Government says the 10 % appreciation of the Kwacha against the dollar is an indication that the investor community still has confidence in the country’s investment climate under the Patriotic front administration.
Deputy Minister of Finance Miles Sampa says even the government decision to come up with a statutory instrument to ban the use of the dollar in the local transactions is meant to strengthen the Kwacha against the major foreign currencies.
Mr. Sampa has however noted the need for the government for the appreciation of the Kwacha to be monitored to prevent the currency from becoming too strong against the dollar.
The minister adds that a very strong Kwacha would make Zambia’s exports expensive a situation he says would affect the performance of the local industries which export goods to other countries.
Mr. Sampa was speaking during the launch of the National Strategy on Financial education for Zambia in Lusaka this morning.
Mr. Sampa observed there is need for financial education to be promoted to enable the citizens acquire good financial management skills that will impact positively on the country’s economic development.
Earlier Bank of Zambia deputy governor of operations Bwalya Ng’andu noted that access to financial services in the country still among the adult population stands at only 37.3% adding that there is need for more people to begin accessing such services.
Dr. Ng’andu adds that there is financial literacy among the people of Zambia to be scaled up adding that financial sector development plan also seeks to improve among other things to develop a rural finance policy and strategy to increase access to financial services to the rural population.
And minister of Education Dr. John Phiri observed that the Ministry of Education is also working on modalities that will ensure that financial education is incorporated into the country’s education system
ICHO
the appreciation has nothing to do with investor confidence. who doesn’t know that it was engineered by govt and will soon start hurting a few exporters in the country.
spot on the biggie
icho…ichatukile aba tonga…..
Elyo bachitamfya nge mbwa yaiba Amani.
You see, I follow Lusakatimes on Twitter and every time they post their headline it get twitted to my phone and when I see a dumb headline like this on the economy, it is really had to resist, but come to the site tell the world that not all Zambians are this dumb.
I thought this bloke had some knowledge about the economy and he was under the mentorship of his uncle Alexander Chikwanda, but looks like my thinking was wrong.
Maybe he has been hiding under the rock in NY and did not know what has been happening. The web is awash of why the kwacha has appreciated and it is all to do with ban on use of dollar.
Young man when you talk about investor confidence back it up with FDI, capital inflows and bond purchases figures by foreigners, then we shall listen.
Big man, you are very educative.I mostly like you sensible contributions.
Excellently said. Very articulate.
Bootlicker you are just a UPND Cadre who is disgruntled like your leader,Just watch us rule !
We are on the right direction.We will be moving forward to ensure every Zambian benefits.We are not like those bitter individuals……..
Aminister what is so special about financial Education. Don’t we have enough syllabi to address such issues. Don’t overload learners with your already overloaded curriculum. Anyway no wonder learners just scrap through without learning anything at all. Our curriculum is overloaded and nothing tangible is happening at all. It’s really a government of confusion and with no proper plans in sight. I rest my case!
Financial education is good for our country for people will understand why the should invest and where they should invest. Why should one borrow money, why should the person not borrow when and what for as example. To get some enlightenment try to read books such as Rich dad poor dad by Robert Kiyosaki you will get an idea of why financial education is good for a country and its citizens.
HH, CIMUKALIPE…SANA…KWACHA APPRECIATING… BITTERNESS IMWEE…NOMBA
why always talk about HH,if you what to add a coment jst add about what we are talking.
We all know that the kwacha will at some point depreciate, so what will Miles say then?
@4 Bootliker
So the ban was a good thing, right?
I wonder what he will say when the decline returns. We all know this appreciation has nothing to do with real economic activity in the economy, it is resultant from the usual exulberance bred by much dollars chasing kwachs in the economy as the govt depletes our foreign reserves. This country is headed by a stinking CNP and we are in free fall whether they like it or not. No matter how many relatives or Bembas Sata appoints or how many districts he re-aligns, the die is cast, his is a doomed administration.
The reason why there was bacon for breakfast in my house this morning is a sign that Bill Gates likes me.
And who gives a damn about who is next to Sampa, for all I care it can be Sansakuwa, Kamalondo or a whore from Tansintha.
Its artificial believe you me it will get worse in the coming months
#9 Wishful thinking bwana. PF will be around for quite, quite a little while, like it or not. Just swallow your bile with your mabisi.
so sibaula silwamba is now a GRZ worker as well?
Big up to the PF…..
#4 well conluded but poorly analysed its not necessary all true that its pulling the dolla off our markets causing the appreciation but also true we need inflow from investors than lying about it all
In fact, Mr Sampa seems to have forgotten his Fin 201 and Stat 201 courses. It is not the 4700Zmk/$ that shows that investors have confidence. Investor confidence has to do with the STABILITY of the exchange rate to reduce uncertainity over the business horizon.
PF cheap politicking. I am not sure what the exchange rate will be in the next weeks if I can see it appreciate by 10% within less 2 weeks. This induces a lot of uncertainity and erodes investor confidence. B..std.
These people who import fake chines products ,will swallow up all this cheap Dollar and things will back to normal oh sorry abnormal.
#8 Rycus
I agree with the ban, it’s been long overdue and don’t agree with HH’s take on it and I think he is just politicking. I don’t think anybody from MMD economic team has said anything against the ban becoz we were going to enforce it anyway , and not the way PF is doing it.
Note that currency strength is a balancing ACT based on what is key to the economy i.e. exports industry vs imports industry.
I think PF should just focus on growth and not this currency talk . It is normal for a fast growing and developing economy to have weaker currencies because of large current accounts import bill to develop the country.
Having said that ..I still maintain that what Miles is saying is rubbish from pit of hell. let him find a fresh sound bite
I totally agree with your points.
This CNPlet (child of CNP) thinks all Zambians are as dull as his Kaponyas /PF supporters. The appreciation is NOT caused by investor confidence at all. It is basically related to the increased demand for the Kwacha as corporates convert their dollar portfolio to Kwacha in line with the GRZ requirement for all corporates/individuals to do business in the local currency. For some chap to talk about investor confidence in this case just shows what calibre of people we have in GRZ. One good thing though, YOU do care about investors, one Kaponya was telling them to fck off :)
#20 Even when and if you mean well in whatever you say, very few upright minded boggerz here will take you seriously, az long you think UKWA and the meaningless CNP are the best thingz to have come out of the HH academy of jox!
I hope this ‘strong’ kwacha does not hurt the export sector of the economy. This implies that people who export will make less money unless they increase the price of their goods which may not be practical. To me a stable currency is more important than a weak or strong one. Let us see the long term effect of this change
Right. Investors would prefer to invest next door in Congo where there are no current restrictions. So the net result will be investor flight from Zambia. We shall go from 1 to 0 and the minus.
…then minus.
Tongas, Please don’t hate the player, hate the game. Be calm your turn will come.
moron!
As an exporter of raw material mainly copper and agriculture products why do you need a strong kwacha? I wish these people could understand a bit of economics. The major inputs of production both in copper production and agriculture are in kwacha. i.e fuel, electricity, and labour. A weaker kwacha means an exporter gets more kwacha for each dollar, he needs more kwacha to pay his costs which are in kwacha. Thats why japan and chine never strengthen their currencies.
The 10% appreciation is just for a short time as client turn to using the kwacha after the ban. Like Bootlicker says as long as not FDI nor foreign buying of Zambian equities and bonds does not happens, why would the kwacha appreciate?
Its not like the world has sudden got in love with the kwacha.
Which investor is talking about? I thought this guy was intelligent.
That Statutory iNSTRUMENT IS ILLEGAL it was not ratified by parliament.
You are confused. SI’s can come from regulators!
Dear all
The person who calls himself MMD Chief Bootlicker is a dreamer and cheap politician who doesn’t understand economics, The PF government inherited this country from MMD who in my opinion destroyed this country, auctioned the country assets to foreigners for personal gain, so PF are now working harder to bring sanity to this country.
Think before you talk rubbish about what PF is doing, criticize with manners.
ur analysis daz not make a tinge of sense.Do u have proof pictoral ,documentary or real dat shows dat MMD auctioned the Country.
Why being emotional in the first place?Is it difficult to debate issues without pouring out insults?Anger suggests that you don`t like what you are doing and are frastrated that you can easily insult others.Cheer up man.It will be ALRIGHT.
I do not doubt that you will be president of Zambia in the future. This is because the electorate rewards non performing governments and numbskulls with votes. You are on track, keep senseless, the voters love it!!!
But pa Zambia napo ba kaponya kupaka. Tiyeni uko mutisokosela. Sanity my foot.
Just hoping it can appreciate a little more so it can be cheaper when I pay my school fees since I have to transact in dollars. Enjoyed reading the many smart comments, as usual there were a few dull ones, the insults (I shudder to think some people are raising children when they sound like that).
Prophets of Doom let the Zambian live in peace. Keep your venom to yourself.
Its now cheaper to buy steel bars from south africa than these local ones.
Golobalisation has escalated dramatically. Mining investors now have a greater geographical choice than ever before. This has resulted in them becoming more selective when directing investments. As a consequence, a comparative advantage in mineral wealth no longer necessarily secures prosperity for the host nation. There is a strong relationship between the success in attracting investment and the attractiveness of a country’s investments rules.
From a business perceptive, this is short-term window dressing nothing to tap dance about but what do you expect from politicians….I would be more cheerful if the appreciation of the Kwacha was due to increased exports in non traditional goods backed by government policy.
If you can access this website, I’m sure you are even smart enough to read between the lines, knowledge is power.
y’all spitting rubbish from your dirt mouths. let my president work.
When you are in government you do not campaign, you perform, period. You will not win votes by pin pointing your hatred for opposition, you have a record and that’s what you have to run on.
This Miles Sampa haz already held three different deputy minister portofolioz in the 9months of PF’s rule, Lusaka, Southern Provincez and now Ministry of Finance.
The Kwacha has appreciated but these gains have been artificial to say the least. There is no indication that appreciation of the Kwacha has come from naturally good economic performance but from SI 33 that precludes transacting in dollars thereby forcing a reduction the demand for dollars and increasing the demand for the next best currency of trade ie the Kwacha. We need solid economic performance for the Kwacha to perform well to perhaps K 3500 per USD. Frankly, the PF government has been making economic flip- flops of its own and need to get down to work. Zambia is a developing country and we expect manufacturing jobs to rise to unprecedented heights but measures are stalling this. Why not offer tax incentives to companies that meet certain recruitment figures?
MMD BOOTLICKER. Can one conside rthe fact that investors have complied with the move as a sign of confidence since they have not run with their dollers? Thanks.
Please understand that the cost- benefit sense applies here. The exchange losses arising from quoting in Kwacha are not as material as the cost of divesting in the country. However, if the Kwacha were a stock price based on sentiment, it would have depreciated in value by all means. Please challenge me!
pf power
The man i not sure if indeed the investors have confidence in the current leadership.
I think the ministers interpretation of the kwacha gains is wrong and has nothing to do with investor confidence (others have stated this above). Shows how political the PF govt is. They need to stop campaigning and start working for Zambian people.
A true measure of kwacha appreciation is when its driven by the following:
Demannd of foreign investors for Zambian
Bonds
Equity
or FDI
As well as increased export of Zambian goods.
Its only the above which bring forex in the country in large amounts to be exchanged for Zambian kwacha. The result would be a stronger exchange rate i.e strong kwacha.
Anything short of that is pie in the sky which Miles Sampa is seeing.
If you are in Australia, as your avatar implies, then you do not know how much foreign direct investment (FDI) is coming into Zambia. The Minister lives in Zambia and he is in GRZ. He has informed you that investors have confidence, but you demand figures to be written on the moon.
Ask yourself, why are all entities trying to comply with SI 33 so much that the Kwacha is appreciating? My guess is that they have confidence in the Zambian economy and what’s here. Mind you Zambia is one of the countries that are gateways into Africa. For one, it is surrounded by very rich neighbours, but investors would rather first pitch their tents in this lovely Zambia while testing dark waters.
Sampa HH challenged you to be factual when he was on JOY FM instead you answered with a cheap talk of how you were victimized,HH told you to call him but you failed to do that,the problem is this government is for liers by liers come December the economy will be in peaces of collapsing,so PF has no plan Sata has no plan himself
To grow our economy and create jobs, we need small scale businesses to take part in the national development.The strong dollar that has been surviving on local transactions being done in US dollar terms has for a long time been a prohibiting factor to buy equipment and machinery needed by small scale businesses.Now it will be possible.The strong value of the dollar was artificial as can be seen from the 10% appreciation of the Kwacha in 2weeks following the SI33. A STRONG KWACHA IS GOOD to make it posible for local enterprenuers to get capital goods for the business.I WANT IT TO APPRECIATE UPTO AT LEAST ZMK3000/US$1 or better.AN ECONOMY THAT IS DORMINATED BY LOCALS IS A BETTER ONE.
The assumption is that the small scale entreprenuers will not want to export their goods. If they export their goods and get their dollars, they will get less Kwacha and in the end they will close shop. Even your plenty used car dealers will soon close shop as they will not be able to recoup what they spent when they bought dollars at K5300. Selling at lower Kwacha value means losses all over (i.e. people with many dollars could afford these cars after selling the dollars at higher value, but now when one sells the dollar at lower value, you can only spend lower). Quite a scenario which you who are celebrating cannot see.
@Tell It Like It Is:
Please, do not confuse issues here. The SI 33 does not fix the exchange rate (value of the Kwacha to that of the US Dollar,) NO! The Kwacha will be left to FLOAT in line with major currencies. If there is more demand for the dollar in the country, the dollar will, in due course, gain in value. If the opposite happens, like what is going on at the moment because people are rushing to convert their dollars into Kwachas, the Kwacha will gain in value. The govt is not saying that if you import goods into the country using dollars you are prohibited from selling the same goods at the dollar equivalent plus a reasonable profit. That is not what the SI 33 says! It only stops the now “fashionable” trend of quoting in dollars within Zambia. That’s all it does!!
@Yambayamba, do you remember that during Magande’s time as finance minister, the kwacha gained value tremendously without intervention. What was it that made the kwacha gain value that time? This time, the kwacha has gained because of SI 33, we all know. But what was it that happened that time? Getting the parameters that we had that time is key to getting the situation right. That is what I feel. Right now, I see the kwacha gaining ceaselessly (I may be wrong though) and then what will happen next, suppose that is the case? Exporters will really feel the pinch, which I am sure they are already feeling. For instance, the flower growers will fire many workers since they will get less kwacha to pay their workers.
Good evening
I haven’t done any serious analysis of the headlines on LT for a while now. That’s because of peer time shortage due to a multitude of commitments.
Nevertheless, whenever I can, I manage to steal a few minutes off my busy schedule to see where I’ve missed out. For today, I’m just going to browse through the stories and the long list of interesting comments from bloggers…
So whats wrong with just aying the appreciation is due to ban on dollar transactions?
Ok, i will come up with mine: Kwacha appreciation due to recent bye election campaigns.
Just too show you how pathetic Mr Sampa sounds…I challenge anyone to track the Kwacha against the dollar, compared to the past 4 days to present and you will notice that it has started to depreciate slightly. What’s he going to say when it back to pre June conversion rates?
WAKE UP people we have come a long way together to be spoon-fed this froth…use the internet to your advantage; explore and enlighten yourself!
need to look at miles performance at compass…he could have been using mwembeshi to pass his exams..or by the way the boy did agro economy..no wonder the boy is lost. leave such to HH.
Pie in the sky indeed. This is a mere self praise strategy agreed upon in a smoke filled boardroom. This sampa guy must start working on an excuse when the value of the Kwacha starts to nosedive in a week’s time. I however agree with the government for the ban on transacting in the US dollar. We should be proud of our Kwacha as a country. I hope RTSA has stopped charging people in US dollar at the borders?
Miles please dont start behaving like MMD was doing in their final years. Making wrong interpretations for political expediency. The appreciation is due to the SI criminalising local transactions in forex. It has worked but the SI on its own cannot sustain the exchange rate in the face of negative balance of payments, reduced FDI or badly shaken investor confidence etc. If anything investors have taken a wait and see attitude ( lack of foreign capital to participate in local bonds/treasury bills) probably is the reason why the ZMK got knocked down to K5300 per dollar. The SI is a legal/COSMETIC fix rather a shift in the economic fundamentals/parameters.
Wow soon we will be getting to the good old Kaunda days when the Kwacha was K80 to a dollar yipee!!!! (sarcasm)
.
The (K) Kwacha has not gained. This is A Synthetic Gain engineered to gain short term political publicity.
.
Miles you are not telling the truth. You of all chaps know very well how you have manipulated the Bank’s Back-Offices perception to fool a common man in the streets.
You are specifically sending Pro PF guys to go and work in private banks to monitor “Liquidity”, by compromising certain Bank Directors to employ these unqualified chaps to be eyes for State House. We don’t need that; we already have BOZ to ensure ethics are followed.
Then again BOZ is slowly becoming a Lame-Duck due political pressure to appease the status quo. MMD left a reserves with surplus, which you are draining undocumented month after month without fiscal frameworks.
Like any currency that has been buoyed there will be a period of volatility as we have been cautioned (in fact go to any minimal stock site and you will see this). To start dancing up and down celebrating the current downward trend would be to celebrate too soon. Sampa should have waited a while before politicking – or perhaps he knows he may not get a chance to say what he has said anyhow… MMD Bootlicker – big ups!
Just keep the damn kwacha strong. After all we import everything including tomatoes.
To be fair i think HH carefully questioned the legality of the SI 33, and did not delve much into its pro and cons. But like always what ever HH states is alway blown into bitterness and whatever. What a country
Point of correction, Ministry of Finance and No Planing
even tho am a man, miles can have me any day
I can imagine just how much anal mileage you are carrying! Am sure you wear Pampas to avoid bleeding!
MMD Bootlicker, I need your help on this one from ZWD. could this be true? The truth is finally emerging on what is making the local currency Kwacha appreciate against major currencies in the absence of production in the country.
The currency control by way of banning of trading in hard currencies has resulted in the Kwacha strengthening as businesses changed their Dollars into Kwacha.
But now government has gone a step further by forcing commercial banks to sale the one US Dollar at K4, 500 and below.
Sources in one commercial bank have explained that there is pressure on banks to sale the Dollars cheaply so as to give the impression that the economy is doing fine.
But Banks are running into losses because they purchased the Dollars at high prices
Cont……Meanwhile whether fake or real, the kwacha has hit its highest level in more than a year on Tuesday Commercial banks quoted the kwacha at 4,690/4,710 to the dollar at 1126 GMT, compared to Monday’s close of 4,775. It traded at a session high of 4, 640, its highest since April 2011.
@engineer, you must have been a very dull student of basic taylor series no wonder u ran away( diaspora) to go and wipe the asses of thoz old muzunguz
Miles missed it once more and wants to take the entire ship to a different shore. Signing SI 33 is part of the overall fiscal jujitsu required before the rebasing of ZMK. Dollarization brings in synthetic sinews associated with the true value of a local currency.
You want to sack up that artificial air out of the economy first then monitor inflation right before you can rebase your currency. This continues throughout the process until the old currency is completely out of circulation.
The entry level of the new currency into the world FOREX system is crucial after rebasing even if in real terms it retains the former currency’s strength. Investor confidence is measured using a very different set of variables, none of which has anything to do with dollarization, unfortunately.
@26 – FUTURE PRESIDENT-ZAMBIA
MMD-Chief-Bootlicker may not be an economist but his analysis makes a lot of sense. And he has been quiet consistent with his views unlike you and your CNP and CNPlets
Also, he quoted 10%, ZMK’s actual appreciation. Year-to-date is above 20% … using year-to-date or 52-week high/low measures is the right thing to do, they are more accurate parameters to use when it comes to benchmarking.
MMD Chief Bootnicker has now grown up. He has left those tantrums of his that characterised his postings. I wonder where his compatriot, the SS is. I guess he is busy trying to make ends meet since uncle Rups globe trotting has vamused. Congrats for maturing. Preach to those Watch galus to stop insulting and blog like human beings with dignity
Ba Engineer from kalingalinga @38, you used to insult ubuteko vehemently when the Kwacha was weak. You even predicted that it will hit the 10 pin margin. Today is the opposite and the same mouth is condeming. Muka condema nomubili wenu
# 6 Rude Monk: Financial education is good for our country for people will understand why the should invest and where they should invest. Why should one borrow money, why should the person not borrow when and what for as example. To get some enlightenment try to read books such as Rich dad poor dad by Robert Kiyosaki you will get an idea of why financial education is good for a country and its citizens.
@43 Jay Jay & Others:
Please, do not confuse issues here. The SI 33 does not fix the exchange rate, NO! The Kwacha will be left to FLOAT in line with major currencies. If there is more demand for the dollar in the country, the dollar will, likewise, gain in value. If the opposite happens, like what is going on at the moment because people are rushing to convert their dollars into Kwachas, the Kwacha gains in value. These are normal currency dynamics which even major currencies go through.
The govt is not saying that if you import goods into the country at a certain dollar value you are then prohibited from selling the same goods at the Kwacha equivalency plus profit. All the SI does is stop the now “fashionable” trend of quoting in dollars within Zambia. But Sampa is politiking!
Ba mwenye are removing dollars from underneath the pillows to exchange for kwacha to pay taxes, workers and other kwacha obligations. Simple law of demand and supply. There is now more demand for the kwacha. No investor confidence involved. Infact the confidence will erode once exporters start to feel the losses. The kwacha`s natural equilibrium currently is between 5,000 and 5,500. We know these things!
these pipo will always criticise even if something good is being done. let the government do its work pliz
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Has PF government got a smart cabinet minister? Since they came into power, all their ministerial statements are loaded ignorance. Not even a kid in elementary school in Zambia would issue such a statement.
Investors like those in the mining sector do not really care much about the exchange rate of the dollar coz most of their copper is sold on the London Metal Exchange,LME and the bulk of their money is banked overseas.Foe Wages and all,some of these mines trade amongst themselves within Zambia and transact locally and use some of that money to pay workers.For example,Mopani Smelters treat Concentrate from either Kansanshi or Lumwana.Also exporters can agree on prices in advance and they set a baseline operating cost in kwacha,the only thing Miles can emphasise on is that exporters can increase their productive volumes,achieve economies-of-scale and increase their revenues rather than depending so much on which direction the kwacha-dolllar exchange goes.For foreign tourists,yes!!!
Has PF government got a smart cabinet minister? Since they came into power, all their ministerial statements are loaded with ignorance. Not even a kid in elementary school in Zambia would issue such a statement.
Well, he is not Miles for nothing, he misses by a mile.
Ba Aus- Engineer! At-least today am impressed with your contributions; no insults and name calling but just expressing your views on good economic indicators.
Way to go my bro!
For me Economics as a subject is one of the most useless things to talk about because its never straight forward, truthful and factual. Thats why every thoery one proponds can be true in their own sense. This means we will never know exactly why the kwacha has suddenly appreciated because everyone will have their own version. i dont envy economist because i find them be clueless in what they can talk about any economy.
Whatever it takes, whatever knoweledgeabl causes of the Kwacha gaining in value the truth still remains. We must trust our currency Kwacha and not other people’s currencies. Thats the starting point and only way up.
In these days of high commodity prices, investors are willing to take risks even in countries that do not have investor-friendly policies because of the huge profits at stake. Even an unstable and corrupt country like the Congo DR is still able to attract investors in the extractive industries.
Zambia still remains a favourable destination for investment. FDI into Zambia in 2011 stood at $4.6 Billion in contrast to Zimbabwe’s paltry $105 Million. From October last year up to this year, the average FDI inflows per month stands at $250 Million. The change of government has not scared away investors. Incidentally, Zambia’s investment policy has not changed since the new government took office and this has been confirmed by the zambia Development Agency.
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