By KALONDE NYATI
THE revocation of the statutory instruments (SIs) 33 and 55 is expected to enhance investor confidence in the country, a business and investment analyst says.
Cuthbert Malindi said the policies that were speedily implemented had eroded investor confidence but Government’s move to revoke the SIs after continued calls by stakeholders to do so will help restore confidence.
Last week, Minister of Finance Alexander Chikwanda announced the revocation of SI 33 of 2012 aimed at prohibiting quoting in foreign currencies, and SI 55 of 2013, which monitored monetary inflows and outflows.
“The implementation of SI 33 and SI 55 followed ‘hot on the heels’ of the increase in capital adequacy requirements for banks and capping of interest charges on banks as well as microfinance institutions.
“When you combine all the above measures and [make] changes in a short-run, you create a level of uncertainty that makes investors and markets jittery and nervous about Zambia regardless of the political basis for such decisions,” he said.
Mr Malindi said while the SI 55 was designed to capture some foreign entities that were under- declaring sales, the instrument negatively affected the business community.
“While [under-declaring sales] might be true, I would argue that this is a case of ‘throwing a wide net to capture a couple of sharks’… in the end innocent ‘small fish’ have ended up as casualties,” he said.
He said this in response to a press query in Lusaka yesterday.
Mr Malindi said some of the policies implemented recently have contributed to the Kwacha depreciation as this resulted in low foreign exchange inflows in the country.
“Over the last two and half years, I am convinced, as many are that the various pronouncements, inclusive of SI33 and SI 55 have contributed to a more than fair degree. Unfortunately, the main victims of the devaluation of the currency have been small and medium scale and individuals who happen to be net importers of goods and services,” he said.
He said the decision by Government is key in ensuring the stability of the Kwacha thereby strengthening the local businesses in the long-run.