Published: 09 May 2014

The World Bank has stressed the need for the country to prioritise prudent fiscal policies and the strengthening of financial supervision of the local banking sector.

In a presentation during the recently held SAPES Economic Conference held in the capital, World Bank economist Nadia Piffaretti said given the current low level of domestic savings, the high cost of business and high cost of capital there is need for the adoption of prudent fiscal policies and the strengthening of financial supervision.

Economist Kipson Gundani believes apart from ensuring financial services sector supervision, there is need for restoration of confidence in the banking sector while supporting the productive sectors of the economy to improve the liquidity situation.

"It is true that we need to adopt sound supervision of the financial services sector. However, we also need to look at the liquidity position and see how best we can stimulate activities within the productive sectors," he said.

In its April 2014 report, the World Bank highlighted the banking sector's vulnerabilities as one of the challenges that needs attention.

According to the bank, the country's 2014 growth projections will depend on how fast government moves to address macro-economic vulnerabilities and improve the capital inflows. 
- zbc

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