ZAMB NKER DECEMBER 2018 EDITION www.boz.zm A BANK OF ZAMBIA JOURNAL

Zambanker December 2018 1 ZAMB NKER

CONTENTS Views expressed in this publication are not necessarily those of the Bank of Zambia Management or the Editor PG 9 - ZAMBIA’S NET FDI INFLOWS IMPROVE HEAD OFFICE Bank of Zambia, Bank Square, Bank of Zambia Governor Dr Denny Kalyalya has said Cairo Road P. O. Box 30080 Zambia’s net Foreign Direct Investment (FDI) inflows Lusaka, 10101, Zambia significantly improved, rising to US $1,179.6 million Tel: + 260 211 399300 in 2017 from US$486.1 million in 2016. Fax: + 260 211 221764/237070 E-mail:[email protected] Website: www.boz.zm

PG 13 - RESHAPING THE DIGITAL FOLLOW US ON: FUTURE Flickr: Bank of Zambia Deputy Governor-Administration Dr Tukiya Kankasa- Mabula has observed that while some progress has Twitter: @BankofZambia been made towards increasing gender diversity in YouTube: Bank of Zambia the ICT industry, much is left to be done. Accordingly, Facebook: @BankofZambia the Bank has elected to start giving scholarships to at least three female students in selected institutions of higher learning. MISSION: To achieve and maintain PG 17 - SERVING THE COMMUNITY price and financial system stability to foster sustainable economic development. In furtherance of its robust social corporate responsibility activities, the Bank of Zambia made donations of various forms to 24 organisations in different sectors in 2018. ZAMB NKER DECEMBER 2018 EDITION www.boz.zm A BANK OF ZAMBIA JOURNAL

PG 28 - PROMOTING GIRLS AND WOMEN IN ICT

We live in a digital age where Information Technology (IT) impact almost every aspect of life, be it business or personal.

Zambanker December 2018 1

2 December 2018 Zambanker 2019 IN FOCUS

By ZAMBANKER REPORTER

The Bank of Zambia has a number of activities lined up for implementation in the coming year including: the 2020-2023 Strategic Plan, Introduction of Primary Dealership System, Problem Bank Resolution Framework and the Financial Innovations and Technologies.

Government securities are expected to be ready next year. The Guidelines in their current state raise conflict of interest concerns and as such, it became imperative to suspend staff participation in Government securities transactions.

The Bank will also be working on finalising the Problem Bank Resolution Framework, which will facilitate quick and appropriate response to emerging issues and problems in banks. The Framework, supported by Banking and Financial Services Act, 2017, will have a wide range of resolution options that include restructuring, selling a bank as a going concern, transfer all or part of its business to a bridge bank, or initiate a purchase and (l-r) Director - Bank Supervision Ms Gladys Mposha, Director - Financial Markets Dr Jonathan Chipili and assumption transaction. Director – Economics Dr Francis Chipimo at one of the meetings in the BoZ Auditorium. The Bank will next year start working on developing a cyber- peaking during his end of year it, support it, defend it through our security framework for all address to members of staff work and attitudes. Above all, we all financial institutions under recently, Bank Governor, Dr need to work together as a team, Bank our regulatory ambit. This is in Denny Kalyalya explained that of Zambia Team,” he implored. view of the financial landscape Sthe Bank had started the preparatory which has continued to witness process for the development of the Another activity the Bank is unprecedented developments in next strategic plan for the period, 1st working on is introducing a Primary the usage of financial innovation January 2020 to 31st December 2023, Dealership system next year, as part and technologies to develop digital with most of the work leading to the of the continued efforts, to develop the financial products and services. finalisation of the Plan scheduled to secondary market for Government take place early next year. bonds. Under this system, eligible “We now have bitcoin and other commercial banks, designated as crypto assets supported by block “It is expected that the Plan will be Primary dealers, will have exclusive chain technology. While these ready by September 2019. I therefore rights and obligation to take up 100% developments are welcome with urge you all to cooperate, diligently of the primary auction for benchmark respect to supporting our financial work together, and support this bonds (3-, 5- and 10-year bonds) and stability and inclusion efforts, process. We must all individually take re-sale these in the secondary market. we ought to think of how to deal responsibility for the Bank and not with the associated risks, such as just look to the Bank for a salary. It is On a related, but different note, cybercrime and money laundering,” OUR Bank and we all need to promote the revised internal guidelines on he concluded.

Zambanker December 2018 3 News In Brief

Zambia to host global meetings inclusion.

The Bank of Zambia will be hosting two working World Bank IDA18 mid-term review meeting groups of the Alliance for Financial Inclusion (AFI) in 2019, namely, the SME Finance Group (SMEF) and The Zambian Government hosted the World Bank Financial Inclusion Strategy Peer Learning Group Group’s International Development Association (FISPLG). The Alliance for Financial Inclusion is an (IDA) 18th Mid-Term Review Meeting from organisation for financial inclusion policy makers, November 12 – 15, 2018 in Livingstone. President, comprising central banks, other financial sector H.E. Mr Edgar Chagwa Lungu, officially opened the regulators and Ministries of Finance. The meetings Meeting, which was attended by delegates from of the working groups will be held from 1-4 April over 70 countries. 2019 in Livingstone. IDA, established in 1960, is an arm of the World The hosting of the Meetings will provide an Bank Group that provides grants and concessional opportunity for Zambia to showcase to the loans to the poorer members of the World Bank international community its financial inclusion Group. Currently, there are 75 such members, 39 of journey and will also be a demonstration of the which are in Africa and Zambia is one of them. IDA country’s commitment to the financial inclusion is largely funded by development partner countries global agenda. who meet every three years to replenish the funds and review the policies. IDA 18 covers the period 1 Through its membership to AFI, the Bank of Zambia July 2017 to 30 June 2020 and has historic financial has been able to upscale its skills and competencies package of US$75.0 billion. IDA 18, among other in financial inclusion, thereby making significant things, aims to scale up development interventions strides in financial inclusion. At national level, to tackle conflict, fragility and violence, forced the country benefited immensely from the AFI displacement, climate change and gender inequality network in the development of the National as well as promote good governance and institution Financial Inclusion Strategy, which was launched building, and support member countries to create in November 2017. The expectation is that the jobs and economic transformation. The purpose country will continue to benefit in the actual of the Meeting in Livingstone was to review the implementation of the strategy, which cuts across implementation and performance of IDA 18. various institutions. AFI provides a platform to peer review against countries that have successfully The Meeting also launched IDA 19 negotiation implemented similar frameworks and regulations. process. The specific areas of focus for IDA 19 may be on how IDA can be part of the solution to The Meetings will be preceded by a one-day addressing the deteriorating debt sustainability symposium and the BoZ shall extend an invitation levels in IDA countries. Other emerging priorities, to relevant stakeholders, including the Bankers such as, human capital development and disruptive Association of Zambia (BAZ). Approximately 100 technology are set to be incorporated in IDA 19. international participants will be expected. Furthermore, IDA 18 has Private Sector Window, Deposit Insurance Bill goes to Parliament which borrower countries are pushing to be extend to all eligible IDA members as the current The Central Bank has thanked Government for Window has been restricted to countries in fragile committing in the 2019 Budget to take the Deposit and conflict situations. We would therefore like to Insurance Bill in 2019 to Parliament for legislation. urge you to take interest on this and explore how Once enacted into law, the deposit insurance you can take advantage of this window and the scheme will help to foster greater confidence of the (IFC) International Finance Corporation and MIGA public to get into the financial sector. The deposit (the Multilateral Insurance Guarantee Agency) insurance scheme will not only protect depositors generally. by way of compensating them for the insured deposits in the event of a bank failure in a timely The briefs are excerpts from Governor’s Meeting manner, but will also promote increased financial with CEOs of financial institutions

4 December 2018 Zambanker MoF APPOINTS NEW BOARD

By ZAMBANKER REPORTER

New Board of Directors to provide oversight of the Bank’s functions were recently appointed by the Ministry of Finance (MoF). The Board comprises eight members consisting of two permanent members who are the Governor who is also Chairperson and the Secretary to the Treasury. The other six members are non-executive directors. A brief is given here below for each one of them.

Dr Denny H. Kalyalya Mr Fredson Yamba Prof. Hellicy C. Ng’ambi

Dr Denny H. Kalyalya has been Mr Fredson K. Yamba has been the Prof. Hellicy C. Ng’ambi is a full Governor of the Bank of Zambia Secretary to the Treasury and an ex- professor of business leadership. She and Chairperson of the Board of officio on the Bank of Zambia Board since is currently the Vice Chancellor at Directors since February 2015. 2011. Before being appointed Secretary Mulungushi University and Kwame Prior to this appointment, he to the Treasury, Mr Yamba served as Nkrumah University. served as Executive Director at Director - Research, Consultancy and the World Bank Group (WBG) Development Division at the National She has worked in various from 2012 to 2014 and as Alternate Institute of Public Administration management positions in institutions Executive Director from 2010 to (NIPA). He also served as Director and of higher learning such as the 2012, representing Africa Group Chief Economist at the Ministry of University of Botswana, University of 1 Constituency comprising 22 Commerce, Trade and Industry. Earlier, South Florida and University of South countries. Dr Kalyalya also served Mr Yamba held several senior positions Africa. She was previously Principal as Deputy Governor – Operations at the Ministry of Finance and National and Managing Director of the at the Bank of Zambia from 2002 to Planning including: Acting Director- Academy of Business Management 2010 and as Director – Economics Budget Office, Chief Budget Analyst, in Botswana, a private university from 1998 to 2002. Principal Budget Analyst and Senior college she founded. She is also one Budget Analyst, among others. He was of the pioneers of the Thabo Mbeki He obtained a Bachelor of Arts also a secondary school teacher for African Leadership Institute. in Economics in 1980 and a various commercial subjects. Master of Arts in Economics in She was the consecutive winner of 1983, both from the University He holds a Master of Science degree the CEO Africa’s most influential of Zambia (UNZA). He obtained in Development Finance from the women of the year in government a second Master of Arts degree in University of Reading in the United and business Awards and the 2017 Economics from the University Kingdom, Bachelor of Arts in Economics Continental Lifetime Achiever of Massachusetts/Amherst, USA and Public Administration from the Award. She has authored, edited and (UMASS) in 1989 and later went on University of Zambia as well as a published several articles in journals to obtain a PhD in Economics from Diploma in Secondary School Teaching and book chapters and books. UMASS in 1993 on a Fulbright Hays from the Technical Vocational Teachers Scholarship. College in Luanshya. Prof. Ng’ambi holds a Doctorate in Story continues on page 6 Zambanker December 2018 5 Story continues from page 5 Business Leadership, a Master of Business School at Heriot Watt Partner of Ernst & Young Zambia Science in Management, a Master University, a Diploma in Corporate which he established and of Business Administration, a Governance from ACCA, a post graduate managed until June 2009. Prior Bachelor of Arts Degree, Chartered diploma in Teaching/Lecturing to this, he was a Partner at KPMG Institute of Marketing Certificate, Methodology from University of Zambia and UK. International Teachers’ Programme Lusaka and a Postgraduate Certificate Certificate, and an American Council in Business Research Methods from He is a Fellow of the Association on Education certificate. She is Heriot Watt University. He is currently of the Chartered Certified a certified change management pursuing a PhD in Accounting and Accountants and the Zambia expert. Finance from University of Lusaka. Institute of Chartered Accountants.

Mr Bryson Mumba Mr Mwila Lumbwe Dr Andrew Mwaba

Mr Bryson Mumba is a corporate Mr Mwila Lumbwe is a director Dr Andrew Mwaba is an economist governance, financial and business at Investment and Management in International Development management expert. He is currently Solutions Limited, a consultancy and Finance. He is an expert in the Executive Dean – School of firm offering investment advisory policy review and strategy and Business, Economics and Management services to clients considering has experience in resources and at the University of Lusaka. Mr inward investment in Zambia and people management. He has Mumba started his career at Zambia the SADC region. broad international exposure in Consolidated Copper Mines (ZCCM) business in Africa and beyond. in 1985. Other institutions he has His expertise has been applied in worked for include Deloitte & Touche different sectors at various board Dr Mwaba worked at the African (UK and Zambia), University of Abertay and management positions in Development Bank for over 30 (Dundee, Scotland), Institute of organisations including Zambia years where he held various Development Management (Botswana), Revenue Authority, Zambia management portfolios. He Public Enterprise Evaluation Agency National Commercial Bank, began as a young professional (Botswana), National Road Fund Standard Chartered Bank and and rose through the ranks to Agency (Zambia) and Zambia Daily Commission of Enquiry on the Principal Economist, Advisor Mail Limited. Zambia National Building Society. to the Vice-President, Head He has carried out forensic Economist, Division Manager He served as an external member investigation services, served as and finally as Country Manager of the Bank of Zambia’s Audit and Liquidation Manager of Credit in Malawi. He has authored, Finance Board Committee from May Africa Bank Zambia Limited supervised and published several 2016 to 2018 and has served on several and National Home Stores, and research papers and articles in other boards and committees. was the Receiver of Kapiri Glass journals. Products Limited. Mr Mumba is a Fellow of the Association He holds a Bachelor of Arts of Chartered Certified Accountants Mr Lumbwe was one of the Degree in Economics from the (ACCA), the Zambia Institute of team leaders on the ZCCM/GRZ University of Zambia, a Master Chartered Accountants (ZICA) and the negotiating team that presided of Science Degree in Agricultural Institute of Directors (IoD), Zambia. over the privatisation of the Economics and Agribusiness mining industry in Zambia and Management from Ohio State He holds a Bachelor of Science in led the privatisation of the trade University, an MPA in Economic Computer Studies from Loughborough sector. He served as financial Policy Management from University of Technology, a Master advisor to the Attorney General Columbia University as well of Accountancy from the University in the dissolution of the Central a Doctorate in Development of Dundee, a Master of Business African Power Corporation. He Studies from the University of Administration from Edinburgh further served as the Managing Manchester. Story continues on page 7 6 December 2018 Zambanker Story continues from page 6 In May 2009, she was elected President of business strategy expert. She is the Zambia Institute of Human Resource currently the Managing Director at Management (ZIHRM), the first woman Metal Fabricators of Zambia. to hold the position. She served as external member of the Bank of Zambia’s Her career spans over 12 years, having Appointment and Remuneration Board served as a business consultant Committee from May 2016 to 2018. She at Independent Management was the first Board Chairperson of the Consulting Services. She later Zambia Qualifications Authority. moved to take up the position of Chief Executive Officer at Zambia Ms Musiwa holds a Bachelor of Arts Association of Manufacturers. She Degree in Public Administration from played a leading role in improving the the University of Zambia and is a Fellow image, multiplying the membership of ZIHRM. She holds several national and revenues of the Zambia and international awards including Association of Manufacturers. In Ms Namucana Catherine Musiwa two Global HR Leadership and Achiever 2013, she was awarded for her Awards conferred on her by the Africa- distinguished contribution to private Ms Namucana C. Musiwa is a Human India Summit under the auspices of the sector development by the Ministry Resource Management Practitioner World Human Resource Development of Commerce, Trade and Industry and is the founder and Chief Executive Congress. through the Private Sector Reform Officer of Career Prospects Limited, Program. a Human Resources Development Practice and Management firm. She is Ms Chabala holds a Bachelor’s Degree Chairperson of the ZIHRM Women’s in Education from the University Network and is serving as Chairperson of Zambia, a Master of Science in of the University Of Zambia Caretaker International Trade Policy and Committee Of Council. Trade Law from Lund University and is currently pursuing a Master Ms Musiwa’s career spans over 30 years, of Business Administration from the having worked in various capacities in Eastern and Southern Management organisations such as Boart Longyear Institute. Zambia Limited, Prince Construction Company Limited and the International Labour Organization.

She served as an external member of the Bank of Zambia’s Appointments and Ms Roseta Mwape Chabala Remuneration Board Committee from May 2016 to 2018. Ms Roseta Mwape Chabala is a

PUBLIC NOTICE REDUCTION IN THE HANDLING FEE ON GOVERNMENT SECURITIES The Bank of Zambia wishes to advise all investors in Government securities and the general public that with effect from February 5, 2019, the handling fee charged on Government securities has been reduced to 1 percent from 2 percent. This measure is intended to reduce transaction costs incurred by investors in Government securities in particular and promote the Government securities market in general. The handling fee will be applied on the discount income on Treasury bills and on the coupon interest earned on Government bonds. Communications Division Bank of Zambia P O Box 30080 LUSAKA Telephone number 0211 399300

Email [email protected] / Web: www.boz.zm

Zambanker December 2018 7 BUILDING INSTITUTIONS, DEVELOPING MARKETS

By ZAMBANKER REPORTER

The Bank of Zambia (BoZ) is devoted to the development of a vibrant secondary market and is committed to supporting the development of African financial markets by creating the right environment that will foster investor confidence and economic growth, BoZ Governor Dr Denny Kalyalya has said.

Delegates who attended the 2018 Annual workshop of the African Financial markets Initiative at the Avani Hotel in Livingstone.

peaking in Livingstone during that the Government had responded to important given the role the bond the 2018 annual workshop of some of these important reforms. For markets continue to play in domestic the African Financial Markets instance, the Government removed resource mobilisation for sovereigns Initiative (AFMI) of the African withholding tax on the discount and corporates in African countries. SDevelopment Bank, Dr Kalyalya income on Government bonds in 2016. explained that the Bank, in this regard, More recently, the Bank finalised “Transparency is important as it made an undertaking a few years ago to the design of the Primary Dealership facilitates timely availability of revamp and install a vibrant secondary System and the project has reached an necessary market information needed market for Government securities in advanced stage where it is receiving by investors to make better informed which a number of recommendations applications from commercial banks decisions. Equally important, it were adopted, including the need to intending to become Primary Dealers. helps to reduce transaction costs create a conducive environment for The Primary Dealership System is and to bring about improved introducing a Primary Dealership expected to go live in the first quarter market confidence, which in turn System in Government securities, of 2019. potentially leads to increased investor introducing a bond consolidation participation and improved market programme, re-opening of Government The Governor explained that the liquidity. Enhancing transparency in bonds, removal of withholding tax and theme for this year’s workshop, our bond markets would therefore medical levy, as well as allowing of “Enhancing Transparency in African enable us to reap more benefits,” he short selling of securities. He explained Bond Markets”, was particularly said. Story continues on page 12 8 December 2018 Zambanker ZAMBIA’S NET FDI INFLOWS IMPROVE

By ZAMBANKER REPORTER

Bank of Zambia Governor, Dr. Denny Kalyalya, has said Zambia’s net Foreign Direct Investment (FDI) inflows significantly improved, rising to US $1,179.6 million in 2017 from US$486.1 million in 2016. This was attributed to an increase in Foreign Direct Investment (FDI) liabilities inflows, following a growth of 67.1 percent to US $1,107.5 million from US $662.8 million in 2016. Foreign Direct Investment assets, however, reduced by US $72.1 million following repayment of debt by non-resident parent companies owed to domestic enterprises.

BoZ Governor Dr Denny Kalyalya presenting his remarks at the Dissemination Workshop of the 2018 Survey Results on Foreign Private Investment and Investors Perceptions in Zambia while other dignitaries listen in.

he Governor was speaking The BoZ Chief stated that the other $1,107.5 million from U$ $662.8 at a dissemination major finding of the survey was million in 2016. This growth was workshop for the 2018 that Zambia’s private sector foreign due to increased investment in the survey results on foreign liabilities inflows declined by 3.1 mining and quarrying industry, Tprivate investment and investor percent in 2017 to US $1,045.4 million after a rebound in commodity prices perceptions in Zambia organised by from US $1,078.9 million recorded on the international market and the Zambia Development Agency, in 2016. Despite the decline, Foreign improvements in electricity supply. Central Statistical Office and the Direct Investment liabilities inflows Other investment inflows, however, Bank of Zambia held at the Taj contributed the highest, following recorded a net outflow of US $71.0 Pamodzi Hotel in Lusaka recently. a growth of 67.1 percent to US million compared to a net inflow of Story continues on page 10 Zambanker December 2018 9 Story continues from page 9 ZAMBIA’S NET FDI INFLOWS IMPROVE Government policy measures affecting business operations, road infrastructure development was rated most positively followed by promotion of value addition.

The Bank of Zambia and its collaborating institutions expressed gratitude to the respondents who participated in the Survey for completing the questionnaires. ‘We thank you most sincerely for your cooperation. Particularly, we are aware that sometimes we get into the way of the respondents’ work as we collect data from the various enterprises,’ Dr Kalyalya said.

The Bank and its collaborating institutions were working on using technology to improve survey collection and reduce any inconvenience caused during the survey exercise. The Bank Governor said that the continued participation of various enterprises Dr Denny Kalyalya in this exercise was extremely important because it generated information that was critical to the US $400.9 million recorded in 2016. profitability and particularly that of economic policy-making process. The significant decrease was due to the mining and quarrying sector. For example, private foreign higher loan repayments, especially capital flows are an important in the agriculture, mining and Dr Kalyalya said it was reassuring source of financing in the balance manufacturing sectors during the to note that the main motivating of payments. The data which is period. Portfolio Equity Investment factors for investing in Zambia collected helps to develop a more recorded a net outflow of US $0.3 remained economic growth complete picture of developments million whilst financial derivatives prospects and market potential, in both the current and financial registered a net inflow of US $ 9.1 followed by political stability. account and this has important million. Furthermore, the ease of doing implications for policy makers’ business and good governance were views on underlying exchange Further, the 2017 survey results also ranked positively as factors for rate pressures. This year’s survey revealed that 193 majority owned investing in the economy. response rate was 89.0 percent. foreign affiliates (MOFAs) were This points to the solid cooperation enumerated compared with 182 The Governor also said several that exist between the Bank, its in 2016. The performance of respondents indicated that monetary collaborating institutions and the these enterprises significantly and fiscal policies were encouraging various enterprises and it was improved in the year under review in 2017. On the monetary policy expected that this would remain as evidenced by an increase in front, respondents appreciated going forward. profitability, sales and value added. the efforts made in stabilising Further, the contribution of these the foreign exchange market as The Governor thanked participants companies to employment creation well as the upward revision of the for attending the workshop and and taxes paid rose. Profits of the electronic fund transfers for direct hoped that they would use the MOFAs increased by 93.8percent to credits from ZMW100, 000.00 to opportunity to discuss the survey US$512.3 million. This profitability ZMW500, 000.00. On the fiscal policy findings, the reasons behind was driven mainly by the mining side, the policy to allow 100 percent the findings and recommend and quarrying sector, after their increase in capital allowances on appropriate response measures profits rose to US$411.4 million equipment and machinery was that would continue to improve the from losses of US$85.9 million in the most welcome policy measure overall business environment in 2016. Higher copper prices on the followed by Government intention the country. He told the participants international market and higher to limit the budget deficit. The that their views would be very export volumes supported overall survey further revealed that among useful in informing policy.

10 December 2018 Zambanker READ, UNDERSTAND AND COMPARE Ts & Cs’

By ZAMBANKER REPORTER

Bank of Zambia Governor, Dr Denny Kalyalya has advised financial services users to carefully read and understand the terms and conditions for various financial products as well as make comparisons before committing themselves. Speaking during the commemoration of the World Savings Day (WSD) at the University of Zambia in Lusaka recently, Dr Kalyalya urged the users to not just select a financial product because their neighbour, workmate or even schoolmate had chosen it but to ensure that the financial product or service they choose meet their needs.

WSD has also been regarded as a particularly successful measure of awareness on the importance of savings, as well as to educate people on how to save.

The World Savings Day theme for 2018 is ‘Save, Invest, Insure. What Do You Wish For?’

In Zambia, this commemoration has been observed since 2014, initially, through activities of the National Savings and Credit Bank - NatSave. From 2015 onwards, the World Savings Day was adopted as a teachable moment under the National Strategy on Financial BoZ Governor Dr Denny Kalyalya at the Ecobank stand during the World Savings Day. Education for Zambia.

Todate, more public and private n the other hand, the is used within the agreed terms financial sector stakeholders joined Governor has urged and conditions; facilitate a limited the commemoration led by the service providers to number of withdrawals per month three financial services regulators, explain their products at no cost, beyond which the client namely: the Bank of Zambia; the Oand services terms and conditions would pay a fee to meet the banks Pensions and Insurance Authority to consumers as part of their operating costs and offer a minimum and the Securities and Exchange partnership to ensure positive balance that will be defined within Commission. The collective effort of market conduct and consumer the terms and conditions set by the holding sensitisation campaigns by protection. stakeholders. the three regulators has so far born fruit. For instance, the Insurance Meanwhile, Dr Kalyalya said the The commemoration of the WSD Sector has scaled up financial Bank of Zambia is working with dates as far back as 1924, during education through the Insurance commercial banks to define a cross the first International Savings Week commemoration that is held cutting ‘Basic Savings Account’ Bank Congress in Milano, Italy. The in September, with this year’s theme that will have minimum charges. event has been adopted around being: ‘Protect You and Yours: He explained that it was being the world for celebration on 31st Insure Now’. proposed, among others, that the October, annually. It emphasises the Basic Savings Account shall: have no importance of saving for national On the other hand, the Capital charges as long as such an account economies and individuals. The Markets sector conducted for the Story continues on page 12 Zambanker December 2018 11 Story continues from page 11 READ, UNDERSTAND AND COMPARE TS & CS’ second year running, the Investor their needs. sector reforms including revision Week under the theme ‘A Smart and updating of financial sector Investor through Capital Markets, The vision of the National Financial regulations, among others. showcasing capital market players Inclusion Strategy is: “to achieve who offer a variety of investment universal access and usage of a For instance, the Bank of Zambia in products and services that are broad range of quality and affordable August this year using powers vested savings related such as shares, bonds, financial services that meet the needs in it by the Banking and Financial collective investment schemes / unit of individuals and enterprises.” Services Act no. 7 of 2017 issued trusts, among others. directives on the ‘Prohibition against This implies that irrespective of Unwarranted Charges and Fees’. These efforts are being carried social or economic status, gender, Some of these included charges out under the National Financial or level of education, as a country it for over the counter cash deposits, Inclusion Strategy (NFIS) that was is to be ensured that every segment ATM surcharges and monthly launched in 2017. Under the National of Zambian society has access to maintenance fees on a basic savings Financial Inclusion Strategy (NFIS) basic financial services and this account. launched by the Government in includes the facilitation of affordable November 2017, financial capability savings accounts. Recognising This directive was seen as a way to and education remains a priority, as the need to avail people a broad make financial services affordable it is expected to equip consumers range of quality and affordable and strengthen the country’s with the knowledge, skills, attitudes, financial services and products, financial inclusion efforts. It is the and behaviours required to act in the regulators in partnership with Bank’s expectation that more people their best interests and to select and other key players have been at the will be encouraged to save with use financial services that best meet forefront of implementing financial formal financial institutions.

Story continues from page 8 BUILDING INSTITUTIONS, DEVELOPING MARKETS Dr Kalyalya observed that while non-local currency debt raised by a long way in deepening African bond there had been great leaps in the African countries and multinational markets. He said this will serve as a development of capital markets organizations hit a five-year high source of funding to governments and in Africa, there remains a gap in in 2017, a clear indication of the corporates for investments in critical the intermediation role of African big appetite for debt financing in sectors, including road infrastructure, capital markets as domestic pools of African governments by international power, education, health and funds from pension and insurance investors. renewable energy. companies continue to see major growth. He said more needed to be done “Over the past five years, up to “We are no doubt aware of some of to improve financial infrastructure $128.1 billion debt transactions the factors that are said to be standing and make Africa’s capital markets have taken place by African issuers in the way of international investors more attractive, in areas such as on international markets, of which investing in local currency debts cross-border listings, settlements, and 85% was denominated in US dollars. issued on African bond markets. These payments for transactions. Sovereign and supranational issues include sovereign risks, currency accounted for 75% of the total value risks, and lack of credible data about He said the availability of deep and raised. I am also proud to say that Africa’s bond markets. Therefore, liquid capital markets capable of the African Development Bank programmes, such as, the African attracting and retaining domestic and registered a K2.7 billion medium term Financial Markets Initiative are international investors was especially note programme with the Securities important contributors to improved important at this time when African Exchange Commission (SEC), in Lusaka transparency and availability of governments and corporates still have Zambia, which was approved by the relevant and credible data on African a huge need to mobilise funding for SEC Board on 17th July 2013,” he said. debt markets,” he said. infrastructure development. He added that the ability to attract He was hopeful that the workshop He explained that according to the frontier and emerging market would offer solutions to the challenges 2017 PricewaterhouseCoopers (PwC) investors to invest in African debt in attracting investors into local Africa Capital Markets Watch Report, market issues in local currency will go currency bond markets in Africa.

12 December 2018 Zambanker RESHAPING THE DIGITAL FUTURE ...BoZ acts to increase diversity in ICT...

By ZAMBANKER REPORTER

Deputy Governor-Administration Dr Tukiya Kankasa-Mabula has observed that while some progress has been made towards increasing gender diversity in the ICT industry, much is left to be done. On it’s part, the Bank has elected to start giving scholarships to at least three female students in selected institutions of higher learning. It is considering extending this initiative to girls in secondary schools especially those in rural areas. The initiative is aimed at raising awareness and empowering and encouraging girls and young women to consider studies and careers in Information and Communication Technologies (ICTs).

n a speech read on her behalf by Director Non-Banks Financial Institutions Supervision Department Ms Freda Tamba, at Ithe ‘‘She Leads Tech, – ‘Women in Tech – Diversity and Inclusion’ seminar, Dr Kankasa-Mabula explained that other than promoting the number of women practitioners in the tech industry, the BoZ is actively engaged in developing policies to increase the number of women utilising technological platforms to access financial services. These interventions are critical to supporting Government’s desire to increase the levels of financial inclusion in Zambia.

She explained that ICT is not only a sector important in itself but a fundamental part of virtually every field of the economy and of people’s everyday lives. She added that this transversal importance means that a successful and dynamic ICT sector will help an economy to flourish while a shortage of information and communication technologies bears the potential to disrupt it. Dr Kankasa- Mabula explained that encouraging Deputy Governor-Administration Dr Tukiya Kankasa-Mabula young girls to pursue courses in this Story continues on page 14 Zambanker December 2018 13 Story continues from page 13 RESHAPING THE DIGITAL FUTURE area and women to pursue careers in the ICT sector is not only a matter of social justice or increasing diversity but an economic necessity.

“The Bank has also been working hard to attract and promote women in ICT. Our aim has been to increase the profile of women in Science, Technology, Engineering and Mathematics (STEM) and encourage more girls into STEM career within the Bank. However, since very few young women are attracted to ICT studies at tertiary level, the Central Bank has struggled to find suitable candidates for most ICT positions existing within its ranks. This is despite the Bank’s affirmative action and conducive gender mainstreaming strategies. Currently the ratio of the Staff Complement in the ICT Department is two (2) females to twenty-seven (27) male employees,” she lamented.

The Deputy Governor congratulated Director Non-Bank Financial Institutions Supervision Ms Freda Tamba the women already working in the sector for setting the trend and raising the bar for other women in Zambia let them down,” she Advised. not succumb to early child marriage. and Africa as a whole. She encouraged them to continue working very hard She explained that there was no doubt Government launched its five- year bearing in mind that they were that enhancing the participation of National Financial Inclusion Strategy mentors and role models to the young women and girls in the ICT sector which will run from 2017 to 2022. ladies who were looking up to them will contribute to promoting and In this strategy, Government has for inspiration and direction. achieving greater workforce diversity committed to raising overall financial and participation, which is good for inclusion levels in the country to 80 Dr Kankasa Mabula implored the ICT business. percent by 2022 from 59 percent. sector in the country to provide the One of the key enablers that will necessary platform for women and The Deputy Governor elaborated that facilitate meeting this target are girls to tap into the immense potential it is the belief of the Central Bank that digital technologies like mobile that women have by giving them an increasing the number of women phones which have made it easier opportunity to showcase their skills that can digitally undertake financial for many people to conduct financial and bring the desired diversity and transactions to improve their transactions such as making and credibility into the workplace. livelihoods and grow their businesses, receiving payments, at a lower cost will financially empower women and conveniently. “I want to congratulate the women and increase their participation in that are already in the technology economic activities. She added that The Bank of Zambia is a key sector as well as challenge them to a financially empowered woman stakeholder in the implementation be agents of change in the digital would be able to think outside the of the national strategy and has revolution of financial services, ‘cultural and social’ box and make adopted increasing formal financial particularly for their fellow women. I bold decisions to promote young girls inclusion by 16 percentage points encourage them to use their positions and women in Technology. She said as one of its strategic objectives. In to influence policies that help increase empowered women would be able to achieving this, the Bank of Zambia women’s access to technology, as well encourage their girl children to take is particularly keen to closing the as promote the development of user up science and mathematical subjects gender gap in the number of women friendly digital products for women and technological programmes using digital financial services. This and to embark on digital literacy despite societal and cultural norms. will only be achieved if society makes programs for young girls and women. Furthermore, Dr Kankasa-Mabula it easier for women to access and use Your visibility in the ICT sector will explained that an empowered digital devices such as mobile phones spur their ability and your credibility woman would ensure that her girl- and other financial technologies will ascertain their relevance. Do not child finishes her education and does (fintechs).

14 December 2018 Zambanker CENTRAL BANK VICTORIES

By ZAMBANKER REPORTER

Bank of Zambia Governor, Dr Denny Kalyalya has announced that the Central Bank made some remarkable achievements in several areas during 2018. In his end of year address, Dr Kalyalya thanked all members of staff for the roles played directly or indirectly towards these achievements.

n the area of price stability, for To maintain integrity, confidence, example, Dr Kalyalya said that and stability in the financial sector the Bank performed fairly well on as well as to foster compliance by the its mandate with inflation, for the regulated institutions, the Bank took Imost part of the year, remaining within supervisory action against erring the target range of 6 – 8%. Inflation was Non-Bank financial institutions. as at end November at 7.8%. However, Licenses of 5 Bureaux de changes were upside risks heightened in light of suspended for 6 months and licenses tighter than expected global financial of 2 microfinance institutions were conditions, lower than expected copper revoked. prices, higher than programmed fiscal deficit, rising debt and debt servicing, Other achievements are that: for relatively weak exchange rate, lower the first time in a long time, the level of international reserves and Bank, successfully restructured a high level of non-performing loans. commercial bank in possession. He added that inflation was therefore The said commercial bank being projected to exceed the upper bound Intermarket Banking Corporation, of the target range in the coming three which the Bank took possession of Dr Denny Kalyalya quarters, but trend towards the mid- on November 28, 2016. A new bank point of the target range thereafter. under the name, Zambia Industrial Commercial Bank, opened its doors than in the previous years. The Bank “Should these risks materialise, an to the public. The launch of Zambia continued to support Government in upward adjustment in the Policy Rate Industrial Commercial Bank took place implementing the National Financial may be necessary to prevent inflation on October 23, 2018. Inclusion Strategy, which aims to from persistently staying above the increase formal financial inclusion to target range,” he said. He said remarkable progress on the 80% by the year 2022. development of the Deposit Insurance The Governor further explained Bill, which is now expected to be on To support the financial inclusion that the Bank performed fairly well the agenda of Parliament next year efforts and in keeping with the with respect to its financial stability was also made. The Deposit Insurance consumer protection mandate, the mandate, wherein the financial sector Bill is a piece of legislation which will Bank intervened on bank charges was generally stable although asset provide some level of protection to and fees given the reluctance shown quality remained weak with NPL ratios depositors, thereby contributing to the by banks to address this matter since at 11.1% (11.98% - 2017) for banks stability of the financial system. 2003, when they were first engaged. In and 18.8% (18.5% - 2017) for Non- this regard, 26 bank charges and fees, Bank financial institutions as at end Some notable progress has equally deemed unwarranted, were abolished. November 2018. been made on the revision of the BoZ The Bank has now moved on to phase Act, which is expected to be passed by 2 of the exercise, which involves He said given the need to safeguard Parliament next year. The new Act is capping some of the charges and fees financial stability and to complement expected to strengthen the power and considered too high. monetary policy, attention to macro- autonomy of the Bank as well as its prudential policy increased during corporate governance framework and The Governor elaborated that the the year. He said The Bank made accountability to all stakeholders. The National Financial Switch (NFS) headways in a number of areas project, which started in 2008 with including strengthening: stress In the area of financial inclusion, the the objective to increase access and testing of the financial system against Bank continued to make strides in usage of financial services through bad shocks crisis management and advancing the agenda. It is estimated interoperability of payment platforms contingency planning frameworks; and that more people were reached this (ATM/POS and Mobile Money), finally the existing collaboration with other year through the financial literacy delivered its first results this year. regulators within the financial sector. and awareness campaign programmes Specifically, 12 out of 14 Banks (as at Story continues on page 16 Zambanker December 2018 15 Story continues from page 15 CENTRAL BANK VICTORIES 13 December) participating in the ATM Management Institute (MEFMI) to a role in conserving the environment. phase went live. provide capacity building programs Some of the Green initiatives to be and workshops on Gender Responsive undertaken include using solar energy, Further, the Bank continued to make Economic Policy Management next promoting paperless office initiatives, strides towards gender mainstreaming year. re-using and/or re-cycling items through various initiatives and before disposal, procuring goods from activities (e.g. FAMOS Check, Female In recognition of the fact that environmentally-friendly suppliers. Leadership Seminars, and Sex environmental damage and climate At its meeting on December 20, 2018, Disaggregated Data Collection Project). change have the potential to frustrate the Board also approved the Nepotism To facilitate significant progress efforts to achieve its primary objectives, Policy, which is aimed at strengthening in this area, the Bank has engaged the Bank has put in place a Green Policy. the banks’ corporate governance and the Macroeconomic and Financial This Policy will enable the Bank to play effective delivery on our mission.

AFMI 10 YEAR ANNIVERSARY WORKSHOP IN PICTURES

In 2008, the African Development Bank through its two complimentary transparency in African Bond (AfDB) launched the African Financial pillars: the African Financial Markets Markets for African Bond Markets Markets Initiative (AFMI) as part of Database and the African Domestic and Financial Sector Developmental.’ its strategy to develop the financial Bond Fund. The workshop was held at the Avani markets sector in Africa aimed at hotel in Livingstone, Zambia and contributing to the development of The AFMI held its 10th anniversary attracted a total of approximately 200 domestic bond markets in Africa workshop under the theme ‘Enhancing participants. Below are the photos from the event

16 December 2018 Zambanker African Institute for Policy Research (SAIPAR) received an honorarium for Professor Ernest Aryeetey, Professor of Economics at the University of SERVING THE Ghana who was guest of honour to the 2018 Lameck Goma Annual Lecture Series. Financial support was similarly provided to Choongo Inclusive School as contribution towards the School’s COMMUNITY Poultry Project, while St Mary’s Mother of the Redeemer Community School received a contribution towards the By ZAMBANKER REPORTER purchase of a school bus. Pillars of Peace received a donation to support In furtherance of its robust social corporate their work in building peace and unity responsibility activities, the Bank of Zambia made in Zambia. donations of various forms to 24 organisations in In the same quarter, Rufunsa Girls different sectors in 2018. Technical Secondary School got a shot in the arm with support towards the drilling of a borehole to avert an outbreak of waterborne diseases at the School while SOS Chilldren’s Village received support towards tertiary education scholarships for children at the village SOS Chilldren’s Village. Other beneficiaries were Habitat for Humanity Zambia for the 2018 Bankers Build Project; Ubuntu lab got help towards the hosting of a 3-day event in Lusaka and the Alick Nkhata Music and Art Foundation Ltd being contribution towards reviving the music of Alick Nkhata.

In the fourth quarter, a donation was made to the National Heritage Conservation towards the Mukuyu Assistant Director - Communications Mr Kanguya Mayondi with Bulungu Primary School administrators Tree surrounding area rehabilitation after donating computers to the school. works. The Zambia United Nations Freedom Fighters Association also received a donation towards the n the first quarter, three donations and Finance Conference. procurement of a printer and a laptop, were made to the health sector. while the Zambian Cancer Society They included a donation towards In the second quarter, the Bank’s received a donation towards the efforts by the Ministry of Health to philanthropic gestures were extended commemoration of the national breast Icurb the spread of cholera; a donation to Kafue General hospital with a and cervical cancer awareness month to the Medical Women Association donation of blankets and financial by sponsoring a golf team. of Zambia as contribution towards support towards the running of the the welfare of women and babies at Chawama Cheshire Homes. The Other donations were made to the the Chipata level One Hospital labour Central Bank also provided support International Association of Lions Club ward and logistical support given to towards the University of Zambia’s towards the Melvin Jones Children’s enable Dr Kachinga Sichizya attend Andrew Chimwano Memorial Prize Eye Hospital, the Christian Alliance for a skull base hand-on workshop in St awarded to the best student in School Children towards the running of their Louis, Missouri, USA. of Agriculture. various projects including the House of Moses orphanage and St Francis Outside the health sector, other In the third quarter, the United of Assisi Primary School towards the donations in the first quarter were Nations Population Fund received drilling of a borehole. The Sisters of St made to Kabulonga Girls Secondary Central Bank alms in form of chitenge John the Baptist were equally given a School towards the sinking of a material for distribution to vulnerable donation towards a broiler keeping borehole and requisite installations female refugees and other displaced project. as well as to the Zambia Institute of persons and families now resident in Banking and Finance (ZIBFS) towards Luapula province from the Democratic Clearly, the central bank’s long arm the hosting of the 4th Annual Banking Republic of Congo. The Southern touched a million souls.

Zambanker December 2018 17 WHY CHILIMBA IS NOT A PONZI SCHEME

By CHIBALE MAMBWE Following the closure of Heritage Coin Resources Limited by the Bank of Zambia (BoZ) in 2018 there has been a lot of speculation on various media from the members of the public on the legitimacy of the Chilimba savings/investment scheme. Many are wondering whether Chilimba is legitimate or it is just a matter of time before the BoZ move in to issue a cautionary statement. The BoZ, as regulator, on the other hand has been grappled with pressure from the participants in the various Chilimba schemes to give their position on the legality of the scheme. For others it is a question of why this traditional informal way of savings and investment has not been formalised Ms Chibale Mambwe

ith all that’s going on, promoter is derived from non- in 2016 in the United States of America perhaps an insight in salaried persons selling the product to escape designation as a pyramid the Chilimba could while the revenue of the seller is scheme. Regulators have determined help understand derived from the pyramid shaped or that MLM is not fraudulent if profits Wthe positions of the participants, binary compensation. (Wikipedia). are realised from sell of product or regulator and the public on this MLM has been around for over 100 service as opposed to recruitment of subject. years and is used by companies new clients. such as Herbal Life, Longrich and What is Chilimba? Avon. While MLM can be used by Pyramid Scheme any company and is a legitimate A multi-level marketing strategy marketing strategy based on A Pyramid Scheme (PS) is a business applied to savings, a pyramid scheme network marketing, it has been used model that recruits members via a or a Ponzi scheme are some of the to exploit people by luring them by promise of payments for enrolling terms that have been associated with the prospects of starting a business others into the scheme, rather than Chilimba whenever the question of from home and dream of financial supplying investment or sell of legitimacy come to the fore. Let me freedom. It is worth noting that products (Wikipedia). A PS is an start by looking at the three terms. MLM should meet criteria and the illegal investment scheme because seemingly absence of that criteria new recruits form the base of the Multi-Level Marketing such as earning income from sell pyramid and provide the funding or of products and not recruitment of returns in form of new money outlays Multi-level Marketing (MLM) is people result in the business being to the earlier recruits structured a marketing strategy for the sale classified as a Pyramid or Ponzi above them in the pyramid. While of products or services where the scheme. For instance, Herbal Life MLM involves selling of products, revenue of the MLM company or accepted to pay a fine of $200 million a PS does not involve selling of Story continues on page 19 18 December 2018 Zambanker Story continues from page 18 products or services and relies services are provided. losing their money somewhere down on the constant inflow of money the line where it may be practically from additional recruits. PS usually One of the ways in which people impossible to recruit new members. promise guaranteed high returns. At gain access to financial services Potential recruits in the Chilimba the beginning of the PS, the earliest informally is the Chilimba. Chilimba are usually family and friends or members do receive high payouts is a self-help way of assisting those neighbours which further limits from the money collected from new who are unable to raise the money the number of people that can join members and not a return from any required to finance a business or buy and the most vulnerable are the real investments. So the question is household items (Accounting Diary). members towards the bottom of the how does liability set in? Liability It involves members making agreed pyramid. One may argue that formal begin to exceed assets at the initiation contributions which are put together financial service providers like banks of the PS. Thus PS promise extra and given/lent to one of the members and microfinance institutions can ordinary payouts to new recruits as usually for a period of one month. face similar fate. While I agree, my the only way to receive money from Each member is entitled to receive opinion is that there is a difference additional recruits. the other members’ contribution plus because depositors face the same their own once every cycle and the risk of loss with a formal financial Ponzi Scheme cycle repeats when the last member service provider in the event of receives the contribution. loss. Thus, other things being equal, Ponzi Schemes are like pyramid the equal distribution of risk make schemes in many ways. They are Chilimba has existed on implied formal financial services better. based on fraudulent investment terms without any written down management service in which rules. Recently, there has been a Let me pause here and ask this investors pay into a business with a proliferation of organised forms of question, “once formalised and predetermined expectation of higher Chilimba schemes that have come registered by a regulator, how should profits. At the end of the investment to be known as village banking or a regulator handle the implied term, the business pays the investors savings groups that are providing assumption of the risk of loss from a from incoming funds contributed by financial services to meet the needs public policy perspective?” new investors. In a Ponzi Scheme of many Zambians. Some of these funds are revolved from one investor schemes have written down rules So, what are the takeaways from this to another without undertaking any and may operate differently from discussion? real investment. the traditional Chilimba. In some schemes members contribute money 1. Chilimba is not a Pyramid or Pyramid and Ponzi Schemes are self- and put it together and then each Ponzi Scheme, therefore, it is sustaining, as long as the number member is obliged to borrow a legitimate and legal. of recruits/investors continue to certain amount which should be paid increase and cash outflows match back with interest at the end of the 2. The sustainability of Chilimba is cash inflows. The thin line between month. In others, the money is put questionable and can be likened Ponzi/Pyramid Schemes and MLM is together and members that want to to that of a PS whose success that MLM offer legitimate products. It borrow are given the money which depends on recruitment of new is, however, not strange to see PS and they pay back with interest. members mainly drawn from Ponzi Schemes offering products but family and friends as well as with a very high usually unrealistic What is wrong with a formally religious and social groupings potential payout/returns. organised Chilimba? whose membership is finite. Thus, Chilimba is bound to fail Is Chilimba a Pyramid or Ponzi According to the Journal of Social and members at the end are Scheme? Development in Africa Vol 17 N0. likely to suffer the losses. 2 of 2002, the Chilimba though Armed with the difference between useful does not constitute real social 3. Formalising Chilimba can bring the three, we can now answer security scheme. Nevertheless, it has about cleavages which stem from the questions on the Chilimba the potential for being strengthened the different reasons for joining investment/savings scheme. as long as it remains informal or Chilimba and can lead to failure. semi-formal. This is because the The Fin Scope Survey Report of 2015, formalisation of the Chilimba into, 4. Notwithstanding the above, Geospatial Map of 2017 and several for example, non-governmental people should find out more other reports in Zambia indicate organisations such as village banks about the Chilimba, learn about that there is still a number of people and Savings and Credit Cooperatives the product being offered, do in Zambia that have little or no presents a possible danger of creating own research and ask family and access to formal financial services. cleavages ultimately leading to friends as well as experts before The informal ways of saving and collapse. Further, Chilimba just like deciding to join or invest. investing are still popular in many PS, Ponzi Schemes and MLM cannot places across the country. Some of go on forever (not sustainable) The author is Acting Senior Analyst the reasons for the popularity of because there is a finite number of – Liquidations in the Non-Bank informal financial services include people who can join the scheme which Financial Institutions Supervision flexibility and speed with which ultimately can result in some people Department.

Zambanker December 2018 19 THE LAW RELATING TO PONZI SCHEMES

By LUNGISANI ZULU

We all love to make a profit on our money, especially high profit over a short period of time. This strong desire for high profits coupled with relative ease of achieving same is what Ponzi schemers ply on to lure people to their Ponzi schemes which, in the long run only leads to financial loss for the investors and penal sanctions when they meet the long arm of the law.

Mr Lungisani Zulu

We all love to make a profit on our Services Act No. 7 of 2017 does define a public to subscribe to a Ponzi scheme. money, especially high profit over Ponzi scheme, but using the alternate a short period of time. This strong word of ‘money circulation scheme’. A It is interesting that from a legal desire for high profits coupled with money circulation scheme is defined perspective, the person who relative ease of achieving same is as a plan, arrangement, agreement or organises the Ponzi scheme as what Ponzi schemers ply on to lure understanding, between two or more well as members of the public who people to their Ponzi schemes which, persons that involves the pooling and put their money into the scheme in the long run only leads to financial distribution of funds by recruitment with the hope of a huge return are loss for the investors and penal of subscribers, and which, for its similarly guilty. There is therefore sanctions when they meet the long continuous existence and realisation no innocent victim in a Ponzi arm of the law. of its benefits, substantially depends scheme. on the incremental recruitment of In this write-up, I set out to discuss subscribers for an unspecified period. Since the organiser and the participant the law relating to Ponzi schemes and are similarly culpable, it becomes share some useful tips to help one From the above definitions, what is important for every member of the identify Ponzi schemes so as to avoid clear is that in Ponzi schemes, there public to be alert so that a genuine being entrapped in the same. is no underlining economic activity. desire to invest does not land one in Money merely ‘circulates’ from the prison. So what exactly is a Ponzi scheme? members who join the group last to the members who joined the group So what are some red flags for The United States’ Securities and earlier. Because the chances of being identifying a Ponzi scheme? Exchange Commission defines a Ponzi paid fast and more depends on the scheme as an investment scam that members who subsequently join the The United States’ Securities and involves the payment of purported group, every member of the group is Exchange Commission usefully returns to existing investors from strongly encouraged to recruit new highlights the following red flags: funds contributed by new investors. members. In a Ponzi scheme, organisers often „„ High investment returns with solicit new investors by promising to According to the Banking and little or no risk. invest funds in opportunities claimed Financial Services Act No. 7 of 2017, to generate high returns with little or conducting or participating in a An investment should ordinarily carry no risk. Ponzi scheme is a criminal offence. some degree of risk, and investments It is also a criminal offence to issue yielding higher returns typically Back home, the Banking and Financial a document inviting members of the involve more risk. “Guaranteed” Story continues on page 21 20 December 2018 Zambanker Story continues from page 20 investment returns or promises of Ponzi schemes typically involve You don’t want to be a victim of a Ponzi high returns for little risk should be investments that have not been scheme because apart from financial viewed skeptically. registered with regulators such as the loss, you also risk being penalised as Securities and Exchange Commission much as the organisers for merely „„ Overly consistent returns. or the Bank of Zambia. When the participating in it. Invest smart. investment promises high returns Investments returns tend to go up but there is no registration with As a rule of thumb for myself, if it and down over time, especially those regulators, be suspicious. is too good to be true, I don’t invest seeking high returns. Be suspicious unless I have verified all pertinent of an investment that generates Other red flags include lack of facts. You could take a leaf and consistent returns regardless of licensing by the organisers of the save yourself some headache. overall market conditions. investment as well as secretive and complex strategies and fee structures The author is Senior Counsel in the „„ 3. Unregistered investments. which are hard to comprehend. Legal Services Department.

CHRONICLES OF MUSAPENDA J. PHIRI ...Astute, driven and diplomatic

Who is Musapenda? because there is more to come was a name given to me by my grandparents I have often been described as someone to imply there were more children who is approachable (also attentive to come after me. It is also a name and a good listener), as someone traditionally given to warriors (as who is also ambitious (wants to get some people claim) – me being from excellent results but also somewhere the Ngoni tribe. in life) and with that as someone who is the go-to person to get things Tell us about your educational and done (and often calmly so even under nuclear family background pressure). Cool, calm and collected - some people have said. I asked a few As a young boy, I started my school in other colleagues to describe me in the United Kingdom (UK) where my three words for this feature article and father was on attachment and upon some of the feedback included terms our return, attended Lake Road School such as enthusiastic, easy to relate, and later Kabulonga Boys Secondary open minded, inspiring, resulted School. Thereafter, I went on to study oriented, decision maker, confident, Economics with Public Administration hardworking, approachable, minor at the University of Zambia meticulous, professional, convenor, (UNZA). I occasionally share with peace-maker, humorous, detail others that Dr Denny Kalyalya, the oriented, eloquent, capable, strategic, current Governor of the Bank of patriotic, ambitious, smart, and even Zambia, was one of my Economics trailblazer. In addition, astute and Lecturers at UNZA then and that I often driven but diplomatic. Their words looked up to him as an inspiration. and not mine. Now that one of my mentors has risen to become the Governor, I smile and So for those who ask me, Musapenda say that there is no reason why I too Joseph Phiri was born on 3rd January should not become Governor, one day 1973 in Lusaka, Zambia and is the in the future. first born in a family that has three brothers and one sister. My father, Since then, I have been awarded Mr Musapenda Phiri Martin Yengani Phiri (now late) a Masters of Science (MSc) in worked in the insurance industry for International Economics, Banking many years and my mother, Rustica and Finance from the University of with the United States (U.S) Federal Rose Ziwa Phiri, worked as a nurse Cardiff, in the UK. I have also received Reserve, in financial sector analysis in both the Government and private certifications in Corporate Governance; with the World Bank Training Institute sector. Musapenda which loosely in International Project Management, and among my professional highlights translated means ‘don’t stop counting’ in financial systems supervision certification in Strategic Leadership in Story continues on page 22 Zambanker December 2018 21 Story continues from page 21 CHRONICLES OF MUSAPENDA J. PHIRI

Musapenda J Phiri, Chairman of the Board of the International School of Lusaka (ISL) and Mr Mark Fox, ISL Head of School when they received Hon. Inonge Wina (middle) Republican Vice President during the United Nations Day at ISL in October 2018.

Inclusive Finance from the Harvard Economist, I have worked as a Bank for the job were simple – to make Business School – yes, the leading Officer for a commercial bank, and it happen! Well, five years later, global university, based in Boston, then as a Business Consultant for a Zambia’s financial inclusion level USA. I am also currently a candidate in Zambian consultancy firm where I increased from 37 per cent in 2009 my final research stage for a Doctorate undertook several regional integration to 59 percent in 2015 (surpassing the in Business Administration (DBA) with consultancy assignments in the Sub 50 per cent national target set by the the Binary University of Malaysia. But Sahara African region before joining Government). with all that, my advice is that you the central bank in 2002. have to continue to read, in order to During this period, I was priviledged lead. My first role in the Bank of Zambia in one year to attend in the USA the was as a Financial Analyst (or United Nations Session on Gender As I was finishing my fourth year Inspector - Financial Analysis) under and Women’s Financial Inclusion, on at the University of Zambia, I met a the Non-Bank Financial Institutions behalf of the central bank, as part of beautiful young lady, called Sumba (or Supervision Department. Since joining a Government Advisory delegation led Nyasumba in full), from Chingola in the central bank, I have worked in by the Zambian Minister of Gender. the Copperbelt Province whom after different assignments across the Further, having driven the financial courting for over 5 years married breadth and width of the central bank education agenda countrywide with on 7 October 2000. I reminisce about and bringing to fore a sound and other team members, I am also proudly the many visits during courtship diverse professional mix in economics, associated with Zambia receiving the covering hundreds of kilometers to the banking, finance, marketing, business Global Inclusion Awards (previously Copperbelt usually by bus, for which I management, regional integration and called the Child and Youth Finance jokingly say I would have garnered financial systems supervision. This International – CYFI Recognition tens of thousands of traveler miles as a strength resulted in me being tasked to Awards for financial education) for the frequent flyer had I had the resources be the Project Coordinator of Zambia’s Africa region for five consecutive years then to travel there by plane. Our Financial Sector Development Plan between 2013 and 2017. The awards mutual friends often laughed that (FSDP), Phase II, from 2010 - 2015, received by the Governors and Senior it must have been difficult for her a multi stakeholder national and Directors on the country’s behalf was to convince others in the early days donor supported financial inclusion testimony of the belief to always aim that she was now married because and reforms programme. This work high. And to those who wonder, I have her maiden name was also Phiri and encompassed national reforms in always said that this achievement was hyphenating her name as Sumba access to finance; financial education a consequence of a strongly committed Phiri-Phiri would not have made much and consumer protection; financial leadership at Government and central sense. Today, we have two children – a markets; contractual savings; payment bank executive levels as well as a great boy named Thando and a girl named systems as well as legal reforms team of technical staff that made this Towani. and policy making. While this was a reality. a mammoth task, I recall that upon What has been your work my appointment to lead this role Tell us about your latest rise experience? for facilitating increased financial inclusion, the Deputy Governor, then, I have since risen to become Assistant Following my first degree as an said to me that the terms of reference Director heading the central bank’s Story continues on page 23 22 December 2018 Zambanker Story continues from page 22

Mr Musapenda Phiri and his wife Nyasumba

Financial Sector Development of my boyhood). By the time the movie community building activities. I love Division. However, prior to this last was finished, just before mid-night, inspiring architecture and property promotion, and after having turned everyone in the house had gone to development and occasionally watch 40 years old, I passed through a phase sleep and the house was dead silent. soccer and motor sports. I believe of what I considered a light shining “I got up and walked into the corridor that I have been both priviledged and above my head. I was appointed to from the living room to go to bed. blessed to have travelled to many the first Board, at the International However, I felt dizzy and the next parts of my home country, Zambia, School of Lusaka; I was being courted thing, unknowingly, I collapsed with and to numerous countries across five to take over a senior role in the no one to hear or see me. To this day, continents of the globe (including to a executive of a national association I have no idea how long I had passed beautiful country called Tajikistan). I in Zambia (subject to election) as out for but when we went to see the believe in spending quality time and well as by a leading international Doctors the next day, the Specialist make it a point to take annual holidays organization who to my surprise there pointed out that in simple terms, and regular outings as often as I can. had called me out of nowhere to my brain had shut down and that it A few colleagues say I’m known for consider a role with them outside had later rebooted (with the grace of quoting to those I mentor that life is not the country as they had heard about the good Lord). And for the record of a straight line but that with the right my work. I was also being invited my good readers, I do not take alcohol attitude and hard work, nothing under to offer training and to give talks at so my passing out was by no means the sun is impossible. I also like to point numerous fora with several high out of that.” I opened my eyes and out that we cannot have all things at level people in society. And as if wondered why I was facing a all times and that there is a time for that was not enough, there were white ceiling from a cold floor in everything (my favourite quote from congratulations for several roles that the still of the night. I could see the Bible – Book of Ecclesiastes). were well done and comments of an open window nearby but total a deserving potential promotion at darkness through it. I had a sense Your last word to the Zambanker work. But as this perceived light was of confusion in my mind with no reader? shining, all this meant I was putting idea of where I was. What I didn’t in several hours of hard work with know at the time was that I had The changing moment in my life after late knock offs from work. collapsed earlier and had just my collapse taught me that life is to gained consciousness. be valued and one of my missions in Any near death experience? life is to mentor as many people as What do you do outside the work possible on how to have a successful So on one Friday evening, after a long area? career and full life. Having lost my day’s work, I got home late and after father to cancer 2 years ago, and both having supper stayed on to watch an Outside the work area, I am a member of my wife’s parents also to cancer old movie on television, one I had last of various associations, a Catholic who in the last few years, I encourage seen as a young boy. It was a 1980s has a strong faith in Christianity, a everyone to live and value a life of version of Superman, which was family man but one who also values ‘H, H and H’ - notably good Health, being aired after 22:00 hours (and I friendships and networks, loves to Happiness and Halleluyah (or God) enjoyed every bit of it with memories travel and ardently participates in as the cornerstones of our being.

Zambanker December 2018 23 PHOTO FOCUS

Delegates at the Dissemination Workshop of the 2018 Survey Results on Foreign Private (l-r) Assistant Directors in the Economics Department Mr Ivan Zyuulu and Mr Mulenga Investment and Investors at Taj Pamodzi Hotel. Musepa at the Dissemination Workshop of the 2018 Survey Results on Foreign Private Investment and Investors at Taj Pamodzi Hotel.

(l-r) Board Chairpersons of commercial banks Dr Austin Mwape - Stanbic Bank, Dr Jacob (l-r) Deputy Governor - Administration Dr Tukiya Kankasa Mabula receiving a hamper from Mwanza - Investrust Bank and Dr Caleb Fundanga - Standard Chartered Bank at the Royal the Board Chairperson of Zanaco Ms Charity Lumpa after the bank hosted the 2018 4th Dil after attending the Governor’s meeting. Quarter Governor’s meeting.

Former BoZ Board Member Ms Siphiwe Nkunika receiving a farewell gift from BoZ Governor BoZ Governor Dr Denny Kalyalya presenting a farewell gift to Mr Esau Nebwe, a former Dr Denny Kalyalya while Assistant Director - Communications Mr Kanguya Mayondi looks on. Board Member at the Bank of Zambia.

(l-r) Deputy Governor - Administration Dr Tukiya Kankasa Mabula, BoZ Governor Dr Denny Senior Internal Auditor Ms Bertha Chisola praying before the start of a function hosted in Kalyalya listening to former Board Vice Chairperson Mr Gilbert Temba at his Farewell honour of the former Board members. function in the BoZ Board Dining room.

24 December 2018 Zambanker PHOTO FOCUS

A delegation from the central bank of Madagascar led by second Deputy Governor Deputy Governor - Administration Dr Tukiya Kankasa-Mabula welcoming a delegation from Mr Niania Rabearivony, when they visited BoZ for a study tour the central bank of Madagascar in her office when they paid a courtesy call on her. related to Banknote Sorting Equipment.

BoZ Staff during the World Aids Day march past on 1st December 2018. Staff who took part in the World Aids Day march past.

(l-r) Minister of Finance Hon Margaret Mwanakatwe, BoZ Governor Dr Denny Kalyalya and Governor Dr Denny Kalyalya with VIP Protection Officer Mr Eliya Palata at the Ministry of Finance Permanent Secretary Mr Mukuli Chikuba at the IDA Avani Hotel in Livingstone. meetings in Livingstone.

Senior Economist Mr Jonathan Misapa and Mr Arnold Zulu from PMS at Learners and staff of Bulungu School in Mumbwa after receiving computers from BoZ. the Northern Province Expo

Zambanker December 2018 25 NATIONAL PAYMENTS SYSTEMS DIRECTIVES ...on DDACC & Funds Transfers...

By PAYMENT SYSTEMS DIVISION

These Directives may be cited as the National Payments Systems Directives on Processing of Direct Debit and Credit Clearing (DDACC) Instructions and Funds Transfers on the Zambia Interbank Payment Settlement System (ZIPSS), 2018. These Directives shall apply to Commercial Banks, Bank of Zambia and to any person conducting or offering to conduct the service of Processing of Direct Debit and Credit Clearing (DDACC) Instructions or funds transfers on the Zambia Interbank Payment Settlement Systems (ZIPSS).

he Bank shall be the not exceeding two following shall through Direct Debit regulatory authority hundred thousand be the minimum and Credit Clearing for purposes of giving penalty units or for a service standards (DDACC) or the effect to these Directives. term of imprisonment which shall apply Zambia Interbank TThe Bank may, subject to such not exceeding three to funds transfer Payment Settlement conditions as it may consider years, or both. The related services System (ZIPSS): necessary, delegate to any person the performance of any of the 1. Direct Credits Transmission and Settlement times powers conferred upon the Bank, in these Directives. The Bank may require a designated institution to furnish it with details of any of its operations. The Bank may require access to the designated institution’s operations, data and Agents. Each person providing funds transfer related services in Zambia through Direct Debit and Credit Clearing (DDACC) or the Zambia Interbank Payment * Instructions submitted after final cut off times that is 14:30 hours for electronic channels and 13:00 hours for manual instructions may be processed in session one of the next business day. Funds which are not credited to Settlement System (ZIPSS) the beneficiary customer’s account shall be returned to the originating customer’s account in the following session. shall: ensure that the person’s customers are aware of the 2. Direct Debits Transmission and Settlement times person’s obligations provided in Schedules I, II, III and IV; ensure that the person’s customers are aware of their obligations provided in Schedules II, III and IV; display Schedules I, II, III and IV prominently at every place where the person offers the service; comply with the person’s obligations stipulated in Schedules I, II, III and IV.

A person that contravenes these directives shall be guilty of an offence and shall be liable to a fine *A paying customer shall ensure that sufficient funds are provided on the respective account on the due date. Story continues on page 27 26 December 2018 Zambanker Story continues from page 26 2. Direct Debits Transmission and Settlement times settlement, which is a system that allows commercial banks to send funds to other banks in Zambia in real-time on behalf of their customers (individual or companies) or on their own behalf. The system does not have a minimum or maximum limit on the amount that can be transferred. The RTGS system is also referred to as the Zambia Interbank Payment and Settlement System (ZIPSS).

A sending customer of an RTGS/ZIPSS transfer has the following responsibilities: * Instructions submitted after final cut off times, that is 15:00 hours for electronic channels and 14:30 hours for ensure that the account is adequately manual instructions, may be processed on the next business day. Funds which are not credited to the beneficiary customer’s account shall be returned to the originating customer’s account in no later than one (1) hour after suc- funded for the RTGS/ZIPSS transfer to cessful settlement on ZIPSS. be effected; ensure that the RTGS/ZIPSS transfer instruction is time-date stamped The bank has the right to debit all funds wrongly credited into an when they manually deliver it to their bank; account including accrued interest thereon to correct the anomaly ensure that they provide correct details of without obtaining prior authority from the customer the following in their instruction: surname (if individual) or registered name of entity, Responsibilities for a customer debit arrangements if their financial first name(s) if individual, identification position does not support a standing number (NRC, Passport, PACRA Number, A customer requesting for a direct debit and order arrangement. Note that bouncing of TPIN), bank account number (13 digits). credit clearing (DDACC) transfer service has direct debit instruction attracts penalties the following responsibilities: ensure that in accordance with the National Payment Beneficiary’s bank details including their account is adequately funded for the Systems Act. In line with the National beneficiary’s name, full beneficiary’s bank DDACC transfer to be effected; ensure that Payment System Directives on Cheques account number (13 digits), beneficiary’s their DDACC transfer instruction is time- and Direct Debits (Issued on Insufficiently bank name as well as transaction details date stamped when they manually deliver Funded Accounts) 2010, a commercial bank such as amount to be transferred (both an instruction to their bank; ensure that shall: charge a penalty on an account for figures and words), description or purpose they provide correct details of the following every bounced direct debit instruction; of the transaction. Customers are also in their instruction including identification submit account details to the Credit expected to be honest and conduct sincere details, surname (if individual) or registered Reference Bureau for every bounced direct dealings on their bank account; ensure they name of entity, first name(s) if individual debit transaction and withdraw the direct subscribe to receive electronic notifications and identification number (NRC, Passport, debit mandate arrangement where a direct to track all account activities on their PACRA Number, TPIN or Service Provider debit transaction bounces three times in accounts; and ensure that they report Account Number in customer service twelve consecutive months. delayed transfers from their account that provider’s system (e.g. NAPSA, LWSC, are not processed within 24 hours from the ZESCO or DSTV, etc), bank account number RECEIVING/BENEFICIARY CUSTOMER time they are delivered to their bank. (13 digits) and phone number. A receiving customer of DDACC transfer has As beneficiaries of an RTGS/ZIPSS Beneficiary’s bank details including the following responsibilities: ensure that transfer, customers have the following beneficiary’s full names, beneficiary’s bank they provide correct details of their account responsibilities: ensure that they provide account number (13 digits), beneficiary’s to the sender/payer; that they are honest correct details of their account to the bank name, beneficiary’s branch name and conduct sincere dealings on their bank sender/payer; be honest and conduct or sort code as well as transaction details account; ensure they do not withdraw sincere dealings on their bank account; (Kwacha amount to be transferred (both funds that have wrongly been credited to ensure that they do not withdraw funds figures and words, description of the their account. They are also encouraged to that have wrongly been credited to their transaction and date of transaction being immediately report wrong credits to their account. Further, they are encouraged to paid for (Month and Year). It is also a Banks and to subscribe to receive electronic report wrong transfers and to ensure they requirement for customers to be honest notifications to track all activities on their subscribe to receive electronic notifications and conduct sincere dealings on their bank accounts. to track all activities on their accounts. accounts, subscribe to receive electronic notifications to track transactions. They also The bank has the right to debit all funds The bank has the right to debit all funds have the right to query funds transfers that wrongly credited into an account including wrongly credited into an account including are not processed as per service standards. accrued interest thereon to correct the accrued interest thereon to correct the anomaly without obtaining prior authority anomaly without obtaining prior authority Additional Responsibilities for a Direct from the customer. from the customer. Debit Instruction RTGS SYSTEM/ZIPSS CUSTOMER For this and more, please visit the For a Direct Debit Transfer, a customer RESPONSIBILITIES Bank of Zambia Website on www.boz. has the following additional responsibility: zm under Payment Systems Regulatory ensure that they do not sign up for direct RTGS stands for real-time gross Frameworks.

Zambanker December 2018 27 PROMOTING GIRLS AND WOMEN IN ICT

By MWABA C. KASESE

Acting Director – ICT, Ms Mwaba Kasese making a presentation on ‘Promoting Girls and Women in IT’ at a Lions Women and Girls Conference in November, 2018

1. PREAMBLE intelligence, IT companies made the Gender equality is a human right six biggest companies in the world in issue and is actually an agenda item We live in a digital age where Information 2018 in terms of market value. Apple at the United Nations (UN). With Technology (IT) impact almost every topped the list with a market value of specific reference to gender equality aspect of life, be it business or personal. US $926.9 bn followed by Amazon at US in Information Technology, former IT has evolved from the early days $777.8 bn. Secretary General to the UN, Ban Ki of huge computer mainframes with Moon quoted: limited processing capacity, running Despite this huge market share and business processes like Accounting latest innovations in the industry, “Supporting the participation of and payrolls, to include customer- women IT professionals seem not to women and girls in the ICT sector focused applications that can be run on be getting a fair share of the benefits. is (also) in line with United Nations smaller and mobile devices according This is because women are vastly Sustainable Development Goals (SDGs); to the particular customer’s needs under-represented in the Information in particular SDG 5, aimed at achieving and from anywhere. High availability Technology workforce globally. A gender equality and empowering all of ICT processing power, the inter- 2015 survey on women in leading women and girls through Information connectivity of systems, the internet international IT firms showed that and Communication Technologies’’. and other technological developments Google had only 17% women, Microsoft have promoted IT innovation resulting stood at 6.6% while at Twitter, only 10% The Department has, under the Bank in the development and release of a of the workforce were women. of Zambia Strategic Objective No. 4 wide range of IT products and services on Gender Mainstreaming, identified across various industries and sectors. Unfortunately, Zambia, and the initiatives and drawn up a Roadmap IT companies have taken advantage Bank of Zambia in particular, is no to assist in addressing this gender of the strategic reliance of IT and have exception. The ICT Department has imbalance in the Bank and the country invested in innovation resulting in been experiencing a serious gender at large. These initiatives are targeted huge returns on investment. According imbalance over the years and currently at addressing the root cause of this low to Statista, an online portal for stands at an appalling 6% female level of representation of women ICT statistics, market research and business representation. professionals as opposed to treating the Story continues on page 29 28 December 2018 Zambanker Story continues on page 28 schools. These include the following:

i) Stereotype

Society generally believes that science and mathematics are tough subjects that should not be taken by girls. While this myth is wrong and should not be condoned, it is generally imbedded in, not only men and boys, but also in women and girls themselves. This stereotype is exhibited in the different subjects that are offered to boys and girls which have a bias on gender especially in single sex secondary schools.

In some cases where a girl child has an interest in Mathematics and Science The best performing girl in Grade 10 Mathematics at Kasisi Girls Secondary School after receiving a tablet and certificate from Acting Director, Ms Mwaba Kasese. Looking on are the School Vice-Principal, Mr subjects; and exhibits potential in Chilimboyi and Mrs Mwanza Namwila Mwaba, Business Architect at Bank of Zambia. technical fields, she would be dubbed a ‘Tom boy’ and is discouraged by family and society from pursuing those interests.

ii) Cultural norms

Culture has negatively impacted the promotion of the girl child in taking up these subjects and performing well at school. In a typical Zambian home, the girl child is given responsibilities to perform house chores like cooking, cleaning up dishes in the kitchen and generally maintain the house. On the other hand, the boy child is not given as much responsibility (if any). This gives unfair competitive advantage to the boy child as he would have more time to read and study the so-called difficult subjects and he would, of course, Presentation to the girls in progress perform better than the girl child.

Even as parents, and without necessarily after-effects. The few women on the ICT market is as thinking about it in the gender context, a result of few girls and women taking we buy our girl children ‘barbie’ dolls 2. ROOT CAUSE up Computer and Engineering courses and teddy bears to play with and yet at tertiary education level, which can we buy the boy child more challenging, The Bank of Zambia, being an equal be attributed to girls not taking up technical-oriented toys or gadgets. opportunity employer, always Mathematics and Science subjects at encourages women to apply for ICT Secondary school level. We bring up our girl children in line jobs being advertised. In spite of this with accepted cultural norms in the good initiative, very few applications In short, girls do not have the right societies we live in. There are certain are received from women. Worse subjects required to undertake roles that are perceived to be for still, even fewer women applicants Technology programmes at institutions girls and not for boys and vice-verse. meet the required qualifications and of higher learning, resulting in even Unfortunately, these cultural norms experience to make the shortlist. fewer female graduates entering the stifle the potential that an individual Statistics from advertised ICT positions market. child may have, including those in in the recent past give an average of technical and engineering fields. 12% applications from women. These 3. CHALLENGES FACED BY THE GIRL statistics indicate the fact that there CHILD While most of these cultural norms are very few qualified female ICT are changing with the integration of professionals on the market. So what There are a number of factors that could foreign cultures and increased levels is the root cause that could have led to have contributed to girls shunning of education by the general populace, this under-representation? Mathematics and Science subjects in the effects of these deep-rooted norms Story continues on page 30 Zambanker December 2018 29 Story continues from page 29 PROMOTING GIRLS AND WOMEN IN ICT

Part of the girls who attended the presentation at Kasisi Girls Secondary School listening to the presenter

are still manifesting in various and through the Smart Zambia Initiative. to the high demands of IT work especially sometimes, unsuspecting ways. Unfortunately there is still not enough in IT Operations. Challenges in striking a access to computers in primary and work verses personal/family life balance iii) Competitiveness among different secondary schools especially in rural have been cited as a reason for change in gender Zambia. The girl child has not been career by some women. exempted from this inadequate access Boys are more competitive and assertive to technological resources where she This issue has in some cases been by nature compared to girls. Feedback could practice and enhance skills propounded by the lack of Flexible from girls who have taken up subjects needed in the technology academia and Working and Tele-commuting policies by and courses which are dominated market. most employers in the country. by boys shows that most boys do not take kindly to a girl beating them vi) Child marriages ii) Maternity Leave academically. Some girls found in such situations feel intimidated and bullied The high rate of child marriages, Some employers prefer employing men which could be detrimental to their especially in rural parts of the country, over women because the latter may at continued pursuance of these subjects has a negative impact on the education some point be required to take maternity and subsequent careers. of the girl child. The course to get more leave which unfortunately, is seen to be girls take up mathematics and Science detrimental to the achievement of their iv) Mentorship subjects is in turn, also affected, That objectives and work plans. girl who could have completed her Due to the limited number of women in secondary school has been denied the iii) “Mother’s day” IT in the country, there are inadequate chance to take up IT courses and later mentors and female role models to join the IT workforce by being married While the intention of introducing Mother’s encourage and guide the young women off at an early age. Day during the first Republic was good and girls pursuing careers in IT. This and its purpose justified, some women has resulted in girls who have doubts 4. CHALLENGES FACED BY WOMEN tend to abuse this facility resulting in work and not decided opting out of taking up IN IT being negatively impacted. This causes IT. friction and creates a negative perception The few women who make it into the on women employees by the employers v) Access to computers IT profession face challenges, some and supervisors. Unfortunately, even in specific to IT and others, as women cases when Mother’s Day is not abused, The government of the Republic of in general. Some of these challenges a women accessing this entitlement risks Zambia has introduced Computer include: being viewed as not being serious with Studies as part of the Curriculum at her work. lower secondary school level. Further, i) Demands of IT work Government has embarked on a iv) The Confidence Gap commendable programme to distribute Cases have been observed where women computers in schools across the country have had to change careers from IT due Men are naturally more confident and Story continues on page 31 30 December 2018 Zambanker Story continues from page 30

Acting Director - ICT confers with the best performer in Grade 8 Mathematics at Kasisi Girls Secondary School in December, 2018. Looking on are the School Vice- Principal, Mr Chilimboyi and Mrs Mwanza Namwila Mwaba, Business Architect at Bank of Zambia.

assertive than women. Surveys have missing out on opportunities by not v) Statistics have shown that there shown that a woman would take three going to the places where their male are more women users of social years to reach the same level of confidence counterparts go. media than men. If more women that a man would attain in one year. This application developers entered the means that a woman IT professional would 5. BENEFITS OF GENDER EQUALITY ICT industry, they would develop need to work extra hard at building that IN IT apps and solutions that would confidence and gaining trust from peers address requirements and issues and supervisors. Even in cases where a One might ask themselves what the facing women and girls. Women woman IT professional is confident and fuss is all about. Bridging the gender developers would understand competent enough, she has to put in more imbalance in IT would bring about women’s requirements better and work than her male counterpart to be some of the following benefits: they would develop more pro-women prove her worth. apps and services. i) Organisations that have gender The low confidence levels and the non-risk equality have been known to vi) Since IT is the enabler in almost every taking nature of women has disadvantage generally perform better that those sector, having more women in IT women as they lose out on promotion and that have gender inequality. would contribute to the achievement job opportunities. An analysis of personnel of gender objectives in other areas, records at an IT firm showed that women ii) Achieving a gender balance such as Financial Inclusion. applied for a promotion only when they in IT would be in compliance to felt that they had met 100% of the required the United Nations Sustainable vii) With the Digital Transformation qualifications and experience. On the Development Goals (SDG) #5. revolution, it is obvious that IT will other hand, men applied when they met become more prominent and a basic 60% of job requirements. iii) Women and girls would tap need in our lives and business. It can into the numerous opportunities that therefore be inferred that IT is the v) Networking opportunities for the IT industry offers which could future and as such, there will be a women lead to their empowerment and that ready job market for IT professionals. of their families and societies. The Investing in a girl child’s education There are limited opportunities for well-known common saying “When in IT would guarantee a Return on networking and social interactions for you educate a woman, you educate Investment. professional women in the country. the nation” surely applies to IT as well. Whereas men are free to interact 6. ICT GENDER MAINSTREAMING socially in different environments iv) An empowered women is INITIATIVES AT BANK OF ZAMBIA such as clubs, pubs, over a game of able to make tough, independent soccer or golf, society harshly judges a decisions that may be contrary to The Bank of Zambia Strategic Plan for the professional woman who attempts to norms in some societies such as period 2016-19 has a strategic objective take advantage of these social networks. encouraging her daughter to take aimed at mainstreaming gender in the It is a well-known fact that most deals up Mathematics and sciences at Bank and in the financial sector. This are made in social interactions. This school and becoming an IT Scientist objective is based on the belief that means that female IT professionals are or Engineer. promoting gender equity and equality

Zambanker December 2018 31 Story continues from page 31 PROMOTING GIRLS AND WOMEN IN ICT would positively contribute to social computers to an all girls’ school Furthermore, the Bank donated economic development in the country. that does not have a Computer Lab. exercise books and other stationary to the school. Posters on new bank Subsequently, departments in the 7. RECENT ICT GENDER EVENTS notes were also distributed among Bank have identified different the girls to make them aware of the initiatives and activities that would ICT Department participated in the enhanced security features on the contribute to the achievement of following events in the last quarter of notes. gender balance and equity in the 2018. Bank, in financial institutions and the Going forward, gender nation at large. i) ISACA ‘She Leads Tech’ Workshop mainstreaming activities will continue being undertaken on an on- In this vein, the Information and This workshop was part of the ISACA going basis in order to increase the Communications Technology (ICT) Conference held in in October, 2018 rate of success. It should be pointed Department at the Bank of Zambia at Radisson-Blu Hotel in Lusaka. out, however, that the outcome of has identified initiatives aimed at The ‘She Leads Tech’ programme these activities may only manifest promoting girls and women in ICT and aims to promote the participation of after a number of years when the at addressing the identified root cause women in Technology. ISACA is an girls being reached now graduate of the under-representation. These international organization which and enter the IT market. initiatives are being spearheaded provides services in ICT Auditing, by the Department’s Gender Focal Security and Governance. Deputy 8. CONCLUSION Persons, namely: Ms Mwaba C. Kasese, Governor – Administration, Dr Tukiya Acting Director – ICT; Mrs Mwanza Kankasa-Mabula gave the keynote The initiatives being undertaken by Namwila Mwaba, Business Architect speech which was delivered on her the Bank of Zambia are negligible in and Mr Paul Giver Sikalinda, Manager behalf by Ms Freda Tamba, Director relation to the magnitude of the issue. – ICT, based at Regional Office in – Non-Banks Financial Institutions If more people and organisations Ndola. However, all ICT members of Supervision. took up the challenge of addressing staff are encouraged to participate in the gender imbalance in IT, there gender mainstreaming activities. ii) Lions Women and Family would be a better chance of success. Symposium The gender mainstreaming initiatives You are all, therefore, being called being carried out by the ICT Acting Director- ICT gave a upon to take part in this noble course Department include: presentation on ‘Promoting Girls by doing any of the following: and Women in ICT” at this event i) Conduct career and motivational held in November, 2018 at the Cresta „„ Be mentors and encourage talks in schools in order to Golf View in Lusaka. The event was girls in your families and encourage girls to take up attended by women from various communities to take up Mathematics and sciences with a organisations and various topics on Mathematics and Sciences in view of later pursuing careers in IT. women were discussed. schools. „„ Challenge and do not practice ii) Award the best performing iii) Kasisi Girls Secondary School norms that work against the female students in Computers, promotion of girls and women in Mathematics and/or Sciences in In December, 2018, a team of ICT staff IT in our families, communities schools in form of ICT gadgets such comprising of Ms Mwaba Kasese, Mrs and at work. as laptops, tablets and other IT Mwanza Namwila Mwaba and Mr „„ Where possible, contribute devices. Allan Kakubo made a presentation to towards enhancing the girls at Kasisi Girls Secondary school availability of computers to girls’ iii) Hold quizzes with questions on in Lusaka. The presentation was schools that lack such facilities. gender issues and giving awards aimed at encouraging the girls to take „„ Participate in activities and for best answers and active up Mathematics and Science students events on this gender issue. participation in discussions. in order for them to be able to take up IT and Computer Science programmes Let us create a nursery of girls in iv) Identify girls and young women at university or college. schools to enter the IT market in the to mentor. future. At the end of the presentation, the v) Participate in workshops and best performing girl in Mathematics Remember, a gender-balanced IT other events falling under the in Grades 8, 10 and 11 were each industry will in the long run benefit general theme of Women and Girls awarded with a tablet. Ten other the Bank, the financial sector and in Technology. girls who actively participated in the ultimately, our nation. discussions or answered questions vi) Once a year and if available, correctly were also given “Bank of The author is Acting Director - ICT recommend the donation of used Zambia’ pocket diaries.

32 December 2018 Zambanker ACCESS TO FINANCE BY PRIORITY END-USER CATEGORIES

By JOSEPH MUNYORO & RICHARD CHIRWA

In the previous article, we gave an overview of the Credit Market Monitoring Programme (CMMP) and its importance in building a rich repository of credit data that allow credit access to be measured and assist in monitoring key trends, identifying emerging problems and the impact of regulation. The article also demonstrated the level of access to finance particularly by priority end-users who include women and borrowers in the rural parts Mr Joseph Munyoro of the country during 2017. Mr Richard Chirwa

n this article, we provide an Credit disbursement data from the (2017:96.7%) of the total number update on access to credit for CMMP indicates that ‘household and of loans disbursed and 45.4% these priority end-users for the individuals’ accounted for the largest (2017:37.7%) of the total value of credit three quarters to 30 September proportion of credit disbursements disbursed in the three quarters to 30 I2018. by both number and value in the first September 2018. The agriculture end- three quarters of 2018. Households user categories received the lowest Sectoral Distribution of Credit: and Individuals accounted for 69.2% proportions of credit disbursements. Figure 1: Sectoral Credit Disbursement

Agriculture -­‐ Agriculture -­‐ Large, 7.4% All Other, Small, 0.6% 0.3%

Households and Individuals, Business -­‐ Large, 45.4% 30.0%

Business -­‐ Small, Government, Source: CMMP 11.7% 4.6% Story continues on page 34 Zambanker December 2018 33 Story continues from page 33 ACCESS TO FINANCE BY PRIORITY END-USER CATEGORIES Provincial Distribution of Credit: in Lusaka and Copperbelt provinces. disbursements by value and 67.6% In 2017, these two provinces accounted (2017: 66.6) of the total number of Credit disbursement was concentrated for 75.8% (2017: 75.0%) of total credit loans disbursed.

Figure 2: Provincial Distribution of Credit Disbursements

100% 80% 60% 58.2 40% 20% 0%

Lusaka Copperbelt Southern Central North-­‐Western

Source: CMMP Eastern Northern Western Luapula Muchinga

Rural and Urban Credit: the number of credit agreements, the increases, indicative of a huge proportion of credit disbursements percentage of the rural population By value, credit disbursements to to rural districts increased to 25.6% that remains underserved in as rural end-users increased to 12.8% in 2018 from 24.6% of disbursements far as credit services provision in the three quarters to September in 2017. These are comparatively is concerned which the credit 2018 from 12.5% in 2017. In terms of very low proportions albeit some providers can tap in.

Figure 3: Credit Disbursement to Rural and Urban Areas

6.00

Billions Billions 5.00 4.00 3.00 2.00 1.00 -­‐ Q1 -­‐ Q2 -­‐ Q3 -­‐ Q4 -­‐ Q1 -­‐ Q2 -­‐ Q3 -­‐ Q4 -­‐ Q1 -­‐ Q2 -­‐ Q3 -­‐ 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018

Urban Rural Source: CMMP

Women’s Access to Credit: very low comparatively (Figure 4). Out of While there has been a marked rising the total value of credit disbursements trajectory in total credit disbursements, Notwithstanding some improvement in the nine months to September 2018, credit to women has not shown a similar observed in the access to credit by women 12.9% was to women compared to 12.5% trajectory over the last 11 quarters to 30 between 2018 and 2016, the level remains and 10.5% in 2017 and 2016, respectively. September 2018. Story continues on page 35 34 December 2018 Zambanker Story continues from page 34 Figure 4: Credit Disbursement to Men Vs Women – Number of Loans

Source: CMMP

Figure 5: Credit Disbursement to Women – Kwacha

7,000 Millions Millions 6,000 4,865 5,864 5,000 4,096 4,282 4,000 3,525 3,689 4,598 2,864 2,960 3,000 2,683 Kwacha millions Kwacha 1,979 2,000

1,000 472 565 605 569 281 325 387 334 210 644 819 -­‐ Q1 -­‐16 Q2 -­‐ 16 Q3 -­‐ 16 Q4 -­‐ 16 Q1 -­‐ 17 Q2 -­‐ 17 Q3 -­‐ 17 Q3 -­‐ 17 Q1 -­‐ 18 Q2 -­‐ 18 Q3 -­‐ 18 Source: CMMP Total Loans -­‐ Value Loans to Women -­‐ Value

The above statistics show gaps in Conclusion credit information for monitoring, terms of credit service provision analysis and policy formulation. to priority end-users which call for Overall, the CMMP Data collected for greater effort in order to narrow. the past 32 quarters to 30 September The CMMP Reports for 2016 and 2017 This gap further provides a major 2018 has shown high credit and the respective detailed credit business opportunity for financial disbursements concentration both data sets for the period 2016 to 30 services providers to tap in and in terms of end-users and geographic September 2018 are available on the improve their bottom lines and distribution. The CMMP also presents Bank of Zambia website: enhance economic growth through stakeholders in the credit market www.boz.zm. heightened economic activities. with much detailed and granular

Zambanker December 2018 35 FREQUENTLY ASKED QUESTIONS (FAQ) Prohibition Against Unwarranted Charges And Fees Directives

and fees? from the use of POS terminals.

The prohibition of unwarranted 9. What are the benefits of Point of charges and fees are aimed at Sale transaction? protecting the rights of consumers of financial services and promoting The benefits of POS transactions financial inclusion. Unwarranted include: charges fees have a negative effect on customers as they tend to discourage „„ Increased safety as the risk of theft members of the public from using and fraud is reduced. Paper based services offered by financial service payment instruments such as cash providers. and cheques are less secure; „„ Convenience provided by not 5.Has the practice of ATM carrying around cash; Mr Kanguya Mayondi surcharging always been prevalent „„ Reduced costs related to paper in Zambia? based payment methods such 1. What is an ‘Automated Teller as currency printing/minting, Machine surcharge’? No, surcharging has not always been cash handling, cash distribution/ prevalent in Zambia. However, in the transit, security and storage costs. An Automated Teller Machine (ATM) recent past, the Bank of Zambia has These cost benefits are expected to surcharge is an additional fee levied noted an increase in the practice of filter through to the customer; by an ATM owner and paid directly surcharging by banks. „„ Generation of business by the cardholder to the ATM owner. information; ATM surcharges are usually levied by 6. What is a Point of Sale (POS) „„ Ability to track and trace payments, the ATM owner on cardholders whose transaction? which will help to minimize fraud cards were issued by other banks. and increase revenue collection A POS transaction refers to the use for businesses and entities due 2. Are ATM withdrawal transactions of payment cards at a retail location to transparent and auditable now free for customers? (point of sale) to pay for goods and payment flows; services. „„ Reduction in the number of No, not all types of ATM withdrawal bounced cheques which have been fees and charges have been prohibited. 7. Are Point of Sale transactions free increasing despite introducing Only those fees and charges that have for the customer? charges on bounced cheques and been deemed unwarranted by the the criminalization of willful Directives are prohibited. However, the Yes, Point of Sale (POS) transactions bouncing of cheques. Bank of Zambia may deem additional are free to the customer. POS charges charges and fees to be unwarranted. and fees on a customer have been 10. Why does the Bank of Zambia prohibited by the Bank of Zambia under allow banks to over- charge 3. Will ATM owners offer ATM the Directives on unwarranted charges customers on interest rate? withdrawal services to other bank and fees. Therefore, a customer should cardholders for free? not be charged for making a payment Banks base their interest rates on their using a POS terminal. cost of funds and market conditions No, ATM owners will be compensated among other things. As a consumer for the use of their ATMs through ATM 8. Are Point of Sale transactions free protection measure, the Bank of interchange fee. ATM interchange is for the Merchant/Retailer? Zambia requires financial service a fee paid by the card issuing bank to providers to publish their interest rates the ATM owner as compensation for No, POS transactions are not free to the and charges and to display these at all the investment in the ATM and the Merchant. A Merchant is any person of their branches in order to enhance running cost of the ATM (security cost, who deploys POS terminals for the transparency. The expectation is that replenishment of cash, etc.). purpose of accepting payment cards competition among banks will allow as a means of payment. Banks are customers to shop around for rates 4. Why has the Bank of Zambia allowed to levy merchant fees because and conditions that are suitable to prohibited unwarranted charges of the benefits derived by Merchants them. Story continues on page 37 36 December 2018 Zambanker Story continues from page 36 11. Is it in order for a bank to extend a ‘basic savings account’ is prohibited. 14. What should a customer do when loan repayment periods on a loan A basic savings account will generally levied an unwarranted charge or citing that lending rates have gone have very low minimum balance, fee? up? limited withdrawals, usually once or twice per month and will accrue When a customer is levied an The majority of loans granted by interest at a rate that covers inflation. unwarranted charge or fee, the banks have variable interest rate, The account should have no charges customer should bring the matter meaning that each time the bank levied on it. Most banks offer to the attention of their Financial adjusts interest rates, the interest accounts which have some features of Service Provider. In a case where charged on a loan is adjusted. When a basic account but also incorporate the complaint is not resolved by this happens, the bank can either other benefits such as cheque books. the financial service provider, a increase the monthly loan repayment These hybrid accounts are not basic customer should bring the matter to to cater for increased interest, or savings accounts and may attract the attention of the Bank of Zambia. extend the loan tenure but maintain maintenance charges. the customer’s monthly repayment. For more information, please Most banks do the later so as not 13. Should a bank levy a charge on a contact; to overburden their clients with customer who receives funds from Communications Division increased monthly repayments. abroad? Bank of Zambia However, a bank should inform the Bank Square - Cairo Road customer when this happens. In instances where the international P.O. Box 30080 remitter has paid the cost for LUSAKA 12. Why are some banks still sending the funds, the recipient shall +260-211-399300, 260-212, 399 600, charging maintenance fees on not bear extra costs for receiving 260 971 270090, 260 971 270120 savings accounts? the funds into their account. In this [email protected] regard, the recipient should receive Website: http//:www.boz.zm The charging of maintenance fees on the full amount remitted. FINANCIAL INCLUSION AND THE EFFECTIVENESS OF MONETARY POLICY

By GODWIN SICHONE

The June-2018 edition of ZamBanker carried two articles relating to savings groups (SGs). The first was on “Formation of Women’s Savings Groups Increase” by Majory Mumba and the other was on “New Frontiers of Financial Inclusion: Leveraging Savings Groups” by Chipili Lumpa Mwaba and Musapenda Phiri. The two articles defined what SGs are and gave insights on the principles on which they operate and explained the Mr Godwin Sichone link between savings groups and the levels of financial inclusion. In this article, as a way of building on this background and linking it to the mission of the Bank, the focus will be on whether the levels of financial inclusion affect the effectiveness of monetary policy implementation.

inancial inclusion is the sector, including savings groups. The the quantity, availability and cost of level of access to and usage 38% level of formal financial inclusion money or credit in the economy. The of financial services by the is relatively low, in comparison to peer primary objective of monetary policy is adult population (16 years countries such as Zimbabwe (69%), Price stability, which is achieved when Fand older). As at 2015, the FinScope Kenya (67%), Tanzania (57%) and inflation remains low and stable. In survey measured the level of financial South Africa (83%). implementing monetary policy, there inclusion among Zambian adults at are three main ways through which 59.3% from 37.3% in 2009. Of the 59.3%, Monetary policy refers to the the Bank maintains price stability: 38.2% were formally included while measures or actions taken by the the remaining 21.1% were accessing monetary authority of the country (the „„ Interest rate channel. A change in financial services from the informal Bank of Zambia in this case) to alter the BoZ Policy Rate directly affects Story continues on page 38 Zambanker December 2018 37 Story continues from page 37 FINANCIAL INCLUSION AND THE EFFECTIVENESS OF MONETARY POLICY

banks’ lending rates given that the period (December 2015) 30% levels of financial inclusion have the Policy Rate is used by banks to lower at K1.1 billion. Consequently, stronger monetary policy transmission price their credit products; economic activity/output was mechanisms than economies with constrained, as acknowledged in the lower levels of financial inclusion. „„ Exchange rate channel. An Biannual Monetary Policy Committee What was also interesting about increase/decrease in the (MPC) statement for January – June the findings is that even though the Policy Rate should result in an 2016. What Mehrotra (2014) actually magnitude of the impact was lower appreciation/depreciation in suggests is that if the level of financial in low financial inclusion countries, the exchange rate, leading to a inclusion was much higher, say in the speed/lag of the impact was faster, decline/increase in consumer the region of 80% instead of 59.3%, that is, within the first quarter after prices the Bank would have achieved the the shock. same results of stabilising inflation by „„ Expectations channel. This adjusting the policy rate by a smaller Based on these studies, one would works through the expectations margin (less than 3 percentage points), hypothesize that the higher the levels economic players form about thereby having less negative impact of financial inclusion, the more the movements in key macroeconomic on liquidity and output. impact of a policy rate change will variables, for example, whether be on inflation. However, these the exchange rate will depreciate Lapukeni, etal (2015) did an empirical conclusions should be made with or appreciate. This has an effect analysis of quarterly data for Malawi caution because it is also very possible on prices. and concluded that an improvement that financial inclusion is correlated in the levels of financial inclusion with other aspects of financial Literature suggests that the leads to effectiveness of monetary development which may also affect effectiveness of monetary policy policy. The study revealed consistent the effectiveness of monetary policy. is affected by a number of factors, trends and some causality between one of which is the level of financial financial inclusion indicators and Conclusion inclusion. The Bank acknowledges inflation: the indicator for monetary this point by stating that the policy effectiveness. And contrary to If what literature is suggesting is instruments of monetary policy used economic theory, the study further anything to go by, the challenge for by a Central Bank depend on the showed that money supply had an the Central Bank is to ensure that the level of development of the economy, inverse relationship with inflation, financially excluded adult population especially its financial sector. This suggesting that the accounting of (40.7%) begins to access and use is testament of the link between monetary aggregates does not include financial services, especially formal. effectiveness of monetary policy and the activities of those outside the The Bank, in its 2016 – 2019 Strategic financial inclusion in that the level of banking system. Therefore, increased Plan set out to increase the level financial inclusion is a key indicator levels of financial inclusion would of formal financial inclusion by 16 of financial sector development. enable monetary policy to extend percentage points. Therefore, there is its reach to the financially excluded need to accelerate efforts in facilitating Mehrotra and Yetman (2014) show population. financial education and financial evidence that where financial inclusion, especially in rural areas, in inclusion is low, central bank rate Mehrotra & Yetman (2015) highlighted collaboration with various partners. moves have to be larger in order to the potential effects of financial Children and youths in schools and stabilise the economy after a shock. inclusion on monetary policy. The colleges also provide a good platform They also present evidence that the authors arrived at two key conclusions, for increasing understanding of greater the level of financial inclusion, first, that increased levels of financial financial concepts, including savings the more central banks are able to inclusion facilitates consumption practices; financial planning; lending stabilise inflation without affecting smoothing, as households have and loan repayment; risk management economic activity. easier access to instruments for and business planning and marketing. saving and borrowing, which may To put this into perspective, reference support the central banks’ monetary Future research on Zambia, that not will be made to the Bank’s reaction to policy. Secondly, they concluded that only includes financial inclusion the adverse movement in the annual growing financial inclusion is likely but other aspects of financial sector Consumer Price Index (CPI) inflation to increase the importance of the development, is encouraged as this in 2015, which accelerated to 21.1% interest rate channel of monetary would provide more understanding in December 2015 from 7.1% in June policy transmission as a greater share on the effect of financial inclusion 2015. In order to stabilise inflation, of economic activity is brought under on monetary policy transmission in the Bank increased the policy rate the influence of interest rates. Zambia. by 3 percentage points to 15.5%. This tight monetary policy stance Martin, etal (2017) , was able to show The author is an Economist and that the impact of a policy shock/ had implications on private sector Financial Sector Specialist in the credit, as commercial banks’ local change is more pronounced for high Financial Sector Development currency liquidity remained tight, financial inclusion countries, which Division at Bank of Zambia with average liquidity levels ending suggests that economies with higher

38 December 2018 Zambanker ENHANCING FINANCIAL EDUCATION THROUGH SIMULATION TRAINING

By ANGELA NJUNJU

People can run into great difficulty when trying to find their way through the maze of financial services on offer. The actual products themselves are sometimes very complex and difficult to fathom while advertising can be misleading, too. Most people generally do not understand how financial markets work. Some schools rarely teach this sort of knowledge often because the teachers themselves do not requisite financial competence.

Participants who attended one of the SBFIC training sessions.

n this complicated and The Savings Banks Foundation will run until 2021. frequently opaque world of for International Cooperation is a financial products, the topic of German organisation that is tasked to One of the chief objectives of SBFIC’s financial literacy is becoming disseminate successful savings banks projects is to reduce the risk of Iincreasingly important. Having a models across regional borders and poverty through financial education. basic understanding of the way in more than 30 countries around But it also has another wider social financial systems operate not only the globe, including several African objective in that it aims to teach helps people make better provisions countries. The SBFIC has been in values and shape the attitudes and for the future but also protects them partnership with the Bank of Zambia thinking patterns that underlie against excessive debt and dubious (BoZ) since 2012 to implement the financial decisions. Financial literacy lenders. Poor financial literacy is a National Strategy for Financial can be broken down into four areas: global phenomenon. The less money Education (NSFE). The purpose of this a person has, the more important it is partnership is to provide financial „„ Building assets to handle it judiciously. This explains education for Micro, Small & Medium „„ Dealing with debt why financial education has become Enterprises (MSME’s), marketeers, „„ Insuring against loss such a major topic in development farmers, private persons and „„ Handling money on a day-to-day cooperation and in German Savings employees of various institutions. basis Banks Foundation for International The first phase of the project ran Cooperation (SBFIC)’s projects. from 2012 – 2017. The second phase These four areas are a recurrent Story continues on page 40 Zambanker December 2018 39 Story continues from page 39 ENHANCING FINANCIAL EDUCATION THROUGH SIMULATION TRAINING theme throughout SBFIC’s otherwise management staff in areas such as of the revaluation, SBFIC has since varied and heterogeneous financial general bank management, sales and 2018 adopted a Direct Contracting literacy projects. risk management. On the customer model, which involves contracting side, SBFIC works with local partners trainers directly, giving them the SBFIC assists its project partners in to train micro and small enterprises, opportunity to find partners to train. developing countries and emerging farmers, as well as private individuals The trainings are conducted on a cost- economies to improve levels of basic using its Micro Business Simulation, sharing basis, with SBFIC covering literacy on site- for example in the Farmers Business Simulation and the all training costs of the trainer and Caucasus, Central Asia, Mozambique, Financial Planning and Budgeting. the partner covering the costs for Thailand and Zambia. At macro participants. level, SBFIC helps establish and hone Implementation of these trainings systems and structures in order in Zambia through the BoZ/SBFIC Results of the financial education to create the requisite enabling partnership project has over the years trainings for quarter 4 of 2017 to conditions. At the intermediate level, been carried out by implementing quarter 4 of 2018 it is working to establish institutions partners. Implementing partners that deliver basic and further training would have their members trained Microbusiness simulation training measures on a sustainable and stable by SBFIC master trainers through economic basis. And at the micro a Training of Trainers and after The Micro Business Simulation level, SBFIC supports individual certification, the members would is a highly interactive training, financial institutions with its tried- carry out these trainings. that enables micro- and small and-tested training and teaching entrepreneurs to grow their materials adapted to the local context. Despite meeting all the targets for the business and better manage their It also trains multipliers and provides first phase of the project, the end of finances. As at December 2018, the one-on-one coaching for managers. 2017 saw a decrease in the number project achieved 98 trainings for of trainings due to lack of funding by 2,174 participants in all provinces To this end, SBFIC employs its specially implementing partners. The decrease in Zambia, against a target of 1,000 designed business games crafted to in the number of trainings led to the participants by carrying out 50 coach intermediate and higher-level revaluation of the model. As a result trainings by 2021.

Number of Micro Business Simulation participants 900

800 780

700 700

600

500

400 303 300 241 200 150 100

0 4. Quarter 2017 1. Quarter 2018 2. Quarter 2018 3. Quarter 2018 4. Quarter 2018 Farmers business simulation and to sensitise them on various Since the second quarter of 2018, 84 financial products suited for them. trainings have been carried out with This is a board-based simulation The first trainers were trained in a total of 1,772 of participants. The aimed at acquainting farmers with January 2018. No training of farmers target was to train 800 farmers in 40 the factors of financial stability was conducted in the first of 2018. trainings by 2021. Story continues on page 41 40 December 2018 Zambanker Story continues from page 40

Number of Farmers Business Simulation participants since Q1-­‐2018 1000 900 800 700 600 910 500 762 400 300 200 [VALUE] 0 100 0 1. Quarter 2018 2. Quarter 2018 3. Quarter 2018 4. Quarter 2018 SBFIC will continue to carry out with the rollout of the country’s outcome from the various trainings trainings for the marketeers National Financial Inclusion Strategy conducted and will continue to programme and the financial (NFIS) and National Strategy on strengthen basic financial literacy planning and budgeting tools in Financial Education (NSFE). To date, through intensified trainings across partnership with the Bank of Zambia SBFIC is delighted with the positive the country. SITTING DISEASE

By MERCY WASOMWE

The term ‘Sitting Disease’ has been coined by the scientific community and is commonly used when referring to metabolic syndrome and the ill effects caused by sitting for too long. Research has shown that siting for as little as 30 minutes at a time without standing up or otherwise engaging in physical activity, causes the beginning of a cascade of events throughout the body. This translates in the longer run into a number of health concerns which include:

„„ Obesity „„ Varicose veins „„ Numbness „„ Increased blood pressure „„ Reduced brain function „„ Fluid retention „„ Diabetes mellitus „„ Neck and shoulder pain „„ Arthritis „„ Depression „„ Abnormal cholesterol levels „„ Cardiovascular disease, among others.

Story continues on page 42 Zambanker December 2018 41 Story continues from page 41 Some facts on Sitting Disease:

42 December 2018 Zambanker NEW FACES

By ZAMBANKER REPORTER

The Bank of Zambia has recruited and is currently pursuing a Bachelor Board Services Department received thirteen members of staff in the of Arts degree in Accountancy with three new employees. The names fourth quarter of 2018. the University of Lusaka. Ms Kafusha are Ms Lwanga Rachael Mwilu, Mr worked for BoZ as a temporary Note Nkatya Kabwe and Mr Leonard Departments that benefited from Examiner before formerly being Ng’andu Chilobe. the recruitment are Banking, employed as one. She also worked Currency and Payment Systems, as a School Bursar at Munso School Ms Lwanga Board Services, Procurement and before joining the Bank. Mwilu joined Maintenance Services and Human Board Services Resources. Mrs Nagirah Department on Matandiko 8th October, Banking, Currency and Payment Lubemba joined 2018 in the Systems (BCPS) Department received the BCPS team on Communications six new staff namely Mr Ismael 8th October 2018 Unit as Manager Bungwa, Mrs Patricia Kakuyungu, as a Teller. She Ms Gloria Kafusha, Mrs Nagirah holds a Diploma e-Communications. She holds a Matandiko, Mrs Suzyo Muyobela and in Banking and Master of Arts degree in Journalism Ms Donalia Tembo. Finance from and Media Studies and a Bachelor the Zambia Institute of Banking of Arts degree with honours in Mr Ismael and Financial Services and recently Journalism and Media Studies Bungwa joined completed her degree programme from the Rhodes University. She the Bank on in Financial Services with ZCAS worked as a consultant and served 8th October University. Before joining the Bank, in differednt roles including; Lead 2018 as a Note Mrs Lubemba worked for Atlasmara Communications Consultant at Examiner. He is bank as a Customer Service Officer. USAID/CSH, part-time Lecturer at the a ZICA Licentiate Evelyn Hone College, Relief Manager certificate Mrs Suzyo - Business Development at Securities holder. He Mbambara and Exchange Commission, Social worked for BoZ as a temporary Note Muyobela joined Media Trainer at the African Union Examiner and for the Franciscan BCPS on 1st Commission and as an Editorial Sisters Missionary of Service as an November 2018 Consultant at UNICEF before joining Assistant Accountant before joining as a Teller. She the Bank. She is a member of the the Bank. He is a member of ZICA. holds a Bachelor’s Zambia Public Relations Association. Degree in Mrs Patricia Business Mr Nkatya Katelema Administration from the University Kabwe joined the Kakuyungu of Lusaka and a Diploma in Marketing Communications joined the Bank from the Evelyn Hone College. Mrs Unit in the on 8th October Muyobela worked for Finance bank Board Services 2018 as a Note before joining the Bank. Department on Examiner. She is 1st November a ZICA Licentiate Ms Donalia 2018 as Manager Certificate holder and currently Tembo joined – Strategic studying CA – Zambia - Advisory the Bank on Communication. He holds a Master’s level. She worked for BoZ as a 12th November, degree in International Relations temporary Note Examiner before 2018 as a Clerk from the Universita Cattolica Del formerly joining the Bank. in the Payment Sacro Cuore in Italy and a Bachelor’s Systems degree in Communications from Ms Gloria Kaela- Division. the Edith Cowan University. Mr Lesa Kafusha She holds a Kabwe worked for Financial Sector joined the BCPS Bachelor of Deepening (FSD) Zambia as a Senior team on 8th Science degree Communications Officer before October 2018 as in Banking and Finance from the joining the Bank. a Note Examiner. Copperbelt University. Before She is a ZICA joining the Bank, Ms Tembo worked Mr Ng’andu Leonard Chilobe joined Licentiate holder for Atlasmara bank as a Teller. the Board Services Department as a

Zambanker December 2018 43 Clerk on 12th He is a member of the Zambia Before joining the Bank, she worked November Institute of Purchasing and Supply for various Government Ministries 2018. H e has (ZIPS) and Chartered Institute of with the last posting being at the a Diploma Procurement and Supply (CIPS). Ministry of National Guidance and in Records Religious Affairs. Mrs Mulembe is a Management Mr Nchimunya Malambo also member of the Zambia Institute of from the joined the Procurement Team as a Human Resources Management and National Procurement Officer on 8th October, Professional Secretaries Association Institute 2018. of Zambia of Public Administration. Before joining the Two new employees joined the Ms Sylvia Chilongo Bank, Mr Chilobe worked for the Human Resources Department as joined the Bank as General Nursing Council of Zambia Administrative Assistants. an Administrative as a Records Officer. Assistant on These are Mrs Caroline Nyambe 3rd December, The two new employees who joined Mulembe and Ms Sylvia Chilongo. 2018. She holds a the Procurement team are Mr Master of Science Mcdonald Nonde and Mr Nchimunya Mrs Caroline Degree in Project Malambo. Nyambe Planning and Management from the Mulembe joined Information and Communications Mr Mcdonald the Human University (ICU) of Korea. She also has a Nonde joined Resources Bachelor of Arts Degree in Library and the Bank as a Department Information Studies with Development Procurement as an Studies from the University of Zambia. Officer on 8th Administrative She also has a Diploma in Secretarial October, 2018. Assistant on and Office Management Studies from He holds a 26th November, the Evelyn Hone College. Before Bachelor of 2018. She holds a Master of Science joining the Bank, she worked for the Science Degree Degree in Human Resources Economics Association of Zambia, in Purchasing Management and a Bachelor of University of Zambia and the Zambia and Supply from the Copperbelt Arts Degree in Human Resources Revenue Authority as a secretary. University. He worked for Zambia Management both of which are from She is a member of the Professional National Building Society as a the Mulungushi University. She also Secretaries Association of Zambia Procurement Officer - Capital has a Pitman Advanced Secretarial and the Library and Information Items before joining the Bank. Certificate from TVTC in Luanshya. Association of Zambia.

By ZAMBANKER REPORTER SEPARATIONS Nine (9) members of staff have Guest House at Regional Office at the of his separation. Mr Lubumbe separated from the Bank through time of his separation. He separated joined the Bank on 13th November, Statutory Early Retirement, from the Bank through Statutory 2006. Voluntary Early Separation Scheme Early Retirement on 29th October, (VESS), expiration of contract and 2018 after working for over 26 years. Mr Arnold resignation in the fourth quarter of He joined the Bank on 1st June, 1992. Zulu worked 2018. as a driver in Mr Charles Procurement Four of the nine former employees Lubumbe and who separated from the Bank were separated Maintenance from Regional Office, three from from the Services Procurement and Maintenance Bank after the Department at Services Department and two from expiration of Regional Office Human Resources Department. his contract at the time of on 15th his separation. He separated from Those who left from Regional Office November, the Bank through Voluntary Early are Mr Ronald Bwalya, Mr Charles 2018 after Separation Scheme (VESS) on 26th Lubumbe, Mr Arnold Zulu and Mr working for November, 2018 after working for 15 Percy Ntema. Mr Ronald Bwalya 12 years. He was a cook at the Guest years. He joined the Bank on 19th worked as an Office Assistant at the House at Regional Office at the time November, 2003.

44 December 2018 Zambanker Mr Percy Ntema years. He joined the Bank on 16th lost two employees at Assistant worked as a November, 1992. Director level in the names of Section Officer Mr Evans Mayuni and Mr Martin – Compliance, Mrs Maureen Chasha. Statements Machaliwa and Records separated Mr Evans in Banking, from the Mayuni Currency Bank through separated and Payment Statutory from the Systems at Early Bank through Regional Office at the time of his Retirement VESS on 5th separation. He separated from on 12th October, the Bank through Statutory Early November, 2018 after Retirement on 28th December, 2018 2018 after working for after working for over 32 years. He working for over 29 years. She joined slightly over joined the Bank on 20th March, 1986. the Bank on 14th November, 1989. 26 years. She was an Administrative Assistant He was Assistant Director – Shared Those who left from Procurement at the time of her separation. Services and Employee Relations at and Maintenance Services (PMS) the time of his separation. He joined Department are Mr Lukanga Ms Jean the Bank on 1st June, 1992. Muzeche, Mrs Maureen Machaliwa Kasumba and Ms Jean Kasumba. worked as an Mr Martin Office Services Lisati Chasha Mr Lukanga Officer in PMS resigned from Muzeche Department at the Bank on worked in the time of her 31st October, the PMS separation. 2018 after Department She separated working for as a Store from the over 2 years. He Keeper – Bank through was Assistant Issuing at the Statutory Director time of his Early Retirement on 15th – Human separation. November, 2018 after working for Resources He separated 27 years. She joined the Bank on Administration and Organisation from the Bank through Statutory 25th November, 1991. Effectiveness at the time of his Early Retirement on 6th October, separation. He joined the Bank on 24th 2018 after working for over 25 The Human Resources Department February, 2016.

BoZ NEW TELEPHONE LINES The Bank of Zambia wishes to inform you that the Bank’s telephone numbers have changed. In order to gain access to the Bank of Zambia, the new telephone numbers are as follows: ZAMTEL Bank of Zambia (Head Office, Lusaka) +260 211 399300 Bank of Zambia (Regional Office, Ndola) +260 212 399600

AIRTEL Bank of Zambia (Head Office, Lusaka) +260 971 270090 Bank of Zambia (Regional Office, Ndola) +260 971 270120

MTN Bank of Zambia (Head Office, Lusaka) +260 963 884820 Bank of Zambia (Regional Office, Ndola) +260 963 885580

Issued by: Head of Communications, Bank of Zambia P.O. Box 30080, LUSAKA

Zambanker December 2018 45 46 December 2018 Zambanker Zambanker December 2018 47 48 December 2018 Zambanker