THE business community has challenged Government to come up with a win-win decision on the ban against quoting prices in foreign currencies to boost foreign currency reserves in Zambia.
Zambia Association of Chambers of Commerce and Industry vice-president for the northern region, Raj Karamchand said boosting foreign currency reserves would enhance the economic development in Zambia instead of bringing a blanket ban on quoting of goods and services in dollars.
Mr Karamchand said enforcing stringent currency regulation bans had the potential to send a wrong message to would-be investors and could curtail investments and foreign currency inflows in Zambia.
Finance Minister Alexander Chikwanda signed Statutory Instrument (SI) number 33 of 2012 on May 7, 2012 which came into effect on May 18, 2012, prohibiting the quoting and pricing of goods and services in foreign currency.
But speaking during a chief executive officers’ meeting in Lusaka yesterday, Mr Karamchand said the blanket ban on pricing goods and services in dollars would lead to further depreciation of the Kwacha and increase inflation levels in the country.
“The slowdown in foreign currency investment may naturally lead to a slowdown or may even shut down many industries and associated trades, thereby contributing to unemployment and loss of Government revenues,” Mr Karamchand said.
He said the Bank of Zambia (BoZ) and Government should ensure the gains the country had achieved were not eroded by introduction of abrupt measures and regulations.
“As a country we have scored a lot of successes in the business environment and other countries have learnt from us and have just bettered their systems.
“We should learn from the recent economic experiments and experiences of some neighbouring countries such as Zimbabwe, Tanzania and Malawi where stringent foreign exchange regulations along with other economic measures have led to serious economic slowdowns,” he said.
Mr Karamchand said regulations on foreign currency transaction had the potential to create distortions in the economy and could boost informal activities at the expense of the formal economy.
This would have adverse effects on official sources of foreign currency and Government revenues.
Mr Karamchand said tough measures had the potential of creating a foreign currency shortage in Zambia because there was a likelihood of the business community hiding the foreign currency or taking it away, thereby encouraging informal foreign exchange activities.
He further said banks should be allowed to accept foreign currency deposits until the grace period elapses.
And BoZ director of financial markets, Peter Banda said the central bank was aware of the issues raised by different stakeholders and would continue to listen to their concerns before responding.
“We know the SI has affected different entities in different ways and we are currently in the listening mood, but we must point out that the measure is not aimed at introducing foreign exchange controls,” Mr Banda said.
He said the ban on quoting goods and services in dollars was meant to strengthen the Kwacha as the national legal tender.
let this karamafyofyo go to hell. Zambia for Kwacha…
It seems careless talk by PF ministers on a number of issues is slowly but surely catching up with them. Remember the story of fake kwacha, remember the lie of kwacha and rebasing will make it as strong as the kwacha of the 60’s. True investors will immediately reconsider to deal in your currency, kwacha in this case, the moment they sense that the govt does not seem to understand what they are talking about. Mr Finance Minister just back track on this one or else you will throw this kwacha into free fall at the speed exceeding terminal verocity under earth’s gravity. Hoping this time around you listen.
ki ki ki ki you are quite funnny bululu
And who is this hot potato Indian who seems to know more about economics than our finance minister and his advisers?
# 1 don’t just bark like a dog with rabies, the KWACHA is the only legal NOTE period why should they quote us in dollars when we get paid in Kwacha ? if you are not happy then my dear move to Congo or Zimbabwe.Mr. Chikwanda don’t even listen to them not long ago they stopped quoting in dollars but the MMD government relaxed and People started quoting in dollars. PLEASE DON’T LISTEN TO THEM WE ARE NOT IN ZIMBABWE OR CONGO
#1 is on your side you *****….what blog are you reading?
i couldnt see that ??? do you even know who is on your side or not?
I am yet to come across a country where theft is so stark! I mean, your Kwachas are stuck to whatever they are and yet you are made to fork (at most occasions) more Kwacha for whatever dollar is quoted in doing business!!! If you go to RSA as an example, there are times when the customer wins (because the dollar is weaker vs the quoted price) and times when the customer loses. In Zed when the going is tough and the dollar is weak some outlets even refuse to take Kwacha so that they can hoard it for the next time the Kwacha gains. PLAIN THEFT!!!
Thats what happens when you dont consult.
Already the business enviourment has changed things are not okay on the ground the dollar issue the rebasing issue has eroded local and foreigh people perceptions on what and where we are heading too
The whole idea is good but just not the “Total blanket…..”
The “immediate effect syndrome” will have adverse impact on that country of yours.Its not a secret anymore that you guys are incapable of running that country,just continue with the former regime’s programmes to save face and for the sake of Zambia’s posterity.
Let us respect and support our currency. This Indian must be benefiting from the relaxed atmosphere. The kwacha is the legal tender in Zambia. In SA you stop transacting in FC immediately you reach the airport or the border and this has gained the rand a lot of respect. There is only one currency and it is the kwacha. There are several facilities where one can easily convert other currencies and transact in kwacha freely. Conversely, this will help strengthen the kwacha. You need to see what is in it especially when you are rebasing a currency.
One of the South African Airline will be pulling out of Livingstone soon because of this as well as the high costs of touring Zambia. They will soon be flying to Victoria falls, Zimbabwe. That surely is good for the country’s economy
….is not good for the country’s economy. i meant to write
I kinda’ liked it better the first way the sarcasm.
Cheers.
Any business that wants to operate in Zambia must use Kwacha. Period! If they dont want to use Kwacha let them leave and I know because business is good, they will stay. An average investor knows that each country has its won legal tender. There is no way you would expect a serious foreign investor who wishes to do business in Zambia to think he will be selling in some foreign currency. Big investors (which we require actually and not those who cook nsima for us) have adequate structures in place that deal with the volatilty of their various subsidiaries across the globe. Look at Telecom companies for instance who sell in local currencies and yet the majority of their CAPEX and OPEX is in USD and yet they make huge profits. Where necessary they know how to Hedge.
I totally agree with the Minister of Finance. The kwacha is the only legal tender note and as such, let all transactions be in kwacha. Foreigners should learn to respect and abide by the rules that are set in this country. Our freedom fighters fought for us to be independent and not for us to be dependent. Lets embrace this notion
When you go to Zambia with USD, visit a bank or Bureau de change, exchange your dollars for kwacha and transact whilst you are in the country. When it is time for you to leave and you have kwacha, simply visit a bank exchange your kwacha for dollars and fly out. The exchange controls are still free and the same. Only that Zambia does not allow you to be buying and selling things using foreign currency domestically. I am failing to understand where the problem is really.
Ooh I forgot to say that this Bank of Zambia Governor does not impress me. He looks too dim. I hope he knows what he is doing and will delivery to the beloved people of my country Zambia. I also hope that there are genuine motives in what they are doing. Sometimes shit happens in these governments and the citizenary get to know it very late after they have been reaped off and try to correct things through courts. The inertia is frustrating and wears the people out. The whole thing stinks to high heavens. Can someone remember where all these cases end? They just go quiet. Remember that even KK had about 169 counts. What happened?
I think you are too much of a hooligan to blog on this intellectual issue. The governor is knowleadgeable and has a very good understanding of the issues. His dim eyes do not mean he has blacked out.
Let us agree as nations to use one currency
All the government is trying to do is bring sanity and order to the the financial and economic sector. The legal tender in Zed is the Kwacha and Ngwee. Those advocating for the dollar have vested interests, the thieving B-a-s-t-a-r-d-s, The bloggers here supporting the motion are plain thick and simply do not know what they are talking about.
Ngwee??? Where have you been?
What mr samya is saying may have some truths, but it is also clearer that the element of dollarisation really work to the advantage of these asian business men. it allows them to evade taxes by resporting or not reporting any profit. to a lot of extent, it allows them to comfortably run an efficient underground economie. They can buy items using their dollarised financial system with sharia compliant arrangements that make the dollar flow without any notice of the government. Yes, of course what he is saying is true as long as this brings in bureacracy in getting business done. The government must definately come up with a WIN-WIN solutions to this issue, otherwise the best is to Zambianise (indeginesation) all the businesses.
These are business people and they will twist things their way until they make profits at the expense of you folks who are criticizing and insulting from your empty heads.
The kwacha is the only leagal tender note in Zambia. All I can hear from the Vice President of ZACCI is greedness.
It erodes the nation it’s integrity and dignity and indeed it’s economic and political confidence when it adopts another nation’s currency as a legal tender. There is no long or short term economic or political gain by Zambia to use a foreign currency – you only do that if you and others have no confidence in your currency but that is not the case. Using kwach in fact brings in foreign currency as that currency gets converted into Kwacha whereas dollarisation of Kwacha in fact provides a chance for people/businesses to take the dollar out of the country. Zambia like any other has its own currency and every trade has been and should be done in Kwacha. In fact debasing of the Kwacha would support the need to use Kwacha and not any other foreign currency. I smell a rat among businesses.
#3 failure to reason with someone result in insulting. There are some business which can only qout in dollars as this is a medium for attaching value to their services with easy and reducing chances of lossing out in case kwacha go crazy. In order to cushion that effect what businesses will do is simply put a markup on all their products as a safe net. This to a man on the street is increase in price for the service or product. For those studying and taking foreign exams but Zambian institutions administering them implies paying more. What the govt needs to do is to identify which business should be allowered to quote in dollars, which should not. For instance DSTV services and services of such nature should be in kwacha only; this was done with mobile topups.
kazadi wa ngoi was #3
Why should Zambians pay in dollars when they earn Kwacha?
Look at IAS 29, if we quote everything in dollars it indicates that we have a hyperinflationary economy
Wrong
Wrong
“Characteristics of the economic environment of a country which indicate the existence of hyperinflation include: [IAS 29.3]
– the general population prefers to keep its wealth in non-monetary assets or in a relatively stable foreign currency. Amounts of local currency held are immediately invested to maintain purchasing power;
– the general population regards monetary amounts not in terms of the local currency but in terms of a relatively stable foreign currency. Prices may be quoted in that currency;”
The world has become flat economically…..in this information age transactions are accross borders via electronic media. KK and UNIP tried this and …………!
It seems people are up to criticize anything the Gvt tries to do. Mr Indian man or what ever you are called, go and advise your gvt in India or Bangladesh.
Let the Tourism and other related sectors be exempted from this…..we can buy tujilijili in Kwacha
Zambia population 13m
Currency ZMK : Kwacha
BANK OF ZAMBIA.
I PROMISE TO PAY THE BEARER ON DEMAND.
KWACHA AND NGWEE FOR ZAMBIA
kwacha ngweee ziwayaa kwacha ngwee ziwaya… ai mwanilata..oooh munilekele ..munilekele maliposa ni telalini kwacha ngwee ziwaya!
Kulibe muntu wina woposa kaunda amenya nkondo ndi mau okha!
Wavumbwa tambala
corrupt crooks and looters are afraid
it will be shady to convert huge usd bribes in kwacha
YES, ITS TRUE WE MUST CONTINUE QUOTING PRICES IN DOLLARS BECAUSE EVEN AMERICA AND UK QUOTES PRICES IN KWACHA.
#24 Zed Poor People, careful who you want to start a thing with. Do you even understand English, we cipuba we. You should rewrite your grade 12 exams before exposing your illitracy, shaaaa!!!! – Hellboy.
Kwacha is the only legal tender. Read the note.
we need to put our foot down and maintain the kwacha as the only legal tender. Whoever has the dollar must go to the bureau and change. Effectively we are saying that there will be demand for the kwacha, thus making it stronger and stable. Further more the govt is able to get taxes from transactions done in kwacha. i doubt if at the moment companies issue receipts in dollars and pay taxes in dollars.
ZMK is freely convertible, thanks to FTJ Chiluba. We dont have forex controls, so what is this Indian business man complaining about? Let all trade in Zambia take place in Kwacha. Only countries with hyperinflation resort to using other countries’ currencies. Shamful. Zambia is stable, we dont need to trade in US dollars.
The Govt must not give in to greedy businessmen. Dollarisation negatively affects ordinary Zambians while traders are shielded from any instability, which in turn is caused by dollar dependency.
I do not under this Mwenye. In south africa, it is rands everywehre. Dollars are totally not allowed.
For sure you may want to pick an urgement to a level of emotions but I will not take that route for simple reason; I know my education status and it is sound to a point of debating based on issues. If english is sentence construction is what you think to be ideas then I have no further issues with you. You can insult all you want but facts will remain for all to see, who is debating with facts and who is using emotions to think. How I wish I could show you my certificates, degrees…lol
ok the use of the zambian currency ids gud, but the period for companies to implement it is way to short. they are alot of things involved, like converting alot of stuff in their accounting packages, now we are doing this in a rush where by we will only get to see the losses at a later stage. we need more time to have this process working smothly for both the endusers and the government.
What? I cant believe it! You mean you are a company operating in Zambia and your accounting package was not in Kwacha?
Ba kelvin,we have a department tasked to print kwacha at BOZ do you want it to become redandunt?We should know that in every move some people will benefit while others cannot.Are you happy to pay for your rented two roomed hut in dollars?
Kwacha is our legal tender and it should be protected!
So one Indian man from an organization we had never even heard about until today constitutes the “business community” these days?
Why assume the guy talking is not Zambian :)
That said if he’s the Pex Hydraulics guy then his head office is in Cape Town… feeling the pinch of a new reality. Change never comes easy.
Why should Zambians who earn Kwacha be expected to pay for things like rental of their living place or their place of business in US Dollars? Does this chap have any idea how annoying it is to try to buy dollars in Zambia? Selling is easy, but to buy dollars to pay your rent? You go to the bank or bureau but they “don’t have”
@#43 A Phiri, very correct – the South African businesses and individuals using Zambia as a loophole through which to externalize their money into US Dollars (because South Africa has exchange controls but allows investment within SADC, and Zambia has no exchange controls) will feel this badly. These are not genuine investors, they are just money launderers essentially (although legally)
If prices are quoted in dollars, the buyers of goods and services will be looking for the dollar, creating demand for the dollar. Then the Kwacha will be rendered useless. If some transactions are in dollars, are there receipt books in dollars for ZRA to inspect for tax purposes? People must want the Kwacha for it to have value. With the rebasing, it can make sense. That is where Chikwanda is driving…
Zambia ia not a failed economy and its legal currency is Kwacha, the in place does not allow dual currency to be used in this country and as such the law should be obeyed, nothing has changed only that the previous governments were not courageous enough to enforce it
ZAMBIANS CAN BE A FORCE IN DEFENDING THEIR COUNTRY WHEN THE COCK COMES TO ROOST. THE MONEY LAUNDERERS USING RELAXED ZAMBIAN SYSTEM OF QUOTING AND INVOCING IN US DOLLAR ARE IN TROUBLE.
HON. CHIKWANDA, THE ZAMBIANS ARE WITH YOU GO ON AND STICK TO THIS RULE. RSA HAS REAPED THE BENEFITS OF THIS RULE IN THE STABILITY OF THEIR RANDY. THIS RULE WILL ENSURE THE REBASED KWACHA IS STABLE. MR. KARAMCHAND MUST UNDERSTAND THAT ZAMBIA HAS A LEGAL TENDER AND IT IS THE KWACHA. JUST AFFORD BUSINESS HOUSES A PERIOD TO ADJUST, BUT INSIST IN THE NEXT 60 DAYS IF YOU QUOTE, INVOICE OR RECEIVE PAYMENT IN US DOLLAR YOU ARE IN CONFLICT WITH SI 33 AND THE PENALTIES WILL IMPOSED UNRESERVEDLY.
For a tourists’ destination town like Livingstone,it may be difficult to make it absolutely illegal to deal in other foreign currencies and not just the American dollar.Better still,debasing should have preceded the newly introduced law.Since the emphasis is on quoting and not trading in dollars,it may be assumed that one may quote in Kwacha equivalent but transact in dollars.Shouldnt commercial banks and bureau de changes be advised to extend their services for longer hours ?
Botwana and South Africa are a better economies compared to Zambia and they do not quote in dollar. Can we learn from them?
By applying simple logic, all prices and transanctions in Zambia must be in Kwacha. Legally it is not allowed to transact in any other currency when in Zambia. Those deviating from the law must be penalized.
Ichi chimwenye, let him go and tell the indian government to stop usage of rupees as legal tender in india.
This is the very reason I am vehemently against dual citizenship. Patriotism thigh an ugly word these days is wonderful. Go to England and quote goods in Pulaski and see if you are not arrested. I dislike the PF governments manifesto, but on this one instance they have proposed a true dedication to our freedom fighters and the whole nation. Quote in kwacha and ngwee. If you are but hurt you can trade in Mumbai the Chinese are willing to replace you; infact Zambians now also have capital :).
Its only in zambia where pipo are so brainwashed to the extent were anything zambian is useless. Look at the accounting qualification… Even if ZDA and BaAC from copperbelt university are the best, most useless,primitive HR managers prefer ACCA,CIMA. To them having these qualifications is like you are a sorcerer, magian. Look at football, most primitive zambians support amateurish english premier league than skillfull faz/mtn super division.
What nosense is this indian talking about? Why should they sale ii dollars while they are paying workers in Kwacha? whay cant they also pay in kwacha? What foreign exchange distortion is he talking about? Has gonvt started regulating the forex…the answer is a categorical No. So then what is he crying about? This is nonsense, these guys should know that no more Zambia shall be manipulated as they did previously. Kwacha is the acceptender currency in Zambia and hence prices should be quoted in kwacha, who does not know the meaning of quoting in dollar? is it not that the price keeps on increasing? Please tell this Indian to go and cheat other countries and not Zambia.
Interesting that with everything that was discussed during this meeting, the BOZ Governor was not even quoted as saying anything……… very telling indeed….
The problem is our GRZ lack of price controllers which are longer in existance I remember during KK we used to have them. Kwacha used to strong.
Can a business close because you have been asked to trade using the country’s legal tender? No. And there are baruex de change and banks for purposes of changing forex to Kwacha and vice versa. Those against this are money launderers.
YOU SEE THIS INDIANA JONES IS A BUSINESS MAN, TRADING IN DOLLARS ONLY BENEFITS THESE GUYS WHO DOING BUSINESS NOWANDA THIS JONES IS CRYING OUT. MAJORITY CITIZEN, REGULAR CITIZENS LIKE ME HAVE WELCOMED THIS VERY MUCH CAUSE IT AFFECTS US WHILE THE BUSINESSMEN DONT EVEN PIPO GUD SALARIES.
ITS VERY SIMPLE MR INDIANA JONES, GO TO AMERICA & TRADE IN DOLLARS!!!
IMAGINE LANDLORD ASKING TO BE PAID IN DOLLARS, THAT MEANS YOU WILL PAY MORE THAN YOU RE SUPPOSED TO PAY.
SO THESE BUSINESS MEN BENEFIT MORE, CAUSE CHANGING KWACHA TO DOLLAR ITS ALOT OF MONEY.
we are in Botswana not far from Zed and come here and use ur USD and see if any one will accept it-nobody for certain.Use the national currency.We suffer alot pa boarder coz they ask us to pay in USD but they accept Pula and Rand and these are Zedian workers contributing to undermining the legal recognition of own legal tender-thanks mr Chikwanda and your team.
Kwacha Ngwee, Kwacha Ngwee Kwacha Ngweee!!!!!!!
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