Commercial banks should tone down their greed in foreign currency dealings where the buying and selling rates have very big differences, Finance Minister Alexander Chikwanda has said.
Mr Chikwanda implored the private sector especially the banking sector to act responsibly by helping to grow the economy.
He was speaking at a Deloitte working breakfast on the 2016 national budget discussion.
“The Banks should tone down on their greed, for example on the foreign exchange areas, the gap between the buying and selling rate is really very big, can’t the banks tone down on areas like that to help the economy grow?
“We hope there will be more responsible behaviour from banks to ensure they look at illicit transfers and activities of their customers,” Mr Chikwanda.
Mr. Chikwanda called for concerted national effort to grow the economy in the face of challenges caused by the commodity price crush.
The Government, he said was determined to maintain strict discipline in expenditure. The Government he said, would not spend more than what was budgeted to avoid massive borrowing and deficits which would add to the already existing economic constraints.
Mr Chikwanda said less borrowing would force the private sector into developing innovative programmes resulting to economic activities.
“We hope that there will be no excessive and no supplementary estimates because if we spend more money than budgeted for we will again go to massive borrowing when there are already constraints on the local market,” he said.
Mr Chikwanda said Government would continue providing incentives for the private sector to expand more because it was an engine of development and generated more jobs. “If we over borrow, it means that we are crowding out the private sector which is the engine of development and where we expect more jobs to be generated, jobs will not be generated by Government just by blowing the establishment which is already considerable.
“We will provide incentives for the private sector to expand more and we hope that if we borrow less, this will trigger downward movements in the interest rates,” he said.
Meanwhile, Mr Chikwanda said it was impossible for Government to include everything needed in one budget, but that at least it set the framework for the fiscal year 2016.
Mr Chikwanda said it had not been an easy exercise to put together the 2016 budget because of the conflicts between resources available and what was need by way of expenditure.
“The expenditure is pegged at K53 billion and total locally available revenue is put at K42 billion, so you have that gap which has to be financed and part of it will be financed by internal borrowing which we will limit to 1.2 percent of the GDP and the other K6 billion will be borrowed from eternal sources which assumed that we have capacity to borrow within the limits set by parliament,” he said.
He said Government would finance the 2016 budget gaps by some of proceeds from the Eurobond that had not been utilized during the course of this year.
Mr Chikwanda said the fiscal consolidation would enhance fiscal prudence and roll back fiscal irresponsibility which was a major thrust of the budget.