Bank of Zambia (BoZ) says that the announcement of the date for tripartite elections will not slow down economic activities or affect the performance of the Kwacha but will trigger more business activities.
BOZ said this in contrast to Standard Chartered Bank which predicted depreciation of the Kwacha against the US dollar following the announcement of the election date.
Bank of Zambia Governor Caleb Fundanga said in an interview that the economy and currency will remain stable during elections because a lot of economic activities are expected to take place.
Dr Fundanga said the supply of US dollars on the market is dependent on exports and not elections, saying trade will continue even during the election period.
“The supply of US dollars on the market is dependent on exports. The question one may ask is whether exports are affected by elections, the answer is no. We, however, expect the demand for election materials go up, but I don’t see a strong relation with the Kwacha,” he said.
Dr Fundanga said the slowdown in economic activity and subsequent depreciation of the Kwacha experienced in 2008 were due to the global credit crisis and the elections.
“The results of 2008 had nothing to do with the elections but the global financial crisis, portfolio investors withdraw from all emerging markets whether they had elections or not,” he said.
“International organisations are saying elections or no elections Zambia is on the path of positive growth,” he said.
But Standard Chartered Bank head of global markets Stanley Tamele said the Kwacha is likely to trade at around K4,900 and K4,950 during the election period because of the political risk aversion associated with the election period.
Mr Tamele said historically, when Zambia and other African countries go to the polls, there is a tendency of people and companies holding on to their transactions until after elections.
“Investors tend to withdraw money from the economy and people hold on to transactions and US dollars because of the risks associated with politics,” he said.
Mr Tamele, however, said the Kwacha would pick up at around K4,700 after the elections.
Two healthy opinions but I think that Dr Fundanga’s is more credible given the source of much of Zambia’s foreign revenue earnings. The mines are not closing or suspending their copper exports, are they?
However that is what I admire about economists, they look at different sides of the same coin, they even have different opinions on the same side of the coin!
BUT MOST OF THE ROADS YOU STARTED REHABILITATING ARE ON STAND STILL. WHAT A U TELLING US?
They supply of US dollars depends on the directions of the election. Banda’s Children are thieves, what are you talking about. Your economic principle will be influenced by such physical parameters Dr. Fundanga. But if Sat comes into power to whip these guys’ a.rses then your economic projections will come back into play.
Sorry if Sata comes into power to whip these guys’ a.rses
Ba fundanga, Amalwele nayamipwisha amano. muli kwati George Kunda. You dont know that elections can affect economy. Some companies can withdraw their reserves from your ka bank esp mines which fear sata and oppositions because they know their deeds. Dont be political C.i kala
Was the headline written by someone with dyslexia? What is ‘anpuncement ‘? I have never heard of this word? Any offerings from anyone out there? Please help!
Headline I can’t even proceed to read. What’s up with u chaps and your editting. .
@2 just wait patiently, I had the same opinion about the road they are tarring outside my house until I spoke to the contractor. I learnt that there are technical issues like surveying and studying the levels to tune up the final design etc before proceeding with the next stage. Don’t ask me what that is but I can assure you that finally they resumed the work yesterday, this time laying the crushed stones in prep for tarring. Just a reminder that this is technical business, it is not the same thing as the 90 days more money in your pockets business.
Even the investors know Mr. Sata is not winning the elections. That is why they’ll keep investing. There political analysts have reported to them that the day Mr. Sata becomes president of the Republic of Zambia is the day Hell will freeze over.
@3, If what you say were true, are you suggesting that you now want to change to even bigger and more greedy thieves? That is what PF is, a regrouping of plunderers and downright thieves, can’t understand your reasoning. Just look at the people behind PF, especially those that you cannot see, really hungry vultures for those of us who are priviledged to know them.
Yes indeed investors will continue investing because they know that the likelihood of a PF victory in the coming elections is very very slim 1/1000. What does PF think the reports of international monitoring agencies like the Economist Intelligence Unit and Business Monitor International are used for?
Oh by the way, it may be true that political rhetoric can also influence the stability of the economy and the exchange rate, but the kind of rhetoric coming from PF has been heard many times before and now no one pays any attention to it, it is just rhetoric.
This is what happens when politics starts influencing everything, even intelligent people becomes stupid. How can an economist not know that elections can have an effect on an economy. Because even mere speculation can influence the direction of investment and in turn influence the US dollar supply. this guy has become as st.upid as Dr Peter Machungwa who became Chiluba’s toilet paper.
#10,11 & 12 you are also stu.pid (but not the pf Government, incoming govt, is not stup.id, ha ha), elections which might influence, elections by their nature are unpredictable and the investors might hold back a bit which can influence the economy.Â
WHAT A USELESS PRESIDENT
These elections are very predictable. All the forecasts point to MMD winning…ask any political analyst. PF blew it when they bullied UPND out of the pact. Prepare for another 5 years of MMD….NAFUTI NAFUTI.
Chi Mr. Capitalist Pabwato!Â
The Zambian economy is in the hands of cowards
Whether we like it or not the kwacha will continue being stable even during elections and more investment like FDI will contnue to pour in the country.After carrying out serious  risk assesment political risk during this years elections is too insignificant to deter more investments because there shall be no change of gov whatsoever but just the usual people claiming that the elections were rigged!Wapya munzi!!Wina azalila nafuti!!
MMD have been selling zambia for the paast 20 yrs and can only show us shopping malls and shabby roads, while more than 80% of the population remain unemployed. Change winds are picking up, RB and your sons you better stash your stolen loot carfully.
Another blithering bean counter…i wouldn’t let an economist run my company!!Â
both are correct in the sense that BOZ will be forced to pump more dollars to keep the kwacha stable but the truth is that kwacha will go down but fundanga will have to push it up by offloading a lot of dollars on the market. this is political not economical