Zambia making significant progress in digital financial services – BoZ

[By Ernest Chanda in Kabwe]

THE Bank of Zambia says the country has continued to make significant progress in digital transformation, especially digital financial services.

Opening a media seminar on understanding the monetary policy framework, Bank of Zambia (BoZ) deputy director in charge of operations Francis Chipimo said various digital instruments had helped facilitate trade amidst the Coronavirus pandemic.

The seminar, organised by the Central Bank, has brought together 30 journalists from different media institutions.

It is meant to help journalists understand how the monetary policy framework is developed by the Centra Bank.

“Zambia has continued to make significant progress in the digital transformation agenda, especially in the area of digital financial services. For example, the number of active MNO based mobile money users increased by 77 per cent from 4,852,040 as at December 31, 2019 to 8,607,461 as at December 31, 2020,” he told delegates. “According to the Finscope Survey of 2020, financial inclusion increase of 10.1 percentage points to 69.4 per cent from 59.3 per cent in 2015 was mainly attributable to mobile money. It is worth noting that these digital payment options have been instrumental in facilitating trade and commerce amidst the COVID-19 pandemic. …during the year 2020, the National Financial Switch (NFS) project accomplished its final major milestone, the mobile payments module. As at end of quarter one of 2021, a total of 15 participants were live on the mobile payments module. This module provides great opportunities for everyone as it provides diverse use cases and enables customers to conduct instant payments across networks and service providers without handling cash. This is particularly important, given that the pandemic period has continued to ravage economies across the globe.”

And Dr Chipimo explained that for over the first part of this year, the Bank’s monetary policy is focusing on containing inflationary pressure.

He expressed optimism that inflation could be contained, adding that signs were there.

“Over the first half of this year, monetary policy is focusing on containing escalating inflationary pressures and anchoring inflation expectations. The shift in the monetary policy stance follows almost a one-year period of monetary easing to support financial system stability and economic growth in the wake of the COVID–19 pandemic,” said Dr Chipimo. “Thus, in February 2021, the Bank signalled its intentions to progressively tighten the monetary policy stance in order to bring inflation back to its six – eight per cent target range over the medium-term. This stance balances the need to rein in inflation against the efforts made to support financial system stability and economic growth. Ultimately, ensuring that inflation remains well anchored in the medium-term is essential to moderate fragilities in the financial sector and support economic recovery.”

The seminar runs from June 10 to 11, 2021.

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