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Zambia takes back Libya-owned Zamtel, knocks off three zeros from the kwacha

Time Posted: January 23, 2012 4:10 pm
Alexander Chikwanda

Alexander Chikwanda

Zambia will take back a 75 percent stake in local fixed-line operator Zamtel that is currently held by Lybia’s LAP Green Networks, Finance Minister Alexander Chikwanda said on Monday.

“We made a decision to restore Zamtel back to the people of Zambia,” Chikwanda said at a media briefing.

“The plight of the workers may be affected temporarily but we are trying to put up something permanent. If we find Zamtel is not adequately capitalised we will avail fresh capital.”

Zambia last week seized bank accounts belonging to Zamtel as part of a money-laundering investigation. The company has denied any wrongdoing.

Under its previous government, Zambia sold a majority stake in Zamtel to the Libyan operator for $257 million. A government inquiry in November ruled that 2010 transaction illegal.

Chikwanda also said Zambia would rebase the kwacha currency by lopping off three zeros, a move that should make it easier for foreign investors to participate in the economy,

“The rebasing had to be done when all the fundamentals like inflation and GDP growth were right and we think they are now right,” Chikwanda said.

Currency rebasing usually does not change the exchange value of the currency and is introduced to make commercial calculations easier.

The rebasing might be kwacha positive “to the extent that it is a continued commitment to low, and stable inflation”, said Razia Khan, head of Africa research at Standard Chartered.

The kwacha was last trading at 5,120 against the dollar from 5,123 at the end of last week.

Government would also raise commercial banks’ capital requirements to 104 billion kwacha, and 250 billion kwacha for foreign commercial banks from 12 billion kwacha to make them more resilient to economic shocks.

“The measure to raise the minimum capital is intended to mobilise additional resources to enable banks participate more effectively in growing the economy by increasing credit available to the private sector,” Chikwanda said.

[Reuters]

145 Comments

  1. vote
    flag Chief says: Chief
    January 23, 2012 at 4:14 pm |

    Good move PF and you should also introduce coins.

    Reply
    1. vote
      flag MrK says: MrK
      January 23, 2012 at 8:03 pm |

      1 Chief,

      ” Good move PF and you should also introduce coins. ”

      Copper coins. Now there’s a thought. :) Open a few mines from windfall taxes from the mines as well, and the country will actually start to benefit from it’s natural riches.

  2. vote
    flag fufu says: fufu
    January 23, 2012 at 4:14 pm |

    Good news about Zamtel, but knocking off those zeros is a matter of digging deeper in people’s nearly-empty pockets. Lets wait and see.

    Reply
    1. vote
      flag mp says: mp
      January 24, 2012 at 10:13 am |

      @fufu no one will dig in your empty pockets we just need to make things easy to handle.
      aleluya

  3. vote
    flag VITUMBUWA says: VITUMBUWA
    January 23, 2012 at 4:15 pm |

    People starting digging up your money before it is worthless.

    Reply
  4. vote
    flag michael says: michael
    January 23, 2012 at 4:16 pm |

    Very Clever! I have a sneaky suspicion that this move is not purely economically motivated. Interpreted politacally, all what it means is that if you have burried money under-ground then you are in sh*t because that money will be worth nothing, unless you decide to go to the bank to change it for the new currency. And if you go to the bank with more than K 1 billion kwacha cash and fail to account for it, then you are in sh*t. Smart way of killing off MMD political opponents. These Government guys know that what was found on Liato’s farm is just the tip of the ice-berg. There are people will mountains of hidden reserves out there. Watch the space…(Just my opinion).

    Reply
    1. vote
      flag mucala says: mucala
      January 23, 2012 at 4:59 pm |

      Interesting opinion!

    2. vote
      flag The Jackal says: The Jackal
      January 23, 2012 at 5:20 pm |

      I like your opinion mate, sounds very realistic!

    3. vote
      flag SDA (satanist Devil Advocates) or bitter UPND says: SDA (satanist Devil Advocates) or bitter UPND
      January 23, 2012 at 6:41 pm |

      l can use my 1000 relatives to clean the money at k900 000 000 they get the k100 000 just belong a billion

    4. 0
      -1
      vote
      flag Maxwell says: Maxwell
      January 23, 2012 at 6:51 pm |

      #4.3
      Are all your 1000 relatives all trust worthy???

    5. vote
      flag Truth teller says: Truth teller
      January 24, 2012 at 3:44 pm |

      Why go with 1Billion to the bank?…they will probably distribute the money to family and friends…who will change it into dollar on their behave…

  5. vote
    flag Chali says: Chali
    January 23, 2012 at 4:19 pm |

    This is very good, well done PF. Lets send a Message to the international Community that we have no room for corruption. We do not need dirty and stinking investment. Take that investment somewhere else. Learn from this

    Reply
  6. vote
    flag Bigben says: Bigben
    January 23, 2012 at 4:20 pm |

    What is the implication or ramifications of dropping the three zeros. Can someone explicitly explain so that we are all clear.

    Reply
  7. vote
    flag janet c says: janet c
    January 23, 2012 at 4:21 pm |

    Ba Chikwanda – thanks for giving back to what belongs to them! It is about time african politicians stopped selling their countries and people for the equivalent of sugar and salt, just like they did during slavery

    Reply
  8. vote
    flag PF Cadre with Red Card says: PF Cadre with Red Card
    January 23, 2012 at 4:24 pm |

    Good news. thats why we voted for you.

    Reply
    1. vote
      flag Hopeful says: Hopeful
      January 25, 2012 at 1:38 am |

      Well said. Time to empower your own countrymen is now. Let us erase this mental slavery of blindly empowering foreigners.

  9. vote
    flag Jay Jay says: Jay Jay
    January 23, 2012 at 4:25 pm |

    Bravo on Zamtel…also postive as the statement is coming from Finance Dept not State house, rebasing the kwacha is also long overdue and very welcome!!

    Reply
  10. vote
    flag Ugly Truth says: Ugly Truth
    January 23, 2012 at 4:26 pm |

    Rebasing of the currency is long overdue,We asked former BOZ governor when he visited here and he assured that was going to be done.This Zamtel thingy is becoming nuisanse,get it or shut up.

    Reply
  11. vote
    flag Ichipwa says: Ichipwa
    January 23, 2012 at 4:27 pm |

    Our departed kwachas and ngwees will begin to resurrect from their graves.

    Reply
  12. vote
    flag Kanele Box one says: Kanele Box one
    January 23, 2012 at 4:28 pm |

    Smart move. Bring back the coins. So that we can be buying fuel at K7 per litre. Burying money notes from Liato and many more MMD cadres will be rendered useless to keep. VIVA PF. Those who want to kilitisaizi go ahead now.

    Reply
  13. vote
    flag ZaMule says: ZaMule
    January 23, 2012 at 4:28 pm |

    Our departed kwachas and ngwees will begin to resurrect from their graves. Nice move baPF.

    Reply
  14. vote
    flag Matac0 Yanjoka says: Matac0 Yanjoka
    January 23, 2012 at 4:29 pm |

    Sneak in an ugly face on the new notes! ok dont even think about it.

    Reply
    1. vote
      flag mp says: mp
      January 24, 2012 at 10:19 am |

      @14 you sick you should have respect for elders.

  15. vote
    flag SO WAT says: SO WAT
    January 23, 2012 at 4:31 pm |

    Awe Pf is a blessing to Zambia. God bless Michael sata. Add more years to him.

    Reply
  16. vote
    flag Maxwell says: Maxwell
    January 23, 2012 at 4:32 pm |

    Great mr. minister Vitumbuwa will now cost 10 Ngwee like back in the day!!! kekekeeke

    Reply
  17. vote
    flag good citizen says: good citizen
    January 23, 2012 at 4:32 pm |

    only people on lusakatimes are appreciating the move, Tongas on the watchdog are on the opposte

    Reply
    1. vote
      flag SDA (satanist Devil Advocates) or bitter UPND says: SDA (satanist Devil Advocates) or bitter UPND
      January 23, 2012 at 6:45 pm |

      best we change its name to tonga watchdog then

    2. vote
      flag Jobby says: Jobby
      January 24, 2012 at 9:30 am |

      You are spot on my dear. The reason their party is having difficulties crossing the Kafue river

  18. vote
    flag Airtime Sakala says: Airtime Sakala
    January 23, 2012 at 4:33 pm |

    Yaba! Imagine the queues – from the village! Anyway viva 20 ngwee

    Reply
  19. vote
    flag Monk-net says: Monk-net
    January 23, 2012 at 4:34 pm |

    \:d/ thanks on Zamtel. Three zeroes… Kaya???

    Reply
  20. vote
    flag kabungo musonde says: kabungo musonde
    January 23, 2012 at 4:36 pm |

    How does this reduce poverty in the nation? 

    Reply
  21. vote
    flag good citizen says: good citizen
    January 23, 2012 at 4:36 pm |

    :d:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d:d

    Reply
  22. vote
    flag Samuel says: Samuel
    January 23, 2012 at 4:36 pm |

    I only hope the debasing of the currency is not for PF to siphon out monies as the new currency is being introduced so that their Party Head Quarters and the payment of full time Party workers is facilitated.It is only about four months ago when PF could not buy campaign chitenge materials because they were cash strapped but they can now boast of building party headquarters,employing on full time basis District and Provincial Secretaries.Where has the windfall come from?

    Reply
  23. vote
    flag TKZee says: TKZee
    January 23, 2012 at 4:37 pm |

    :d

    Reply
  24. vote
    flag Maxwell says: Maxwell
    January 23, 2012 at 4:38 pm |

    #15 Lol..Bitterness will erase those people it bad for your health, god help them!!

    Reply
  25. vote
    flag Matac0 Yanjoka says: Matac0 Yanjoka
    January 23, 2012 at 4:38 pm |

    Japan never bothered to do that ,thier currency devalued following the second WW, they just stabilised it and left the zeros.

    Ok, Zimbabwe took off the zeros before just trashing their currency all together. We can take Zimbabwe’s lead, no malice intended.

    Reply
  26. vote
    flag RudeMonk says: RudeMonk
    January 23, 2012 at 4:39 pm |

    Imwe munachitako tuma economics does this sound good enough or not. I am sceptic and still thinks that its a cosmetic move. I do not see any economic value in this desperate move. I end here!

    Reply
    1. vote
      flag Reality says: Reality
      January 23, 2012 at 4:58 pm |

      its a good move. the number of zeros in currency to some extent shows the inflation in the country. look at usa their highest note is 100…. 

    2. vote
      flag Manyai says: Manyai
      January 23, 2012 at 6:10 pm |

      The number of zeros shows historical inflation, and not current inflation.  As somebody correctly pointed out elsewhere, Japan stabilised their Yen and did not rebase it.  Italy did the same to their Lira before they went into the Euro.  Having lots of zeroes does not mean that your currency is weak.  It just means that it was once stronger and some disaster struck along the way.  You can continue rebasing a plummeting currency, like they tried with the Zim dollar, and never stabilise it.  What is important are the current economic fundamentals.  Are they really that rock solid??

  27. vote
    flag iron lady says: iron lady
    January 23, 2012 at 4:44 pm |

    Trying to confuse us and cover up the ever depreciating kwacha.districts are being made for no budget line …..awe mwandi

    Reply
  28. vote
    flag Bob says: Bob
    January 23, 2012 at 4:45 pm |

    Mozambique has successfully done the same to her currency. Could be a good move.

    Reply
  29. vote
    flag Tekton says: Tekton
    January 23, 2012 at 4:45 pm |

    Rebasing the currency is utter rubbish. If this is the best idea that the government can come up with then i say fire the governor of the BOZ as well as the minister. For those not educated enough who are supporting this stupid idea, let me enlighten you to the circus that people in Zambia are being introduced to. Do you remember the days that you used to need a jumbo bag to carry money, well now is the time to throw the wallet away and prepare what South Africans call the Shange bag, those masaka bags with multiple colours that traders from Zambia come with from SA. Just to explain my rational above for you to have K600 000 you need 12 K50 000, however with the rebasing which does not change the exchange rate you will now nee 12000 of the K50 new note, that my friends mean get a huge bag.

    Reply
    1. vote
      flag Osho says: Osho
      January 23, 2012 at 5:30 pm |

      You are very dull. The Purchasing power will not change. The items that K600,000 used to buy will now be purchased with K600. What K600,000 can buy in the new currency will be equivalent to what K600,000,000 can buy in the old currency. Think before posting.

    2. vote
      flag Bazambia says: Bazambia
      January 23, 2012 at 6:40 pm |

      You don’t seem to understand what debasing is all about.Purchasing power will remain the same. If you have K600,000 its value will now be K600. A commodity currently selling at K600 000 will now sell at K600. DON’T SHOW AS YOUR IGNORANCE.
      YES if I’m to use your reasoning, if you have K600 000 you need 12 K50 000, however with the debasing, you will now need 12000 of the K50 to make K600 000. BUT WITH A VALUE OF K6000 000 000 currently. You now Know how many people will afford to have K6000 000 when it is debased.

    3. vote
      flag Maxwell says: Maxwell
      January 23, 2012 at 6:54 pm |

      Daft chap!!

    4. vote
      flag Jobby says: Jobby
      January 24, 2012 at 9:41 am |

      You must be a very educated person, but on this one, you have missed it. With rebasing, even your K600 000 reduces to only K600 so that you still need only 12 notes. Everything measured in Zambian kwacha will drop the three zeros. Even the Dollar will now go for K5 12 Ngwee. Government budget will be K20 billion.

    5. vote
      flag educated insight says: educated insight
      January 24, 2012 at 12:14 pm |

      iwe dont just blf on things u dont understand.knocking of zereos doesnt change the value of the currency.k50 will be equivalent to k50000 so nothing has changed.basic economics money is not value but a store of value.what has value are the goods and services produced.economics fountamentals are ripe for debasing

    6. vote
      flag Mushili says: Mushili
      January 24, 2012 at 5:01 pm |

      you havent said anything logical. can you repeat please!

  30. vote
    flag Chikobe says: Chikobe
    January 23, 2012 at 4:47 pm |

    Our children should also know that in the world coins are used to buy goods not just notes. Zamtel belongs to Zambians that is why its called Zambia Telecommunications, Thanks!!!!

    Reply
  31. vote
    flag mwamba says: mwamba
    January 23, 2012 at 4:50 pm |

    pipo, the money value remains the same. its of no sense to debase the kwacha. if a coke is K3000, it will still be K3000 of money value except that u will ko it K3. GVT plz make incentive to improve the economy not debasing the currency. there are lot of mineral reserves CAN U INVEST IN THEM, BY OPENING GVT RUN MINES. NOTE THAT, zambia will never develop when private companies runs the economy! we need GVT run economy for zambians to see meaningful economic value.

    Reply
  32. vote
    flag Mutinta says: Mutinta
    January 23, 2012 at 4:51 pm |

    This is what I call more money in the pocket. The SA way. Good news

    Reply
  33. vote
    flag Lundazi Dweller says: Lundazi Dweller
    January 23, 2012 at 4:52 pm |

    So what will happen to Zamtel? I hope we will not see some cadres being appointed to management positions. Whats the fate of the current employees? and whats the time frame of these changes? My greatest fear is if the company grinds to a complete halt more harm than good will be created.

    Reply
  34. vote
    flag masiye says: masiye
    January 23, 2012 at 4:52 pm |

    good move for PF so  they can confuse us more , kwacha has been
    losing value with  this we won’ t even know how useless it will be

    Reply
  35. vote
    flag Mbula MASO says: Mbula MASO
    January 23, 2012 at 4:56 pm |

    I now cease to be a billionaire. Thanks PF those who have buried cash, it will grow into maize lol

    Reply
  36. vote
    flag Storm says: Storm
    January 23, 2012 at 5:00 pm |

    @ Tekton
    Dont display ure ignorance on matters u dont understand, K600,000 when the currency is debased will be equivalent to K600,000,000 today, who moves around with this kind of money. lets be rational and dont be driven by emotions

    Reply
    1. vote
      flag Tekton says: Tekton
      January 23, 2012 at 5:11 pm |

      Storm, no emotions here, read the information carefully. The exchange rate is not changing meaning if for instance RSA R1 is equal to K600, that remains the same. Rebasing is reducing the size of the notes and nothing else, meaning if you currently get K50 million as your salary that stays the same. Now my friend if you do simple thinking how many of the new K50 note which becomes the biggest note, do you need to reach K50million. Unless you are telling me that rebasing means that even the salaries and prices of things will be rebased. If this is the case, then that is even more nosense because it means that “based on the minister’ own statement the exchange rate remains unchanged.”the value of things and salaries has just gone down by a massive 1000%, wow man that is real emotions now?

    2. vote
      flag Sharp Shooter says: Sharp Shooter
      January 23, 2012 at 9:51 pm |

      Both of you are correct depending on whether it is debasing or rebasing.The govt has rebased and not debased the currency as per BOZ statemet.

  37. vote
    flag job says: job
    January 23, 2012 at 5:02 pm |

    BUT THIS IS LESS MONEY IN THE POCKET . WATZUP.

    Reply
  38. vote
    flag Eastern Power says: Eastern Power
    January 23, 2012 at 5:04 pm |

    Bantustan people can’t see anything good.what they want is a Tonga to be president of Zambia.Anyway we’ll support one in future but not HH.The boy can sell mother Zambia and fix other tribes especially Bembas and Ngonis.let them just cry no more.We have good thinking tongas but not that boy underfive.Really they are becoming rebels to mother Zambia.

    Reply
    1. vote
      flag bongwe says: bongwe
      January 23, 2012 at 10:31 pm |

      maybe they are dad ones spreading fake rumors of the president being dead. :-?

    2. vote
      flag sinene says: sinene
      January 24, 2012 at 11:56 am |

      HH or other politicians doesnt represent the tonga people..so please avoid tribal remarks. The eongas, bembas and other zambians are quite and peaceful people..its only the selfish politicians who are always preaching tribalism for there benefit..but on the ground tongas and bembas live together. so dont attack the tribe attach the politician.

  39. vote
    flag Nthuli says: Nthuli
    January 23, 2012 at 5:04 pm |

    The best is to forget the Kwacha and use the Dollar then after some years we go back to the kwacha , this has worked in Iraq even Zim , even in southern American country this was the same …But I very not happy with this .

    Reply
  40. vote
    flag copperbullet says: copperbullet
    January 23, 2012 at 5:06 pm |

    very good idea in the banks as for 12bil any Tom dick and Harry could open a bank …..south Africa banks ask you to have $250million just for security given to the reserve bank so if u do go bankruptcy outstanding account and workers can be paid, sa banks are record as some most financially sound in the world …….this also means no more funny Nigerian banks in zed

    Reply
  41. vote
    flag Mwila Kashimoto says: Mwila Kashimoto
    January 23, 2012 at 5:06 pm |

    Yaba! I don’t know what to say coz I don’t know what this means. It would be nice to see the coins, but does this reallyl mean we will have more money in our pockets? This is so confusing for me, awe limbi nsha sambilila sana coz I don’t really understand our benefit in this. I would appreciate it if someone who understands explained to me. @ Ichipwa hahahahahahahah, I like it – Our departed kwachas and ngwees will begin to resurrect from their graves Lolest!

    Reply
  42. vote
    flag Eastern Power says: Eastern Power
    January 23, 2012 at 5:12 pm |

    This will help us who want corrupt MMD to bring back our money which they have burried.But the best thing to do is to monitor all banks so that crooks can’t start negotiating with workers.Coz people are going to remove all the money in trunks.We’ll be monitoring the accounts.Corruption should be stopped.people should take the money to the bank.

    Reply
  43. vote
    flag chichi says: chichi
    January 23, 2012 at 5:13 pm |

    @ good citizen-please lets not bring tribes in all issues.Does watchdog opinions speak for all Tongas? I am proudly tonga and i am happy with the positive developments our President is bringing! Unlike other people i am not led by tribal politics and criticising even where its not necessary! Development is for all Zambians.

    Reply
  44. vote
    flag back bencher says: back bencher
    January 23, 2012 at 5:15 pm |

    @Tekton&Storm ,i dont understand what you mean? simply said it will be K600 in K50 notes equivalent to K600,000.00 to day

    Reply
  45. vote
    flag Gani says: Gani
    January 23, 2012 at 5:22 pm |

    Political engineers at work……………lol

    Reply
  46. vote
    flag Matac0 Yanjoka says: Matac0 Yanjoka
    January 23, 2012 at 5:25 pm |

    The dangers of voting in semi-literates as predicted before sept 20

    Reply
  47. vote
    flag chola says: chola
    January 23, 2012 at 5:31 pm |

    The Ghanaian Cedi was US $1 to about 7000 Ghana Cedis before they knocked off their zeroes.Now it is US $ 1 to 1.6 ghana cedis. ours is about 5000 kwacha to a dollar but it looks like after the conversion our rate will be about $1 to K 5. Any expalantions?

    Reply
    1. vote
      flag solola! says: solola!
      January 23, 2012 at 6:25 pm |

      yes u are correct and its actually a good thing because the buying value of all products and services still remains the same…so a bottle of fanta will be k3..lol..nama ngwee!

    2. vote
      flag zambia abandoner says: zambia abandoner
      January 23, 2012 at 8:12 pm |

      The Ghanaian Cedi was almost 10000. So they seemed to knock of 4 zeros. At the time they knocked of the zeros their currency was slightly stronger than the dollar.

  48. vote
    flag Italian Bunga Bunga (Original) says: Italian Bunga Bunga (Original)
    January 23, 2012 at 5:33 pm |

    I have stopped blogging but I am waiting for Mr Capitalist/Bootfimofimo/Senior Citizen on this.

    Still waiting!

    Reply
    1. vote
      flag Maxwell says: Maxwell
      January 23, 2012 at 7:30 pm |

      Bootfimofimo may comment BUT they other two are shittting bricks, very sad little people they are!! kekeke

  49. vote
    flag Chris says: Chris
    January 23, 2012 at 5:33 pm |

    At what cost? What are the benefits? How much will be the cost of printing new notes? I hope in 2016 they will be no commission of inquiry to find out how the contract was given! Does Zambia really need to spend many on new notes? 

    Reply
  50. vote
    flag Ba Biggie says: Ba Biggie
    January 23, 2012 at 5:37 pm |

    With this news,the demand for foreign currency will be very high especially on the black market. because indians and politicians will offload all hidden kwachas for forex

    Reply
  51. vote
    flag CAN U FEEL IT,IT IS HERE (RSA) says: CAN U FEEL IT,IT IS HERE (RSA)
    January 23, 2012 at 5:42 pm |

    I am coming back to my Zamtel.Ndola here i come.Well done PF

    Reply
  52. vote
    flag Trigo says: Trigo
    January 23, 2012 at 5:46 pm |

    Sound like a good idea Mr. Chikwanda debase the Kwacha $1=K5 nice thats what we want whether the value is still the same its good for PR

    Reply
    1. vote
      flag Mp'nga Mbizi says: Mp'nga Mbizi
      January 23, 2012 at 7:08 pm |

      Its rebasing bane

  53. vote
    flag Tulilepo says: Tulilepo
    January 23, 2012 at 5:52 pm |

    Interesting US$ =  …….

    Reply
  54. vote
    flag Independent says: Independent
    January 23, 2012 at 5:53 pm |

    Rebasing the kwacha might actually lead to inflation. Its been the case elsewhere because prices dont go back to exactly the equivalent levels. People still think they are paying less when they are paying more. Please come up with proper policies. All you are doing is acknowledging what MMD did in stabilising the economic fundamentals. Do you own work, come up with proper policies and dont ride on other people’s achievements. People that you keep demonising by the way.

    Reply
  55. vote
    flag Musonda says: Musonda
    January 23, 2012 at 6:01 pm |

    Debasing the kwacha is over due, it changes nothing in terms of value just saying K1 instead of K1000. Probably the same as 2pm instead of 1400hrs! Weldone PF, in the long run our kwacha will look good, imagine buying a car at K20,000 instead of K20,000,000! But we just have to work hard or steal hard to buy a car as at now. New notes will come probably with same features but with few zeros. Long live dad Sata!

    Reply
  56. vote
    flag Matac0 Yanjoka says: Matac0 Yanjoka
    January 23, 2012 at 6:12 pm |

    Rebasing has actually debased the kwacha. We must have been compacent and went wrong at some point as a country…………for this not to happen again it must go on till chaps who shouted donchi kubeba the loudest see the deception and realise they have been taken for foools. The lesson has to sink in first, bring it on!

    Reply
  57. vote
    flag Wazabanga says: Wazabanga
    January 23, 2012 at 6:14 pm |

    Good move. We needed Zamtel back. The Kwacha notes in thousands did not make sense.

    Reply
  58. vote
    flag Bakulu says: Bakulu
    January 23, 2012 at 6:15 pm |

    The Japanese among others have toyed with the idea of debasing back in 2000 and it fell flat on its face. What would be the point of this anyway? The Zambian Kwacha will look prettier than the ZAR and BWP – good for the ego. What about the cost to business including SMEs who will need their IT systems, forms and all to be revamped. I actually wonder whether or not they have been consulted? Also who is to benefit? The Printers, I guess, de La Rue, who at my last check was not a Zambian company. There are other downsides e.g. inflation and opportunistic price hikes. If we were talking about debasing coins that would be a different proposition as that depends on the value of the base metal used to make the coins.

    Reply
  59. vote
    flag LION KING says: LION KING
    January 23, 2012 at 6:19 pm |

    Is this SATANOMICS or COBRANOMICS at work, hahahahahaha!!!

    Reply
  60. vote
    flag BETTERS says: BETTERS
    January 23, 2012 at 6:19 pm |

    the question is when will it be done.

    The who budget was done in Billions, are they going to re do the budget or it will be another problem for mathematicians to solve to find equivalents.

    Zambia

    Reply
  61. vote
    flag THE SAINT says: THE SAINT
    January 23, 2012 at 6:22 pm |

    So, this is what the Sata meant when he said ‘more money in your pockets!’
    Well, well, what a sleight of hand by this magician! He brings in Alexander Chikwanda the man who helped Kaunda to mess up the economy, to trick people once again. So Zambians will now carry a lot of cash to pay for bread, because the denomination will be debased. I suppose that is what an illiterate man calls ‘a strong Kwacha!’

    Reply
  62. vote
    flag MIRANDA says: MIRANDA
    January 23, 2012 at 6:24 pm |

    DULL IDIOTIC MOVE. HOW DO U COPY ECONOMIC POLICIES FROM DR CONGO OR ZIMBABWE? WHY NOT DEVELOP INDUSTRIES & PRODUCTIVITY TO STRENGTHEN THE KWACHA? ZOONA THIS IS THE MOST DULLEST, LAZIEST WAY TO DEVELOP THE ECONOMY! IF THE KWACHA LOSES 1%, ITS LIKE IT’LL ITS ACTUALLY LOST 1000% VALUE.

    Reply
    1. vote
      flag Maxwell says: Maxwell
      January 23, 2012 at 11:04 pm |

      Nigeria, Ghana, Turkey etc have done it very successfully, nothing is original in this world people just prefect old ideas and improve on them!!

  63. vote
    flag kudya nikusheta says: kudya nikusheta
    January 23, 2012 at 6:26 pm |

    This is what we have been waiting for,no need to panic pipo for this has worked for almost three countries in Africa and it definitely will work for our kwacha as well. Viva MCS and your colleagues

    Reply
  64. vote
    flag sanders says: sanders
    January 23, 2012 at 6:34 pm |

    Am surprized at how low minded zambians contributing on this site are. there is nothing to rejoice about the taking back of zamtel and the rebasing of your money. You will soon learn that you have no jobs around as this move will scare off potential inevstors and those already in will be sythoning their capital out of unstable Zambia. It is the ordinary people to be hurt by this political move and my advise to those of you celebrating your govt.’s move is that you don’t understand anything.No matter how you justify your move the world at large has got it that Zambia is renationalising by force companies that it privatized without regard to private investments. Its an blunder you will long live with because you won’t manage to convince the economic world that your country is safe.

    Reply
  65. vote
    flag BETTERS says: BETTERS
    January 23, 2012 at 6:37 pm |

    The MMD left the Zambian economy in a very good position, I am happy

    Chikwanda has just confirmed that

    Reply
  66. vote
    flag Russian hero says: Russian hero
    January 23, 2012 at 6:40 pm |

    am beginning to like it!!!!!!!!!!!!!!

    Reply
  67. vote
    flag Pafwenamwine says: Pafwenamwine
    January 23, 2012 at 6:42 pm |

    This is a good move as there are many MMD former leaders with Billions hidden underground. This will expose them more and any change of mind to try and deposit will expose them.

    Reply
  68. vote
    flag SDA (satanist Devil Advocates) or bitter UPND says: SDA (satanist Devil Advocates) or bitter UPND
    January 23, 2012 at 6:50 pm |

    Lesa whamaka

    Reply
  69. vote
    flag Bazambia says: Bazambia
    January 23, 2012 at 6:50 pm |

    KEKTON
    You don’t seem to understand what debasing is all about.Purchasing power will remain the same. If you have K600,000 its value will now be K600. A commodity currently selling at K600 000 will now sell at K600. DON’T SHOW AS YOUR IGNORANCE.
    YES if I’m to use your reasoning, if you have K600 000 you need 12 K50 000, however with the debasing, you will now need 12000 of the K50 to make K600 000. BUT WITH A VALUE OF K6000 000 000 currently. You now Know how many people will afford to have K6000 000 when it is debased.

    Reply
  70. vote
    flag Bazambia says: Bazambia
    January 23, 2012 at 6:53 pm |

    KEKTON
    I think you don’t seem to understand what debasing is all about.Purchasing power will remain the same. If you have K600,000 its value will now be K600. A commodity currently selling at K600 000 will now sell at K600. DON’T SHOW AS YOUR IGNORANCE.
    YES if I’m to use your reasoning, if you have K600 000 you need 12 K50 000, however with the debasing, you will now need 12000 of the K50 to make K600 000. BUT WITH A VALUE OF K6000 000 000 currently. You now Know how many people will afford to have K6000 000 when it is debased. PLIZ READ CAREFULLY TO AND UNDERSTAND.

    Reply
  71. vote
    flag Mukame says: Mukame
    January 23, 2012 at 7:13 pm |

    Time to dig up your old notes.

    Reply
  72. vote
    flag Jay Jay says: Jay Jay
    January 23, 2012 at 7:25 pm |

    Some of the major advantages of currency re-denomination are ;  it helps in restoring credibility and confidence to a nation’s currency. Redenomination will definitely reduce the presence and use of foreign currencies like the Dollar in the Zambian economy. If BOZ succeeds in maintaining the relative value of the new Kwacha, many more people will now resort to Kwacha as a better store of value than say the Dollar. This in itself will further reduce the demand for Dollars and strengthen the Kwacha. Secondly, if well managed, and in consonance with other measures, redenomination will assist in taming inflation in Zambia in the long term.
    Let’s not forget also the convenience of carrying more value with fewer notes or figures like we do abroad…

    Reply
  73. vote
    flag GUNDIX says: GUNDIX
    January 23, 2012 at 7:26 pm |

    Thumbs up to GRZ!

    Reply
  74. vote
    flag Mt says: Mt
    January 23, 2012 at 7:31 pm |

    Rebasing the Kwacha is a good move,government is now thinking and exposed to the outside world, but ignorant Zambian’s will have a rough time adapting to the new currency.However, this is in the best interest of the country. What government needs to do is to print money that is durable and long lasting, unlike the plastic polymers that we have at present. Rebasing is not a simple task, we gonna face big setbacks, but we gonna make it.Since they planning to drop three zero’s, they should also knock off three zero’s from all goods. Just don’t mess up….

    Reply
  75. vote
    flag Maxwell says: Maxwell
    January 23, 2012 at 7:35 pm |

    To our MMD colleagues,

    May I ask if this is Ala Bee’s initiative as well, please advise us you chaps seem to know more about our recent economic history….kekeke… …why the silence???

    Reply
    1. vote
      flag Matac0 Yanjoka says: Matac0 Yanjoka
      January 23, 2012 at 7:41 pm |

      Rebasing is based on ‘economic stability’, which as you know was strengthened by……., i will let you finnish the sentence. Since your monkey took over the Kwacha has been falling and has never regained. thats why he is coming up with these desperate measures to rebase using Rb’s good run.

  76. vote
    flag tekton says: tekton
    January 23, 2012 at 7:36 pm |

    BaZambia, sounds simple doesn’t it from your logic, however what you seem to be missing is that the exchange rate remains unchanged. What was drawing attehpntion to is that is you for example have $1000 currently the amount in kwacha is about K5 000 000, with the rebasing which does not include exchange fixing the amount stays the same. Now lets take your view point and say a shop in zambia buys sugar from overseas for for $10, at the current rate that would be K50 000 now that the currency has been rebased is the value now K50, even though the exchange rate has not been fixed but remains at $1 = K5000. If the exchange remains the same then the shop have made a massive loss and i therefore put it to you that the shop will

    Reply
    1. vote
      flag Mp'nga Mbizi says: Mp'nga Mbizi
      January 23, 2012 at 8:29 pm |

      The kwacha will be K5 for 1 USD. What is so difficult to understand. It means everything gets divided by 1000. Salaries, prices of goods and services etc also get divided by 1000. That way the value of the currency remains the same. Comprehende?

  77. vote
    flag tekton says: tekton
    January 23, 2012 at 7:43 pm |

    BaZambia, i theefore put it to you that the shop in my senario above will either demand payment in dollars or will charge K50000 as before. What i think has been done here is not different to the GIdeon Gono (zimbabwean governor) school of economics, the market will relign this rebase and you either end up with all trading being in dollars or adding back the zero, unless the government fixes the exchange rate which again will be tossed out by the market. This move for me it not sound period.

    Reply
    1. vote
      flag Mp'nga Mbizi says: Mp'nga Mbizi
      January 23, 2012 at 8:32 pm |

      You are a Dunce, period.

    2. vote
      flag kamwendo says: kamwendo
      January 24, 2012 at 1:09 am |

      Gono first printed more money, THEN knocked off the zeros; That is, First fueled inflation before rebasing!!

  78. vote
    flag Son of Africa says: Son of Africa
    January 23, 2012 at 7:46 pm |

    Does this mean more money in the pockets? As one brilliant colleague put it, “Ifisela – Elo chibe shani? Inflation is inflation…

    Reply
  79. vote
    flag PanAfricanist says: PanAfricanist
    January 23, 2012 at 7:47 pm |

    This means you guys zed being paud a salary of K4, 000 000. will be paid K4000.00. next month.!!!! I just hope the nearby utuntemba know how to do the conversion. Otherwise you will end up only buying a cirgarate from your salary..lol..# 66 you seem to have googled the right site for an explannation…as for Kekton..google again…

    Reply
  80. vote
    flag CHARACTER ASSASSIN 00 says: CHARACTER ASSASSIN 00
    January 23, 2012 at 7:57 pm |

    Let’s not be paranoid and too upset about this change. There is no economic impact about rebasing the currency, let’s be logical. The ratios against other currencies remain unchanged, however, this improves investor psychology in that they do not perceive the country as a poor nation they can exploit. All in all, we expect no difference.
    As for Zamtel, Zamtel was corruptly sold and it is sad that some Zambians are sympathising with the criminals. The report, regardless how biased it appears, really indicates that Zamtel was going to be a shell entity used to syphone funds into personal accounts!

    Reply
  81. vote
    flag Terminal Mutima Patient says: Terminal Mutima Patient
    January 23, 2012 at 8:12 pm |

    Very clever move, tragic for those ***** like that Angolan refugee Liato to opt to bury money in the ground, little education, it is bad sure!

    Reply
  82. vote
    flag PHILOSOPHER says: PHILOSOPHER
    January 23, 2012 at 8:14 pm |

    It has worked for Ghana. Now 10, 000 Ghanaian Cedis was debased to 1 Cedi. This made the international exchange rate decrease to $I =GHS 1.45

    Reply
  83. vote
    flag Ten Kwacha says: Ten Kwacha
    January 23, 2012 at 8:22 pm |

    We live in a market economy. By knocking off the 3 zeros it means there will be lots of kwacha floating around and very few goods…. we will be in hyper inflation situation. What we need is to increase production and exports. Otherwise we will kill the economy of Zambia.

    Reply
  84. vote
    flag Choobe Muunga says: Choobe Muunga
    January 23, 2012 at 8:24 pm |

    Good moves, about the ZAMTEL sale politicians must know power does not mean selling national resources corruptly, right price or not, corruption out! On zeros great move too, down with thick wallets and heavy bags for a few dollars

    Choobe:)

    Reply
  85. vote
    flag tekton says: tekton
    January 23, 2012 at 10:03 pm |

    Mp’nga mbizi, sad my friend you seem to be confused, what part of exchange rate remains the same don’t you understand. Your idea above is what is called fixing the rate, however even if you fix the rate, the market will still see the exchange the same, just because you decide to take out zeros from your currency does not mean that suddenly your currency is now also valued with less zeros by the market. What you have seen today in Zed is called Zim economics, better known as Gideon Gono economics, it does not wash with the market. $1 will still be equal to +-K5000 even after this stant, like i said before prepare to carry bags of money or start demanding payment in dollars.

    Reply
  86. vote
    flag CritiX says: CritiX
    January 23, 2012 at 10:45 pm |

    The Zamtel reversal was initiated by PF during campaigns based on suspicions, they appoint a baised COI with predetermined findings and request it to recommend the predetermined reversal. They use the pro-government media to try to stir up public support for the decsion. They publish the COI report which hadly gives an independent mind an opportunity to hear both sides of the story. The COI does not even assess its own value of Zamtel. the COI recommmends a reversal without measuring the cost and impact, pro or cons of such a decision.

    Reply
  87. vote
    flag Chama says: Chama
    January 23, 2012 at 10:55 pm |

    Should 2billion of liato make the gvt 2spent trillions sure 2rebase kwacha.was it on budget? If not wat benefit will it ve to the zambians?and why are u so in hurry? Take ur time u may do that next year. stregthen it first.

    Reply
  88. vote
    flag mens says: mens
    January 23, 2012 at 11:04 pm |

    what about repossessing the mines? Sure they were worth much more than baby Zamtel. what benefits will deleting zeros bring? Remember 77 Japanese yen is equal to 1 US Dollar yet Japan is economically powerful. Ours will be 5 ZMK to 1 US Dollar yet or economy is under five! When will PF talk about 100,000 jobs in 6 months instead of the minors?

    Reply
  89. vote
    flag Mwanawakwitu says: Mwanawakwitu
    January 24, 2012 at 12:08 am |

    Amen! Praise be to Jesus. We struck while the Iron was hot.

    Reply
  90. vote
    flag Mwanawakwitu says: Mwanawakwitu
    January 24, 2012 at 12:10 am |

    God could not let Islam have a foothold in his beloved ZAMBIA. Yes his beloved Zambia, no moslem propaganda in my nation period.

    Reply
  91. vote
    flag Mwanawakwitu says: Mwanawakwitu
    January 24, 2012 at 12:11 am |

    A win for the people yeah!

    Reply
  92. vote
    flag BAKATEKA says: BAKATEKA
    January 24, 2012 at 12:17 am |

    maxwell what do you do for your living…i think we are tired seeing your ugly fat face

    Reply
  93. vote
    flag REAL MAN says: REAL MAN
    January 24, 2012 at 7:05 am |

    Now let the foools bring back our money.

    Reply
  94. vote
    flag CHECHA says: CHECHA
    January 24, 2012 at 7:31 am |

    Amen! This is incredible. God bless Zambia! Long live PF govt. We are thankfull to God for Sata and his team.

    Reply
  95. vote
    flag Tekton says: Tekton
    January 24, 2012 at 8:35 am |

    My last comment on this, for everyone celebrating this unsound economic exercise i suggest you do a simple google on the term rebasing and you will see the problem with this whole exercise. Like i said above what this means is pretty much more notes with less value, by default the governement has actually reduced the amount on money in your pocket that is called inflation. If the inflation was by one digit that would be less painful, but a three digit inflation increase induced using currency is really not sound, but i guess that means us in the diaspora can now buy more with our foreign currency. The only tough and sad part about this is that almost 90% of zambian trading is imports so that means prices out of this world for the average man. Unless you demand payment in dollars.

    Reply
  96. vote
    flag Lukos says: Lukos
    January 24, 2012 at 8:52 am |

    Kudos to PF,it will be very easy to carry a lot of money in our pockets with ease.

    Reply
  97. vote
    flag Phil says: Phil
    January 24, 2012 at 10:30 am |

    It is unfortunate that so many people do not understand what currency rebasing entails. Currency rebasing is usually monetarily neutral and is introduced to make commercial calculations easier and cheaper. Turkey, for example, knocked six zeroes off its lira currency in 2005. There is absolutely nothing to be scared of or to worry about. If it is done when the rate is K5000 to a dollar, the rate will become K5 to a dollar, as simple as that. This does not however mean that the Kwacha has gained value NO!

    Reply
  98. vote
    flag SHEIKH says: SHEIKH
    January 24, 2012 at 11:50 am |

    @63 MIRANDA, are you Zambian?? We are not the first country to do this, even “Ghana” one of the Good Economies in Africa did the same to their currency?? Your Philosophical writing sounds so bitter. What the hell, stay in the US, no one has asked you to come to Zambia and don’t call us DULL???. Do your research before writing such crup as Zambians are not lazy people, WE work hard & have contributed to many Successful Economic Developments including the US.

    Reply
  99. vote
    flag SHEIKH says: SHEIKH
    January 24, 2012 at 12:00 pm |

    NOT ONLY ZAMBIA US Rebased their currency. So shut-up you unthankful people. READ:::
    The United States has debased money in the past. In World War II, we made steel pennies to save copper. In the 1960s, the high value of silver caused a run on quarters and dimes and led to a full-blown coin shortage until we substituted copper and nickel. We also took most of the copper out of pennies in 1982 for the same reason.

    But debasement only puts off the inevitable for a short time. Because the penny is fixed in value at 1 cent, no matter what the penny is made of, the cost of its material will rise with inflation and eventually be worth more than a cent.

    Reply
  100. vote
    flag THE GURU says: THE GURU
    January 24, 2012 at 12:13 pm |

    Knocking off zeros is not a very big significance. Anybody could have done that. Ba PF talk about creating jobs and improving the general value of the Kwacha and quality of a Zambian life.

    Reply
  101. vote
    flag wide mouthed says: wide mouthed
    January 24, 2012 at 12:26 pm |

    Tekton, u will still carry 12 K50 notes for the amount of K600 which is now K600 000- dullo dullo dullo!!!!!!!!! let the experts debate on these issues rather than showing us ur ignorance here… Busy calling other pipo uneducated n yet u’re the only uneducated one we see here (n that’s because uneducated pipo argue even without knowing what they are arguing about)…. this move was planned way back- during the Mwanawasa days…. mmxxxxmmm!!

    Reply
  102. vote
    flag NATCO says: NATCO
    January 24, 2012 at 1:58 pm |

    Iwe Tankton, You are dafty. Don’t you know that u won’t need that sort of money to buy that much worth of commodity as it well too much?

    Reply
  103. vote
    flag Kwa mandevu Woyi says: Kwa mandevu Woyi
    January 24, 2012 at 4:58 pm |

    imwe wanthu…please check why the CEDI is the strongest currency in africa? in fact Nkuruma chaps rebased it as well after the “rawling years of hyper inflation”…

    Reply
  104. vote
    flag Najudah says: Najudah
    January 24, 2012 at 8:48 pm |

    Reading some of these comments I feel like i am in an alternate universe, it is amazing how unbelievably shallow Zambians are

    Reply
  105. vote
    flag Yyaya Yyo says: Yyaya Yyo
    January 24, 2012 at 10:06 pm |

    PF is smart

    Reply
  106. vote
    flag Kanjimaano says: Kanjimaano
    January 24, 2012 at 11:13 pm |

    I wish that they don’t print the monies outside the country cos by doing means more money in other people’s pocket. Alot of cash has been pocketed by SA companies and clinics.. Zambia must be independent.

    Reply
  107. vote
    flag Jigga says: Jigga
    January 25, 2012 at 1:14 am |

    Can’t believe people who are shouting ‘good move’ are unable to see through how bad this move is.

    If yo can’t comprehend simple, basic economic ramifications of this, just read the last but one paragraph. It reads: “In recent years two countries Iraq and Zimbabwe are known to have rebased their currencies”. Do you know why those 2 countries did that?

    This is as a result of too much inflation to the point where your currency is almost useless against all major currencies. It’s purchasing power almost equals to zero – a condition known as ‘Hyperinflation’.
    Zimbabwe’s inflation rose to 231,150,888.87% in 2008 and their currency dollar was valuing at $1USD = $Z2,621,984,228 (good luck reading those numbers) – source: Wikipedia.

    Reply
  108. vote
    flag Jigga says: Jigga
    January 25, 2012 at 1:15 am |

    Wikipedia goes on to report that “In 2009 Zimbabwe abandoned its currency; at present in 2012 a new currency has yet to be introduced, so currencies from other countries are used”.
    It says: “A third redenomination, producing the “fourth Zimbabwe dollar” occurred in February 2009, and dropped 12 more zeros from the currency. It was thus worth 10 trillion trillion ZWD (first dollar), so overall the ratio of the redenomination was 10^3 * 10^10 * 10^12 = 10^25.”
    Extra zeros can be knocked off ‘naturally’ by proper and sound economic management not by force.
    What this means is a govt that does this due to high inflation is just masking the problem. It’s a temporal move that just sugar-coats or sweeps dirty under the carpet as the saying goes.

    Reply
  109. vote
    flag Jigga says: Jigga
    January 25, 2012 at 1:16 am |

    Sooner or later the many zeroes that were deleted will come right back. Where do you think they came from in the first place? At some stage our currency and that of our neighbour Zimbabwe were at par with the British Sterling.
    This isn’t even about who stashed money or whatever. After all everyone who holds money in the Zambian currency will be affected. It’s poor economic management. I’m afraid Chikwanda doesn’t give a proper explanation in those words he was quoted. So what about inflation and GDP? It’s not like Zambia’s GDP has all of a sudden now grown by 50% and the ZMK is now stronger against the green buck.
    Big mistake!

    Reply
  110. vote
    flag Jigga says: Jigga
    January 25, 2012 at 1:16 am |

    This is what happens in a country that doesn’t produce anything to export. The issue of a weaker currency is something that actually can benefit a country that exports more than they import.

    Consider China for example: China actually benefits from a weaker value of their currency because they are able to export more and their goods overseas are cheap and affordable against otther good from competitive nations. It turns out China actually devalues its own currency and guess who isn’t hahppy with this? Yes you guessed right.

    What I’m saying is you don’t artificially make your currency look stronger by cutting zeros without backing it up with proper economic management. What happens when the zeros come right back? Do you keep on cutting them? Oh dear!

    Reply
  111. vote
    flag Pa Zed says: Pa Zed
    January 25, 2012 at 5:28 am |

    OK Guys time to make a profit here. After the zeros are knocked off inflation will soon follow. So its time to buy Land. If you are in retail stock pile all your non perishables right after the switch wait for the price rise in six or so months then start selling. Whatever you do do not put your money in a bank keep it in goods.

    Reply
  112. vote
    flag Pumlutangu says: Pumlutangu
    January 25, 2012 at 9:31 pm |

    Ok. From today on, a crodile is called a lizard. Happy???

    Reply
  113. vote
    flag Natalia Duke says: Natalia Duke
    February 3, 2012 at 10:44 am |

    Appreciate you sharing, great article.Really looking forward to read more. Will read on…

    Reply

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