FELIX Mutati says the coronavirus pandemic has worsened issues of tight liquidity in Zambia.
But the former finance minister agrees that the interventions that have been put in by the Bank of Zambia for the re-financing facility are going to assist businesses, even Small and Medium Enterprises, to create capacity.
Mutati, in an interview in Lusaka, explained that once companies, during this COVID-19 period remained operational and retained staff, that would help to facilitate liquidity in the economy.
“Yes, there are efforts that are being made but ultimately the HIPC-style [debt relief] will be the one that will answer on a much more sustainable and longer term business,” he said.
“The issues of liquidity have been made worse by the instance of coronavirus. [But] the interventions that have been put through by the Central Bank for the re-financing facility are going to assist businesses, even SMEs (Small and Medium Enterprises), to create capacity for them to be able to access that facility.”
Mutati lauded the government for starting to dismantle arrears to suppliers of goods and services.
“But the call is that if we can boost the level of dismantling of arrears, that will boost the liquidity in the market,” noted Mutati.
“The efficiency with which we do our tax refunds so that that money goes back into business and this will have an impact in boosting liquidity, it will have an impact in making sure that the companies survive and continue to create jobs. When you create jobs, you are actually facilitating liquidity.”