
The mandate of the Bank of Zambia (hereinafter referred to as ‘the Bank’), as provided for under the Republican Constitution (Amendment) Act No. 2 of 2016 and Section 5 (1) of the Bank of Zambia Act, No.5 of 2022, is to formulate and implement monetary and supervisory policies that achieve and maintain price and financial system stability.
In pursuing this mandate, and as provided under Section 44(4) of the Act, the Bank hereby introduces the Stability and Resilience Facility (hereafter referred to as ‘the Facility’ or ‘SRF’) to safeguard financial stability and enhance the resilience of the financial sector in the wake of the 2023/24 drought.
The drought has adversely affected food production and hydroelectricity generation significantly, leading to food insecurity and extended periods of load shedding. These have had cascading effects on the economy with high potential to compromise financial system stability. As food and energy prices increase, inflation has been on the rise while the growth rate for the economy in 2024 has been revised downwards to 1.2 percent from the 2.3 percent projection made in July 2024.
Under the Facility, the Bank will provide liquidity to eligible Financial Service Providers (FSPs) for onward lending to viable businesses in the agriculture sector and those negatively impacted by the current electricity shortages. The facility is, therefore, expected to contribute to the broader mandate of the Bank of Zambia of supporting and engendering price and financial system stability. Under the Facility, clients with existing facilities, including those obtained under the TMTRF, can access the funds as long as they meet the specified terms and conditions. However, this should not be for the purpose of refinancing such facilities. Source: Targeted Long-Term Refinancing Operations