Isaac Muhanga on Driving Innovation and Digital Transformation in Zambia’s Financial Sector

Yeah, I think that is a very important question.

The way I would want to answer it is by reminding people Our mission is to conduct monetary policy and also to conduct supervisory policies.

On the monetary policy side, our objective is to maintain price stability.

And price stability is measured by the way inflation rate is developing.

And then when it comes to supervisory policies, we are more concerned about the stability of the financial system.

Just to say a little bit about monetary policy and why we get concerned with the matter

of price stability.

Price stability is when prices in the economy generally are not increasing too fast in such a manner that it erodes people's incomes.

And we call that in our palace as inflation.

I know that sometimes there is a confusion between inflation and the price level.

So prices over time increase.

And what our concern is, is how fast those

prices are increasing.

Increases in prices has its own literal advantage, but because it has to sustain businesses.

You know, businesses have to make some money for them to continue employing, for them to continue expanding.

And so the way they get sustained is by incrementally at some point when prices generally increase in the world economy or global economy, they also have to increase.

But then those increases should not be so high that it erodes people's incomes.

Because if it does that, then we are creating poverty among the citizens.

So Behind what we do, there are people.

So monetary policy, yes, sometimes sounds technical, but every decision that we take into account, we think about the people at the end of it all.

I think it benefits everybody.

if prices are increasing at a very slow pace.

Right now, we are talking about inflation that is between 6% and 7%.

What does it mean in simple terms? It means that something which was costing A particular price, say 100 kwacha, one year ago is now costing 107 kwacha in general, on average.

Before that, we used to have prices that were increasing at 25-30% per year.