High interest rates are a sign of a struggling economy and act as a brake on future growth. Their continued rise shows us all is not well and that urgent action is still required to fix the economy, says UPND leader Hakainde Hichilema.
The latest hike comes from ZANACO Plc, which is increasing the rate on its personal loans to 37% from 1st July.
Commenting on the hikes, HH said, ‘whether you personally want to take out a loan or not these high rates affect us all and present a serious problem for Zambia.’
He said ur future prospects depend largely on the ability of local businesses to start-up and grow, expanding and strengthening our economy, meanwhile generating revenues to invest in education, healthcare, water and sanitation and other such areas. Job creation, our top priority, also depends directly on industry growth.
‘When interest rates are high firms cannot borrow to invest in expansion, which would create jobs. When interest rates are high firms cannot borrow to invest in productivity or saving measures that would make them more competitive and result in lower prices for their consumers.
‘If we want to lower these rates then our leadership must be ready and willing to take control of the reins of the economy, not just to try and sit out the current malaise. Bringing the rate of inflation under control must be a priority, as should supporting our Small and Medium-sized Enterprises (SMEs) through ensuring a favourable environment for doing business.’