I therefore wish to thank, from the outset, Celpay for organising this timely conference and to welcome most warmly our foreign participants who I’m sure will bring a rare insight to this conference with their own experiences. It is widely acknowledged that expanding access to financial services for Zambia’s unbanked population remains one of the biggest challenges confronting the financial sector in this country. Findings from the last FinScope Zambia Survey which was conducted in 2009 showed that 62.7% of Zambian adults still remained financially excluded compared to 66.3% reported in 2005. This slight increase in access to financial services, however, fails to match the significant increase in the number of banking and non-banking institutions which over the same period increased from 14 to the current 19 banks and to over 90 in the case of the nonbank sector. The mismatch in growth between the supply side and the demand tells us a story that the physical increase in the number of the traditional financial service providers does not necessarily translate into a corresponding increase in access to financial services among the population. I believe it is this mismatch that calls for the need to examine the role that the non traditional platforms, such the mobile phones, can play in enhancing greater access to financial services.
Emphasis on communication has also been boosted by central bankers becoming increasingly aware that effective communication facilitates the transmission of monetary policy decisions to the economy, thereby making their jobs easier. Nonetheless, the Eurosystem’s strategy has some differences when compared with the inflation targeting strategies. Let me focus my comments in this respect on two particular issues: the relevant horizon for policy and the role of macroeconomic forecasts in policymaking and in communication. The relevant horizon for policy Inflation targeting is often described as a framework where monetary policy responds to deviations between a conditional inflation forecast at a specific time horizon, typically of around two years, and the inflation objective. From a welfare perspective, however, focus on an ex-ante fixed horizon is problematic for a number of reasons. In particular, economic theory suggests that the relevant horizon for monetary policy depends in a significant way on the size and nature of shocks affecting the economy, as well as on the prevailing circumstances (i.e. the initial state of the economy). Moreover, taken at face value, this approach neglects the implications of policy for price stability at longer horizons. BIS Review 132/2007  3  In connection with this last point, a number of researchers (and notably research at the BIS 5 ) have been arguing quite convincingly that that short-term inflation control is not enough to prevent the emergence of imbalances, which may lead later on to costly episodes of macroeconomic instability.