Monday, June 24, 2024

Kwacha depreciation due to high growth in imports-Gondwe


Bank of Zambia Governor  Michael Gondwe
Bank of Zambia Governor Michael Gondwe

The Central Bank has attributed the depreciation of the Kwacha against other international convertible currencies during the first quarter this year to a high growth in imports relative to exports coupled with falling copper prices on the global market.

Bank of Zambia (BOZ) Governor Michael Gondwe said this has also been as a result of the investor sentiments associated with the strengthening of the United States (US) Dollar.

Dr Gondwe explained that similar weakening has been observed in most emerging market economies such as Ghana, South Africa and Turkey.

The bank governor said this in Siavonga yesterday when he officially opened the 15thBoz media workshop being held at Lake Kariba Inns in Siavonga, Southern Province.

Dr Gondwe however said the Central Bank would continue to implement a market determined exchange rates and has intervened to check volatility and accumulative reserves.

On the country’s overall macroeconomic performance, Dr Gondwe said Zambiahas performed generally buoyant compared to other countries in the region and the world economy in general.

Real Gross Domestic Product (GDP) growth was registered at 6.5 percent in 2013 from 7.3 per cent in 2012 meaning that, such growth was higher than 4.9 per cent and 3 per cent for sub Saharan Africa and the global economy in 2013 respectively.

“This growth was mainly driven by expansions in the transport, storage and communication, construction, insurance and financial institutions,” Dr Gondwe said.

Real GDP per capital has also increased from US$332 in 2000 to $655 in 2005 and $1,784 in 2013.

Dr Gondwe said more growth was required in order to have a lasting dent on high poverty levels and make growth more inclusive and equitably distributed among citizens.

He also explained that, inflation has declined from double digits of the early 2000s to single digit levels currently at 7.1 per cent in 2013 from 2012 in December 2012.

This represents a percentage point of 1.1 per cent well above the end-year target of 6 per cent.

During the first four months of 2014, Inflation rose from 7.3 per cent to 7.8 per cent in April and this was mainly attributed to seasonal inflationary pressures associated with high fuel and food prices during this time of the year as well as pass through effects of the exchange rate depreciation.

Dr Gondwe also said owing to the general decline in in the rate of inflation, interest rates were expected to come down as well.


  1. Dr Gondwe is Lying. Do you really stomach what you’re about to say and see if it makes sense.

    There was more import into this Country in terms of Capital Equipment by the Mining and other Industries yet we had a very strong Kwacha. Bulk chunck of our imports is by the Mining Industry, an Industry that has now taken a wait and see approach, as no new Projects come on stream.

    Talk about Zambia please, South Africa and Ghana have own issues perculiar to there Industries there. Investor confidence is simply at it’s lowest ebb, everyone with the green bulk would rather hold on to it, or spend very cautiously. That’s what’s cause the Kwacha to depreciate.

    • how many reasons are you going to give ba Gondwe. Mutisebanya we easterners. we are wise people, but you absolutely lack wisdom bo Gondwe. Lelo ati its because the US govt gave a boost to their dollar, mailo ati, its because of the controversial statutory instruments your minister enacted to law, lelo ati its because of imports. which is which ba Dr.Gondwe.

    • Indeed, I am with you @ Directorgeneral.

      All those of you complaining about the apparent loss of strength of the kwacha, please just shut yer bl00dy traps and EXPORT, EXPORT , EXPORT (in Scottish accent or like Shrek or Sean Connery).
      The Japanese have for years kept the YEN deliberately weak in order to encourage export. And what do Zambians do?? Bleat like freakin sheep !!!!!

  2. Depreciation of Kwacha is due to only one reason, absolute lack of confidence in the current administration from top to bottom.
    Do you really think that even uneducated will believe in your doctored inflation figures?
    Another shameless liar.

    • These are ticks, live and thrive on citizens blood. Wasting resources on Media workshop in Kariba, why not have it in Lusaka in BOZ boardroom?

  3. Never heard such economic analysis as encouraging to nation monetary management. In fact such utterances from a senior government responsible for the central bank -BOZ makes the Kwacha even more jittery. This would imply the country needs Quantitative Easing (QE) to stabilize the national currency.
    The Kwacha has been under pressure ever since it sensed the head of the nation as alien to matters of economics at play responsible for national prosperity.

  4. Why bother to even read the whole article. ..from the photo one can conclude that this is “wishful thinking” economics! !

  5. Some of you armchair critics, when where you last in Zambia? Do you know why Dangote chose Zambia for his cement factory? 90% of the people l know re building, either a house, a commercial building or indeed a mini estate. You will continue on LT insulting while your friends are progressing.

    • Stop telling lies.
      90% of people you know are building houses?
      What a stupidity!
      Either you know only limited number of masons or you are under influence of politically induced blindness.

  6. All you who re calling The Governor names are just scavengers looking for opportunities in case the impossible happened. You just want to hear negatives. If anyone is interested l can sponsor two by way of air tickets to go n see the amount of construction going on.

    • Great, give us positives. Not electoral “gimmicks” but factual ones. The ones which have immediate impact on the life of the majority of Zambians, not the ones where few benefit at the cost to majority.

  7. Dangote planned this investment before the current mess. What building are you talking about – the creation of a massive shanty compound? No planned settlement – everything looks like it was designed by Picasso. Just wait and see what that disaster of a country you have created will look like in 10 – 20 years.

  8. Very worrying when professionals start behaving like cadres to please their masters!
    We don’t need all this rhetoric!
    What we want to hear is what you are doing to ease pressure on the now valueless KR!
    We are tempted to conclude that we have an under qualified BOZ governor who cannot take control of things and that things are bound to get worse under his watch and so we should not get surprised when we get more of the same!

  9. Chabwera… What has Dagonte got to do with the Governor’s analysis on the deprecation of the kwacha ?

    The ppont here is to many excuses…

    You want o sound smart in actual sense you are useless…

  10. uuuhmmmmmmbbababbbbbyanhhhhh?Someone show me how to write the sound of yawning…These guys are biggining to sound like the Malaysiam PM over we know what it is…

  11. Why do we continue to tolerate failure at our expense gondwe and chokwanda should be fired.they have failed PF in 2016 you are fired

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