Bank of Zambia Calls on African Nations to Create Long-Term Finance Plans

The Bank of Zambia has called on African nations to create long-term finance plans in order to foster productive long-term investments.

During the opening of the long-term finance regional workshop held in Lusaka, Denny Kalyalya, Governor of the Bank of Zambia, argued medium and long-term investments are crucial to the growth of a country’s gross fixed capital formation - a measure of the level of investment in a country, deducting disposals, in fixed assets - which is vital to long-term socio-economic growth.

While acknowledging the severity of ongoing global crises, Dr Kalyalya urged financial institutions not to sideline the development and transformation of the African continent. With over a million people living on the continent, he emphasised that long-term growth in Africa is vital to the future prosperity of the world. Countries in sub-Saharan Africa are expected to require between $30 and 50 billion USD in climate adaptation financing in order to meet the challenge of the years ahead.

Kalyalya thanked the Common Market for Eastern and Southern Africa (COMESA) and the African Development Bank (AfDB) for signing an agreement aimed at capacity building in the region. A spokesperson from the AfDB acknowledged Mr Kalyalya’s remarks and called for all countries to help bridge the infrastructure investment deficit estimated at $130 to $170 billion USD.

Zambia is seeking a number of international partnerships to bring further investment and growth to the country. Having received $1.1 billion in investment pledges during Q3, the Zambian Minister of Finance confirmed this week that the American state development agency, USAID, is set to launch two economic projects to improve the business environment and boost regional trade.

Raubil Durowoju, country manager for AfBD, ended his address by calling for more dialogue between governments and financial stakeholders to create synergy and support African economies.

Amidst the present global challenges of Covid-19, climate change, and conflict in Ukraine Durowoju emphasised that initiatives such as green bonds – that is, fixed-income investments designated specifically to support environmental projects – are vital for sustainable growth.

Environmental sustainability is a crucial pillar of the UPND’s economic transformation plan outlined in the medium-term budget plan. On top of signing a memorandum of understanding with the European Union on Forest Partnerships, the UPND has also signed a £1 billion pound green growth compact with the UK and created tax exemptions for income earned on certain green bonds with the aim of encouraging further investment.