pay, if not productivity, have begun to reverse themselves. Nominal pay growth has been going slowly through the gears over the past few years, from being in the “low 2s” three years ago, to the “high 2s” 18 months ago to having a “3” in front of it now.
This strategic move speaks louder than words and confirms that there are enormous opportunities here, which the bank can benefit from, despite the stiff competition in the market. Ladies and Gentlemen, another issue that the Bank of Zambia continues to challenge commercial banks on, is the cost of borrowing which continues to be high in spite of the efforts by the Bank of Zambia and the Government in ensuring that these costs come down. As you are no doubt aware, the Bank of Zambia reduced the Statutory Reserve Ratios from 14% to 8% in October, 2007 with a primary aim of bringing the cost of borrowing down. Further, in the recent few years, the Bank had managed to contain inflation to low levels in order to further reduce the lending rates. Coupled with this, in the recent past, the Government adopted prudent fiscal policies that enabled the private sector to access more credit from the financial system. Despite these efforts, credit is still not affordable to the majority of our people. This high cost has in turn stifled the growth of the productive sector and in particular Agriculture and the SME sector, which are the engine for the economic growth of our country. Hon Minister, I am however, glad to note that credit to the private sector has increased significantly with the Personal loans category accounting for the largest beneficiary of credit followed by the Agriculture sector.