A study of the Effectiveness of the Monetary Policy Rate as a Tool of Inflation Control in Zambia

The importance of a stable and favorable rate of inflation cannot be over emphasized. The main aim of the study was to assess the effectiveness of the Bank of Zambia Policy Rate in maintaining favorable inflation levels in Zambia. This study investigated the relationship between the policy rate and the rate of inflation in the country. This study included the analysis of specific economic data for the period April 2012 to December 2014. The study involved the review Bank of Zambia fortnightly reports for the stated period; Monetary Policy Rate, Inflation Rate and Exchange Statistics were extracted from the reports and two models were built to mimic the period before the implementation of the policy rate and the period after. Exchange rates were used as a control variable. The interpretation of the models showed that the policy rate had little or no impact on the rate of inflation as the variations in the rate of inflation due to those in the policy rate were already explained by variations in exchange rates. The study further proposed recommendations to improve the management of inflation. Keywords: Monetary policy rate, Inflation control, Monetary Polic

A Study of the Viability of Zambia Co-Operative Federation (ZCF) Installed Solar Milling Plants in Zambia

This portfolio thesis is aimed at critically evaluating the viabilities of the Solar milling plants and thought process of cooperatives in rural areas on repaying back of loans using pragmatic action research. This thesis contributes to the empirically and theoretically based understanding of, the impact of the presidential funds in Zambia. A case study of Solar Milling plants across Zambia via ZCF. This study was a participatory in nature, hence, a cross sectional approach was undertaken in the first half of 2016, 2017 and part of 2018 to access primary, district and provincial corporative responses regarding viability of the solar milling plants in the community and to ZCF. In the results, several findings were established which tried to satisfy the objectives of the study. The correlation model revealed that there was a significant difference in between monthly target and monthly recovery fund.  A weak relationship was found between the two variables that indicate differences exist between the two groups. This implies that a The viability of solar milling plant and loan recovery is low and not very feasible. This result was found to be significant with p values less than 0.05 and the entire model was significant at p-values (0.0387<0.05). Regarding the factors related to Zambia Co-operative Federation (ZCF) Debt recovery on the installed solar milling plants in Zambia were revealed to repayment history, capacity of machine, Binding cooperative contract, raw material and system of recovery, OR=0.8494, p=0.001.  It was also found that despite minor difference these factors were established to directly related to debt rectory. Recommendations have been made to ZCF management to also provide resources for the cooperatives who are managing the milling plants with startup capital to buy maize and packaging materials for the mealie meal and also provide tools for recovery officers to use when following up loan payments from cooperatives. The need to train cooperators on corporate governance, book keeping so that there is comprehensive general accountability

World Bank, International Monetary Fund and United Nations Led Democratic Governance and Economic Development Campaign: Can Africa Speak One Voice?

The subject of democratic governance and economic development is currently of critical importance in various fora of debate in Africa. This paper discusses the subject with respect to the voices of Africa’s academia. The paper discusses the subject in the context of Western world-Africa interaction since the early 1960s when the fight for political independence by African countries was at its peak. The paper also discusses the subject around modern economic development thought, defined as that which emerged in the mid 1940s when the World Bank and the International Monetary Fund (IMF) were created by the United Nations Organisation (UN). The paper observes that while there has been consensus in the Western academia on critical subjects like the one under discussion in this paper, in the African academia such consensus is missing, making it difficult for the later to give policy guidance on such critical issues. The paper calls for consensus in the African academia on issues critical to the economic development of Africa. To this effect, the paper makes a proposal of how consensus can be reached with particular reference to the World Bank, IMF and UN-led democratic governance and economic development. From this example consensus on other critical issues can be reached. Keywords: Good Governance, Democracy, Economic Developmen

Development of the international monetary system conditions of globalization

This paper outlines the modern trends in the development of the international monetary system in conditions of financial globalization. The paper establishes that the international monetary system has evolved through different stages necessitated by various economic crises at different periodic intervals. It is noted in the paper that despite the inefficiencies in the current dollar denominated international monetary system developed countries are reluctant to do any reforms. However, International monetary system reform is obvious and most likely will happen under the growing crisis in the international financial systems and credit relations. It is proposed that countries look at new innovations that will make international transactions cheaper and less risky.peer-reviewe

An Assessment of the Economic Effect of Industry Clusters on Economic Development in Zambia - A Case Study of the Lusaka South Multi Facility Economic Zone

This paper sought to assess the economic effect of industry clusters in the Lusaka South Multi Facility Economic Zone (LS MFEZ) on economic development. The objectives of the study were: to investigate the factors that promote economic growth in LS MFEZ, to determine the economic contribution of the industry clusters in LS MFEZ and, to investigate the constraints faced by the firms operating in LS MFEZ. The major findings of the study were that the firms operating in the LS MFEZ were influenced by aspects related to reduced costs of operations, access to advanced technologies and reduced transaction costs. The study observed that the LS MFEZ contributed to the creation of employment for both skilled and unskilled labor. Further, the study revealed that operations in the LS MFEZ promoted the growth of the transport sector and strongly contributed to local and international trade. The study was also informed of various constraints faced by the firms operating in the LS MFEZ and these included huge capital requirements, inadequate infrastructure, and lack of other essential services such as electricity among others. The research recommended skill trainings for local workers as well as a policy that supports the financing and infrastructure development for the industry clusters

A Study of the Effects of Treasury Funding on Efficiency of the Implementation of the Farmers Input Support Programme (FISP) in Zambia

The importance of the success of the FISP and E-Voucher system are that it may result in an increase in income in rural areas, an increase in production and hence the food reserves in the food basket and for individual families and will also provide a means to contribute to GDP in the economy in efforts to diversify the economy. However, the study noted that there existed several challenges regarding implementation of the program. The overall objective of this study therefore was to assess the effect of treasury funding on the implementation of FISP in Zambia. The study took into consideration respondents in the Ministry of Agriculture that are directly involved in the FISP program and receiving funding from the treasury. The study made use of primary data. The study finds that the treasury does engage the Ministry of Agriculture and all relevant ministries, units and departments in obtaining estimates in a consultative forum before providing these estimates in the national budge. However, the study outlines that there are delayed payments from the treasury that affect implementation and therefore preparation and production of farming output. Nevertheless, the study findings further note that challenges in implementation however are not limited to delays in funding by the treasury but the extent to which resources are allocated to the program as opposed to other Ministry activities that would further support the implementation of the program. This is because about 80 percent of the resources are dedicated to the success of the program. The study further outlines that a possible solution would be contract farming and private extension services, however, these would have a restricted reach as they are motivated by ensuring profit. This would render the rural poverty alleviation activities strained

A Study of the Strategic Responses of Commercial Banks to Changes in the External Environment in Zambia

Banking sectors play a crucial part in the growth of an economy. As a result, the banking sector's stability is critical to an economy's growth. Commercial banks are faced with external environmental changes that may render negative as well as positive impacts on commercial banks. Strategic management is one of the key corner stones of any business institution that needs to compete favourably in a particular industry and respond to changes in the external environment. Crafting strategies to suit changes in the external environment is one principal goal of every organisation whose aim is to remain competitive in the market, generate profits and attain growth. This investigated response strategies to external environment (economic changes, technological changes, and social-culture changes) of commercial banks in Zambia. Descriptive research approach was used with 38 questionnaires distributed. Only 20 questionnaires were returned and correctly answered, representing 52.6% response rate, enough to draw conclusions and recommendations. Data analysed quantitatively in SPSS and Microsoft excel with result values presented using percentages, averages, and means. The results revealed that commercial banks did not respond to social-cultures changes in consumer behaviour in Zambia. However commercial banks responded to economic and technological factors, which led to closure of some branches and bank merges. To that end, commercial banks adopted various response strategies to respond to the changes. Strategies adopted included stability and expansion while no commercial bank adopted retrenchment strategy. Commercial banks should not only concentrate on stability strategies, but also use other strategies such as expansion and retrenchment strategies to survive the harsh external turbulence. Management of commercial banks should take advantage of advances in information and communication technology that enhances service delivery and meeting customer needs. Banks need to constantly scan the environment using various tools like SWOT, Research and Development and PESTEL in order to be aware of changes in the external environment and prepare for it

A Study of the Effects of Mobile Banking Services on the Financial Performance of Zambian Commercial Banks - A Case Study of Atlas Mara

This paper sought to determine the effects of Mobile Banking Services on the Financial Performance of Zambian Commercial Banks focusing on Atlas Mara as a case study. The study endeavoured to determine the impact of mobile banking access, mobile banking loans and mobile banking risks on commercial banks' financial performance. The study made use of descriptive research design. Atlas Mara Zambia's senior and middle management staff as well as supervisors made up the study's target population. A total of 287 bank employees were chosen as a sample using purposive and stratified random sampling. The Bank of Zambia, the Zambia Communications Authority, and the Atlas Mara Annual Reports provided secondary data, while structured questionnaires completed through Google online forms were used to collect primary data. Data analysis was carried out using descriptive and inferential statistics. Regression analysis and Pearson Correlations were used to analyse quantitative data. The study results show that, despite the fact that mobile banking accessibility and mobile banking loans have improved the financial performance of commercial banks, their success is still threatened by mobile banking risks related with the Internet and technological innovation. The study suggests that in order to improve the strength of the Internet and network coverage across the entire country, the banking industry should engage with telecommunication service providers. Commercial banks should look beyond improved accessibility and start assessing how well mobile banking's customer service functions. Commercial banks should spend money raising consumer awareness of new goods and services designed specifically for mobile banking. Commercial banks should allocate enough funds to research that could support the development of new products for use with current mobile banking platforms

A Study of the Effect of Foreign Exchange Rates on the Financial Performance of Power Utility Companies in Zambia: A Case of Copperbelt Energy Corporation Plc

Just like other sectors, energy sector in Zambia has faced exchange rates volatility for a long time. Research has shown that Zambian kwacha has been unstable and that it has been depreciating. This study aimed at assessing the effect of foreign exchange rates on the financial performance of power utility companies in Zambia as a result of the devaluation of kwacha. It was an empirical study as the researcher sought to gain knowledge by using quantitative data. Purposive sampling was used in selecting Copperbelt Energy Corporation Plc and secondary data used in the study was extracted from the company’s published audited financial statements. Regression analysis using GraphPad software and Microsoft tools were used to analyse data and findings were presented in tables and graphs. The main results of the study showed that foreign exchange rates had an effect on the financial performance of CEC Plc. Whenever kwacha depreciated, financial performance of the company went down and vice versa. The results further, suggests that there was a medium positive relationship between foreign exchange rates and key financial performance indicators. Henceforward, it was recommended that CEC Plc should ensure that foreign exchange risk management techniques such as money market hedge, exposure netting and hedging with invoice currency are used to minimize foreign exchange risks. It was also recommended that further studies be done in this sector using other financial performance indicators which were not employed in this study to increase the knowledge base

A Study of the Effect of Changes in the Statutory Reserve Ratio Requirement on Commercial Banks Profitability in Zambia

The study was aimed at studying the effects of changes in the Statutory Reserve Ratio Requirement on commercial banks profitability in Zambia between 2007 to 2017. Time series data, namely, monthly data was used throughout the 11-year study. The study included data from all Zambian commercial banks operating from 2007 to 2017. The study used EViews version 10, for data analysis. Statutory reserves and bank profitability in Zambia were studied using the Autoregressive Distributed Lag (ARDL) model. This research sought to objectively determine how statutory reserves affect bank performance. Performance was measured by ROA. The study found an inverse relationship between statutory reserves and financial performance of commercial banks in Zambia.  Beyond statutory reserves, the research also considered the impact of other bank-specific variables on profitability. Specifically, it observed that inflation and open market operation balances exerted negative impact on the commercial banks' performance. Additionally, the study unveiled an important aspect related to the time horizon for adjustment. The speed of adjustment from short-run dynamics to long-run equilibrium was estimated at approximately 62%. After changes in statutory reserves and other variables, Zambian banks tend to reach a long-term profitability equilibrium point. These findings affect Zambia's banking industry and regulators. It emphasises the need to balance regulatory requirements like statutory reserves with commercial bank profitability. This research advances monetary economics and lays the groundwork for future research due to the changing financial industry and regulatory environment