What we in fact expected over the next couple of years is continuing growth somewhat above trend with inflation picking up towards 3%, though rising which by our own past standards is a relatively benign outlook. What we are seeking to do is to moderate the pace of expansion before inflationary pressures begin to build in order to ensure that the outlook remains benign next year, and a year after, and well into the future. And that, Mr. Chairman, is precisely what most business people - whether in industry or commerce or financial businesses - tell us they would want us to do. It is also the purpose of the Government’s Inflation Target. Let me then turn to Europe and the question of monetary union. I do not think anyone questions that economic prosperity in Europe is crucial to economic prosperity in this country. Our fundamental interests are the same. And not many people question that the effective functioning of the European single market can make a major contribution to our collective prosperity - it is a positive sum game in our mutual interest. It is clear I think too that the single market in Europe will function more effectively if each member country pursues disciplined macro-economic policies in a context of structural, supply-side, flexibility - again as a matter of national as well as collective interest. So much it seems to me is common ground in all 15 EU member countries - and indeed beyond.
Distinguished Ladies and Gentlemen, the contribution of financial services to individual entrepreneurs as well as small and medium sized businesses cannot be over-emphasised. As you are no doubt aware, following the liberalization of the financial sector in the early 1990’s, the financial sector in Zambia has evolved rapidly spurred by increasing competition. Similarly, policies and the legal and regulatory frameworks have been developed to take into account the fast changing liberalised environment. These developments have resulted in a considerable increase in the number of banks and other financial service providers. Therefore, the banking sector has over the last few years, witnessed significant growth in consumer lending. As a matter of fact, on a sectoral basis the “personal loan” category has been the largest recipient of total credit in the recent years and accounted for 22% in November 2009. Small and Medium Enterprises have also significantly benefited from credit expansion. The resultant credit expansion has no doubt brought significant benefits to the economy as resources are increasingly channeled through to the lower end of the market. However, most of the credit extended by banks and microfinance institutions is targeted at individuals in formal employment or already established enterprises. Only an insignificant amount is extended to start-up initiatives or the informal sector. This has been exacerbated by the inability of entrepreneurs to articulate and sell bankable projects through robust business plans.