Barclays bank managing director Savior Chibiya has said that the current 10 % appreciation of the Kwacha against the dollar could be attributed to the ban of dollarization in the local transaction.
Mr. Chibiya observed that following the ban of the use of the dollar in the local transactions, there has been increased demand for the Kwacha in the local economy.
He however, noted the importance of ensuring that the country maintains stable exchange rates avoiding affecting the country trade activities.
Mr. Chibiya indicated that having a very strong Kwacha would make the exports very expensive, He has also observed the need for the country to grow its export based industries saying this would also contribute to maintaining a stable Kwacha.
QFM
wonderful, where is HH nad mumba chimibabe,pf working , yes even if its takes time to put things in place 4 the pf but more in our pocket will be there. viva pf, 10 months in power appreciation on kwacha what more end of the end year nizeeeeeeeeeeeeeeeeeee
Naine ndeloleshafye
Great news, more demand for the Kwacha, all the thieves are offloading the Dollars on the makert. This is great news guys. Thieves have no choice but to bring back the stollen money to Zambian market. where is HH really…????
Good afternoon
The appreciation of the Kwacha is definately a good thing, whether it can be attributed to the dollar ban or to other measures. Mr. MD, just make sure there is strict and transparent management of finances in your institution and I’m sure gov’t is doing what they can to keep investor’s confidence in the economy and improve the starndard of living for the avarage citizen. After all that is what they were voted for.
I guess the Ban on dollarisation will help in fighting money laundering.
EFYO TWAVOTELE PABWATO…WHAT MORE APALI 5 YEARS…LETS SHOW THEM HOW TO RULE
Eya e. How can a resource rich country such as ours spot a valueless currency? May these measures be upheld. Hopefully, it will not be too long before the world money markets realises that there is such a currency called Zambian Kwacha.
I agree with my brother #4. Donchi Kubeba…..Shi……
The Appreciation of Kwacha is a good thing, but do we hav any economic activities aimed at building a strong export base? so that the kwacha can maintain its position. without Exports it means we havnt gone anywhere.
We all know that the appreciation of kwacha is not as a result of Economic growth, wat we realy need is to work on our economy then the rest will fall in place. ”
Thnx n’ keep the hope high.”
:d
The difference is that the Kwacha was even stronger during the RB and Levy Mwanawasa time DUE TO PRODUCTION, not through dictatorial policies that are not linked to economic production. At one time in late 2007, the Kwacha reached K3,500 to the Dollar and K5,200 to the British Pound, but the economy was thriving and that is what even attracted a lot of investment in real estate including shopping malls in all towns on the line of rail from Kitwe to Livingstone. Although banning is fine, the government must realise that simply banning the dollar will not sustain the Kwacha – As exports become expensive, foreign investors will close factories and instead erect wholesale warehouses because it will be cheaper for them. Again, we have seen this happen in the past in Zambia.
I beg to differ. The value of exchange losses cannot be material enough compared to the opportunity losses of discontinuing operations of a business. The ban has simply downed the demand for USD of course, this is not due to the economic performance of the country. However, trading in USD reached unprecedented levels to an extent that all prices were quoted in USD by choice and not for the purpose of convenience. We have to face facts, Zambia is generally an importing country. We import education, raw materials and even finished goods. Your skepticism is quite scholastic I must admit though.
what production was there which is not here, baba mulibakopo with a negative mind
@Twaliwina- I can tell you are a PF supporter with not a shread of independent analysis. Zambia had more production in the UNIP days than today. The tertiary industries such as micro finance, insurance and furnishers have been quite dominant in recent years. The person you retorted to call dull did not use any profane terms against you thus indicating your lack of level- headedness. You represent exactly the kind of mind an ignoramus would vie for.
@Chitapi-meno-ngwe-mutu – You will also remember that the copper prices collapsed just after 2007 and the melt down set in.
Who benefits from a weak currency? the exporters. Who are they? Multinational Mining and foreign Companies. This means that we sell our copper at a give away price. We actually give the copper to the world for free.
Can you imagine all the neighboring countries have a stronger currency as compared to ours, this is because they want us to mine copper in in weak kwacha, and give it away for free for their benefit.
Which is good, our export to be expensive or our imports to be cheap. Majority will go for the later because imports benefits the more small scale locals doing business.
When you have a weak currency, it does not mean you export copper at a give away price as the importers pay you in forex meaning that you get the same price as any other copper exporting country. The price of copper is set at the London Metal Exchange (LME).
Exporters gain from a weak currency because they get more value per dollar that they earn. NGO’s that get donor funds in forex also gain from a weak currency because they get a lot more Kwacha per dollar that receive.
A weak currency will not benefit the 13 million Zambians because salaries are low in Zambia and most of the things we buy are imported and are bought in forex. that means chinese products although cheap will appear expensive to a loca Zambian and vice versa so why not just go for a stronger currency since we import molre than we export or better strike an equilibrium
Do we have factories?
I dont know who bewitched Zambians, they are saying we dont have industries, but we have cuntries such as Soudhi Araba whose only industry is oil mining and their currence is good. In Zambia we have copper being mined every where and beind sold every hour ….why should we have a good currency??? Really you guys are just dull who cant think of ways of making Kwacha strong. PF should be remmended…thanks PF for the work well done.
there is no economic reason for appreciation, it jst came like BOOOM!!! on one gets a pat on the shoulder for it.
I find it ironic how you assume to have economic knowledge when you cannot appreciate the fact that government regulatory interference is an economic reason for currency appreciation.
i wouldnt be surprised to know that your profession is probably nursing
Explaining the obvious. I have learned nothing from the statements made in the article. Actually, Barclays Zambia has isolated itself from the country’s affairs hence the reason they are third or fourth in the pecking order after Zanaco, Stanchart, Stanbic.
The monetary policy are critical to any countries ecomnomy. I am not an economist but at least I know that strict monetary policy are essential. Zimbabwe id almost drowning because of using the dollar. Imagine they can not print the dollar they have to get authority actually buy from USA . What we need is promote production and export of our goods and services that is where I come in with Science and technology innovations that will stimulate quality food products that can be exported instead of rotting and being thrown out. PF for a start shows good signs
But when were the factories closed? By who? Which party? They will not come back easily. It requires concerted effort to re-establish these industries through a partnership with the private sector. UNIP had the ZIMCO, INDECO, FINDECO vehicles of delivering various economic ventures that established even rural factories like Mansa batteries, Kapiri glass, Mongu cashew nuts, Lwangwa Bicycles, Mwinilunga fruit canning, Kawambwa tea and so on and so forth. In the new political dispensation we agreed to change the economic order and privatised. So we should seek to achieve more than we had. Money nust only exchange hands where there has been some activity undertaken. People ought to earn money as opposed to just getting it for doing nothing. MY ZAMBIA
Excellent observation. Actually, most Zambia forgo the fact that industrialisation is the only means of significant job creation (blue collar jobs).
Ba kb, you hide dollars in your home, tomorrow sell more because the kwacha is actually reaching K3500. We know you speculators and we are aware you are sweating of the the current appreciation.
If there is no economic activity then the depreciation was also artificial. I don’t believe by mare pronouncement the kwacha should appreciate. If it is so then even the depreciation was questionable.
Are you allergic to good stuff happening in our land?
This is a good sign, we now need the PF govt to improve on employment for youths so as all can enjoy the national cake. On the other hand please let us an industry based on agriculture as the basis to take this economy to another level.
Well articulated blogs. We have seen our currency in that situation on several occassions and my question is whether this is long term appreciation or not.
The kwacha appreciation is highly temporal and is not sustainable. What the PF should do is to encourage manufacturing. They can do this by reducing import tariffs on all manufacturing equipment and raw materials. PF should create tax free zones and exempt all manufacturing firms from paying income tax. The government should also come up with strategic industries in rural areas to curb the rural urban drift.
govt survive on taxes my friend, so no tax then no money to pay them s´civil servants. if i remember very well mwanawasa had a think tank team, is it still in existence
@ LORD VOLDEMORT (THE DARK LORD) – in your response to my earlier posting, you proffer an interesting view which I didn’t carefully consider – so yes I agree with you that the Kwacha is possibly sustainable because the trading in Dollar was simply by choice. Infact in the balance of things the banning may actually lower production costs as imports of production inputs become cheaper. I also notice that the value to which the Kwacha is being corrected by the ban is within the same regions where it was at the time many foreign investors entered our economy a few years ago, so probably my being overly skeptic may be a slight overreaction. Let us keep our fingers crossed. Don’t worry about most of these PF cadres, their focus is often on their party and not the country.
Imports of production imputs may become cheaper while export earnings will drastically reduce. The reason is simple, the mines will sell the copper in dollars which can only buy less kwacha and the tax is paid in the kwacha unit. And if you look at the global scheme of things you will agree with me that the mining (extractive) industry is really big compared to the secondary industries in which the imported inputs are mostly used. therefore a big drop in production costs for secondary indudstries will not really cushion the losses from the major income earner. I think there will not be sustainable stability at current TX prices between the 2 currencies it will go the obvious way….. where the market dictates. Cosmetic quick fixes are simply just that.
Just wait and see before it gets back on a yoyo as usual. This is just a temporal measure that is not backed with anything productive. Â It’s like magic and it cannot be sustained.. I know very soon it will be back to its usual huge figures just wait and see. I rest my case!
@20
Brilliant mind!
We need such as you in key positions in GRZ.
The so-called appreciation will not last. A similar scenario had happened in the past during Chiluba’s administration.
Check fridays rates the dollar is up again.
For how long?
We have the same old story exports will be expensive for Gods sake, the Economy needs drivers look at Wall street and the mess that luck of supervision created for the American Economy.Viva PF the days of Mwedya mweka Daddy are slowly ebbing away
Spot on. No need for excitement on Kwacha appreciation. Just let the kwacha float and find its level.The rise in minimum wages coupled with furtherKwacha appreciation will most certainly throw export industry based employees on the street as exporters’ incomes/profits get stressed by a strong ZMK on one hand the wage bill escalation both in ZMK terms and in dollar equivalent. Production of goods and services should be hallmarks of a strong currency not Statutory Instruments. Not that I support dollarisation but the exchange rate must not be artificial.
This one way to get free publicity for your firm in Zambia; make bloody obvious statements about the economy.
This appreciation of the kwacha is short term to maintain it we need to export more products from Zambia. Keep in mind what happens next when the people with dollars stop offloading them that is to say when they finish offloading the foreign currency in exchange for the kwacha. FOR NOW this is a good thing, all we have to do is work on maintaining the appreciation when it stops to appreciate.
If you don’t live in zambia,better be real on developmental issues like the appreciation of the Kwacha.First,before we rejoice…Do we have an economic policy?what could have factored this trend and is it temporal or permanent…The habit of being happy today and sad tomorrow is bad mind you we were……through Don’t kubeba…it might be a kubeba thing watch out
Maybe
This appreciation has more to do with speculators and market forces than deft economic management by the PF mandarins at BoZ. Actually keeping the kwacha exchange rate within a narrow range of plus or minus 3% over long periods is of much more importance than a sudden appreciaton of this type.
Before we cheer too much on this appreciation lets remember it comes with a certain cloud.It means more uncertainty for investors because they can’t tell which way the exchange rate is headed.Investors like predictability which is why i’d rather cheer a narrow band of stability on the exchange rate than a 10% kwacha appreciation.
I am not an expert in the field but when it comes to economy, inflation, strength of currency, i don’t believe in miracles…
You dull creatures, always wanting the kwacha to depreciate just coz you dont want PF in office. You were blaing PF for the depreciation of the Kwacha always and now they have done what you wanted them to do…the kwacha has appreciate and yet still you blame PF, what kind of creatures are you? And this nonsense of losing exports, does it only happens with Zambia while in the countries such as Malawi it does not?? Really you are dull creatures burning with hatred and chocking grudge. Please PF never listen to this devils who by all means want you to fail. Dull creatures they are.
you are really dull, this is very clear from your post, just read it again…
so does it mean big companies like zesco and CEC will will transact their bulky electricity tariffs in kwacha, farmers house will charge the rentals on their property e.g arcades center in kwacha our mining companies will their suppliers in kwacha. it appears there consequencies for the companies and their share holders
interesting arguments
Viva PF
Zambian businessmen who dealt in dollars with trading benefitted at the expense of the poor worker who was paid constantly K250,000 when his employer who sold in dollars never adjusted the salary due to depressed kwacha.
Mines won’t be affected coz Copper is not sold locally and it will be a saving on wage bills coz nothing like dollar paid employees category or paying foreigners in dollars. Importation of machinery is in dollars not kwacha.
And importation of vehicles will be reasonable.
Shallow economics. Temporal measure. No new industries and now with the policy none will definitely come!
Why getting so worried about foreigners at Arcades or Manda Hill who bring cheap items bought eg at 1 dollar and costing K5000 at time of importation and sales it at K5350 when our kwacha depreciates after two weeks. Remember he won’t adjust the salaries for your sister working for him but his fellow junior foreigner will benefit cos his on dollar salary.
Good sign, but its not a long term it happened also during our late President Dr. Mwanawasa Kwacha became strong then after Mr. Levy the weaker Kwacha again. Let us wait and see where we are going very soon we shall be in December and xmas is near.