Estate agents body welcomes Rating Act repeal
THE repeal of the Rating Act and its replacing with a more efficiently structured Act is a welcome move, says Zambia Institute Agents Estate president Logan Nyasulu.
Mr Nyasulu said rates were a crucial source of revenue and that decentralisation and the revising of the Rating Act should continue to be a priority to facilitate development at local level.
He said Minister of Finance Felix Mutati during his 2018 National Budget presentation was unapologetic in describing the financing regime in the banking sector as very high and by implication inaccessible by the majority of entities seeking project finance
In the real estate adviser for October, Mr Nyasulu said Mr Mutai highlighted the place of pursuing project financing through Public Private Partnerships (PPPs).
He was confident that the approach in financing was more efficient in risk identification and sharing and had the potential to unlock significant project value.
‘‘Rates are a crucial source of revenue. Thus repeal of the Rating Act and replacement of this with a more efficiently structured Act is a welcome move,’’ he said.
Mr Nyasulu said Mr Mutati called for the need to develop capital markets as a potential source of cheaper long-term finance.
The real estate body expressed hope that pursuing the development of the two financing models would likely place pressure on the financial sector, namely, banks forcing them to consider reducing their interest rates when marginal demand for bank finance falls.
He said with bank lending averaging 26.6 percent, the cost of borrowing had remained a challenge and did not encourage project execution.
Mr Nyasulu said the budget had come on the backdrop of reduced inflation at 6.6 percent, reduced policy rate from 15.5 percent to 11 percent and reduced statutory reserve ratio from 18 percent to 9 percent.
He said the budget also came at the back of a Standard & Poor’s credit rating of Zambia at ‘B’ with a stable outlook and that the ratings had a bearing on the county’s borrowing costs.