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HH urges support for local business following interest rate rise

Filed under: Business,Latest News |
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Hakainde Hichilema

Hakainde Hichilema

UPND leader Hakainde Hichilema has called on Government to provide support to Small and Medium Enterprises (SMEs) in light of the recently announced increase in interest rates.

 

Hichilema wants Government to cut the red tape and reduce the bureaucratic burden for SMEs so they can make savings elsewhere.

 

On Tuesday, the Bank of Zambia announced an increase in the base lending rate from 12.5% to 15.5% in a bid to arrest inflation that has shot up 100% over the past month. The current inflation rate stands at 14.3%.

 

Commenting on the development, Hichilema expressed concern that the interest rate rise will present yet another impediment to the growth of SMEs.

 

“Our concern now is that the interest rate rise presents yet another hurdle for our SMEs in growing their businesses. What is even more worrying is that the interest rate cap has been removed, soon, banks will start charging 50% interest rates and see what happens then to the loan portfolios for both companies and individuals. Zambia’s business environment is no longer conducive to doing business and the next thing that will happen is that new investments will not be forthcoming. Without new investments and the existing investments being constricted by loan obligations, people will lose jobs. This interest rate adjustment is coming at a time when power cuts are rampant and the kwacha is so unstable. What kind of economy are we creating?” The opposition leader said in a media statement.

 

“Small and Medium-sized Enterprises are the lifeblood of an economy wherever you go in the world. And as our population expands we need to support these local businesses and entrepreneurs to flourish and catalyse job creation and economic diversification so we can move towards a sustainable growth model in which every Zambian has the opportunity to succeed and make a decent living. Zambia has now completely killed the middle class the was coming up from 2002 onwards. These are the people that accessed loans to create employment for others. But we have killed them, so who will consume the goods and services?

 

“Government needs to recognise the burden of these challenges and move assertively and confidently to resurrect confidence in its ability to plan and manage the economy. This means clear and concrete communications between State House and the public so that information is shared on how long these circumstances can be expected to persist and how the Government is working to relieve the burden on business. The current situation where Government hides behind press statements and prayers serves no one but themselves,” he explained.

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