In simple terms, inflation may be defined as the change in the general price level of goods and services. However, in every day usage, inflation may be defined as “too much money chasing too few goods”. Describing inflation this way makes it easier to link it to monetary policy which is the control of money supply in an economy. The Bank of Zambia is concerned that inflation has remained stubbornly high for quite sometime now. As at end-June 2005, inflation was at 19.2% which we consider too high to foster sustainable economic growth. The poor weather patterns over the last agricultural season resulted in low crop output, particularly that of maize, which induced inflationary pressures. The unyielding rise in world oil prices on account of high demand from China and India, due to high economic activity, disruptions in supply, arising from war in the Middle East, as well as processing capacity constraints in many oil consuming countries have also caused a general rise in the domestic prices of petroleum products thereby increasing the cost of domestic production. In order to moderate the inflationary pressures arising from low crop output, on a sustainable basis, efforts should be directed at diversifying and improving agricultural output away from rain-fed agricultural practices. Government’s commitment to increased investment in the agricultural sector is therefore commendable as this should assist in improving the supply of agricultural output, in particular that of food items. This has an important bearing towards reducing consumer food inflation.
Caleb M Fundanga: Improving school infrastructure in Zambia Remarks by Mr Caleb M Fundanga, Governor of the Bank of Zambia, at the Handover Ceremony of computers to Mumbwa High School, Mumbwa, 4 February 2010. *  *  *  The Board Chairperson, Mr Gracious Hamatala Board Members Present The PTA Chairperson, Mr Mwila Kabange The Headmaster, Mr Kizito Kalonga Distinguished Teachers Students Members of the Press Ladies and Gentlemen It is an honour and privilege for me to be with you today as the Bank of Zambia makes this humble donation of 5 computers to Mumbwa High School. I am also glad because in some small way we are making a contribution towards ensuring a brighter future for the students. Chairpersons, I am informed about the numerous challenges and difficulties, the school continues to face in its quest to produce high quality education to students. For instance, I am aware that there is a critical low level of books compared to the population of students in the school. Further, having been established 40 years ago, the School’s infrastructure urgently needs to be rehabilitated. The refurbishment of infrastructure is not an easy task but in the able leadership of the Board Chairperson, I have no doubt that a solution will be found in good time. As we grapple with the ways and means of improving the school infrastructure, let me reiterate that the school need to maintain and protect the little infrastructure available.