COMESA FRAMEWORK RIPE FOR SUSTAINABLE CAPITAL FLOWS
THE COMESA regional policy framework will be instrumental in attracting a diversified, sustainable and expanding pattern of external capital flows for all member states.
According to Bank of Zambia (BoZ) Director of Banking, Currency and Payment Systems, Lazarus Kamanga, the absence of a comprehensive national policy on financial sector development would usually result in shallow financial markets.
Mr Kamanga said this also resulted into relatively low financial literacy and limited financial inclusiveness.
He was speaking during a virtual Financial Services Regulators Sub- Regional Stakeholders Meeting organised by the COMESA Business Council (CBC).
"Liquid markets perpetrated by the poor information flow and visibility strategies of the local bourse, little innovation in the design of products, loose regulatory
coordination mechanisms, and limited mandatory insurance to cover public liability risks have contributed to the underdevelopment of the financial sector," Mr Kamanga said.
In respect to Zambia, he said, the Financial Sector Development (FSD) policy expressed the commitment of Zambia to fostering the development of the financial sector.
Mr Kamanga said this would be
done through the provision of strategic guidance and oversight.
He explained that the policy aimed at having a well-developed, competitive and inclusive financial system that supported efficient resource mobilisation and access to financial services and products by all.
"This takes well-developed financial sector attraction and cognisance that a and functioning will support the mobilization of savings and investments, allocate resources for development, and build the trust and confidence of a wide and diversified consumer base.
"For your information, the financial sector in Zambia is dominated by the banking sub-sector, followed by the insurance, pensions, microfinance and capital markets sub sectors," he said.
Mr Kamanga said the sector provided a wide variety of financial instruments and constituted the formal financial services, while informal financial services existed in the form of money lenders and savings group.
He said the financial sector was critical for contributing to the attainment of sustainable economic development and ultimately poverty reduction.
"This may be achieved through avenues such as provision of efficient payment systems for financial transactions and enhancement in efficiency of investments," Mr Kamanga said.