Bloomberg News reports that Zambia’s kwacha retreated to a record low against the dollar, depreciating more than any other currency in the world this month, as lower copper prices and a tax dispute with mines curbed foreign-exchange supply.
The currency of Africa’s second-largest producer of the metal, used for electrical wire and water pipes, weakened as much as 2.3 percent, the biggest slide in two months, to 7.035 per dollar. The kwacha was trading at 6.9610 as of 2:03 p.m. in Lusaka, the capital. That extended losses in May to 9.4 percent.
The price of copper, which accounts for about 70 percent of Zambia’s foreign-exchange earnings, has declined 6 percent this year. Zambia Revenue Authority withheld more than $500 million in value-added tax repayments to mines, saying they didn’t comply with rules requiring import certificates from the countries their copper ends up in. The dispute is close to being resolved, the Chamber of Mines said on May 23.
“Supply of foreign exchange from the mines just hasn’t been up to the usual levels,” Razia Khan, head of Africa research at Standard Chartered Bank Plc (STAN) in London, said by phone today. The mining companies may be retaining foreign currency in expectation of receiving the VAT repayments, she said.
The slide in the kwacha seems “overdone” as relatively high yields on government securities may attract foreign buyers, Khan said.
Yields on Zambian 91-day Treasury bills rose 50 basis points, or 0.5 percentage point, to 9.5 percent at an auction on May 15. Rates on the nation’s Eurobonds due April 2024 dropped 9 basis points to 7.63 percent.
To contact the reporter on this story: Matthew Hill in Lusaka at [email protected]
Thats what happens when you cant get together and you let the white supremacists run the world economy. Africa close all borders to the world and transact internally. I can assure you, we will do much better. But problem is, when people like mugabe stand, they squeeze their economy and the citizens decide to go against their leader. that is how they run our countries remotely, neo-colonialism. Consolidate partnerships just within southern africa for a start and we wont care what the rate is with the dollar because we wont need it. did you know, that africa is the only continent in the world that is self sufficient. we would not need to import anything and yet have all the minerals, resources, food, needed in our so called modern society. Stop white suremacy!!!!!
@ Zagaze, with due respect sir, I don’t agree with you. Africa doesn’t manufacture all that we need as Africans, we mostly depend on European and Asian technologies. Besides that, we do not have industries and technology in Africa which can further process our extracted metals into finished goods, hence the need to export them.. We still need their expertise skills, machinery and technology in order to start producing our own everything. Sorry sir, your idea is a brilliant one but we haven’t yet attained economic independence as Africans, we still have a very long way to go.
@hope 4 better, if i were to follow your logic, then the question would be, how then did the europeans develop those industries? did they get them from africans? Or perhaps the aliens came with flying saucers and showed them all this technological advances they have now or is it because they actually had to start from zero and build upwards, with mistakes here and there which they later perfected to get to wherever it is we consider they are. As africans, we have so far the skilled manpower, brain power to innovate and build these things for ourselves. The idea of always waiting for others to develop our technology then we stand for ourselves is what makes us subservient to them. Let us not aspire to live in luxury right away, but instead work hard for our future from what we have now!!
It is a wise saying but the problem is that you have not full equipment which can run your role material into finished products. Sata is talking about bringing Land Rover assembling plant but we do not manufacture or have machinery which will make all the needed spare parts for the same vehicles. Look at South Africa which can boast of manufacture their own vehicles, there is no Japanese used car because they make them and the tax is little compared to Zambia which shoots its own citizen with high ZRA tax on used importated cars, This is shameful.
It is a wise saying but the problem is that you have not full equipment which can run your role material into finished products. Sata is talking about bringing Land Rover assembling plant but we do not manufacture or have machinery which will make all the needed spare parts for the same vehicles. Look at South Africa which can boast of manufacture their own vehicles, there is no Japanese used car because they make them and the tax is little compared to Zambia which shoots its own citizen with high ZRA tax on used imported cars, This is shameful.
@idah, i under what you saying. yes we dont have all the technology to process the minerals, resourcs into finished products, but why cant we start with just one industry say wheat, maize processing plants. why do we want to have the potential to process all the minerals we have at once. A baby first crawls, get enough energy and strength-it stands, months later it walks. We start with food processing plants, invest there, then from the profits of surplus food production we can sell to congo,zimbabwe, SA, the money can then be chanelled to a new project of say copper processing, when thats done we go to the next. We need 5-10 year plans to tackle different phases. England devloped like that, so why cant we?
The kwacha is now directly proportional to Sata’s health. What can we say! Simply shocking.
evacuate the kwacha also!
Africa is only selfsuffient in raw materials and dull leaders like Sata.
Zagaze. Does this then mean that when Mwanawasa was president Africa or Zambia in particular had suddenly become self sufficient, or are you deliberately ignoring the effects of politics on the economy? Or if I might add why are some countries with better systems of governance like Botswana performing better than countries like ours which are driven by unknown, undefined, and highly misconstrued political philosophies of ‘Donchi Kubeba”
Ba @zagaze don’t generalize Africa to just shield the Sata’s shotcomings that Zambia is facing. I was in Kigali Rwanda a fortnight ago and to tell you the truth comparing Kagali and Lusaka, one might think it is Zambia and not Rwanda which was in war a few years ago. And Rwanda doesn’t even have the resources that Zambia has. So baba your PF leaders are just messed up resulting in these poor economic indicator and it has nothing to do with the white man
@zagaze, I would like to be your neighbor? Let me know when you plan on a plot in a new place – I will pitch mine there – such refreshing discourse you have!
Zambia in the sun!Pf kwena mwasebana.
The kwacha is now directly proportional to Sata’s health. What can we say! Simply shocking.
well, then evacuate the kwacha also
@The Crusader, actually the state of a country’s leadership has a bearing on the state of its currency especially on the speculative side of things. Markets hate uncertainty… I am sure they are sucking out their cash.
Yes. Muta sibona sa boni simikata. The Barotseland 64 will on in the Hague this week.
We are in serious trouble as a nation. I expect energy prices to go up any time soon. By 2016, the rate will be K50.00 to USD1.00. Mark my words.
Just shows you that the whole capitalist world is on the side of Vedanta and Assgarwal
What rate did the ‘corrupt’ RB leave the kwacha at? Lekeni Sata (Katongo, Mwango, Charles, Kays) ateke!
Are you being serious or sarcastic?
He is being sarcastic
Well then that’s a relief. You can’t tell nowadays.
@Zagaze, you seem to have just woken up from a beer induced stupor. You think Africans don’t know that the continent is self sufficient? For starters, we cant agree on anything as a continent. Even the AU is a flop. Do you know what to do with copper, emeralds, Iron ore, if you were to sell these within yourselves, do you have the skills to turn this into wealth? Have you invested in technology? So many people with doctorate degrees but cant apply themselves in fields where it matters. Is it not a shame that well into the 21st century, the shots are still being called by foreigners? The answer is, go out there and outsmart them at their own game in Europe, America, Asia etc. Closing Africa, you will all just machete yourselves to death.
You see that right there is the problem.Who taught you to think that the africans are not smart technologically,that they would just machete themselves all to death if left alone.History should tell you that we lived and prospered before the invaders came.The history you taught in school tells you that we were nothing but pagans, heathens until the white man came. that we lived in trees and the sad thing is that you still believe that nonsense.Ok, i will tell you this, lets say we have copper. We need ways to process it for plumbing purposes.a trained engineer, knows what the melting point of copper is, its malleability, he knows how to build a furnace to melt the copper, how to purify it, how to shape etc.why cant three countries in sadc put money for such a plant to supply them all?
the reasons africans never agree is because it is in someones interest that they never agree. You always want to involve white people in all your strategic meetings not knowing that the same white people report to those who dont want you to unite. The reason we dont agree is because we let the white man put lines and divide us and we willingly accept. we dont agree because we let the white man tell us who we are and that we are different; that you are Hutu and you are Tutsi, that tutsi is better than Hutu and vice versa. We dont agree because some of us have become “so europeanised” that we can only think in the frame work of the western type of education and so no matter how far we run, we always have to go back to it, because we make it the foundation of who we are. we fail to agree…
we fail to agree because an idea like zagazes is so ubsurd to you that you dismiss it as the mumblings of a drunken man,yet the developments of the western world you so much admire started from such unbelievable dreams,that man could walk on the moon.was it necessary no, but why do it.Because for a nation to develop, it has to dream, without dreams there is no innovation.Do you know the number of service and technologies have come out just the dream to be in space?You use GPS now,its a direct result from the dream of going to space for example.When you dream and try to achieve your dream, you develop other dreams, technologies, ways of thinking just to achieve your dream.I like the way Neils Degrasse tyson put it before the senate commitee on nasa, in support of increased nasa budget
problem we have in africa is we take one step forward and then take two steps backwards. Look at where we were forty years ago. What didn’t we manufacture in this country that we needed to be self sufficient? Cars, spares, preserved foods, textile, you name it! We even had an organised public bus transport that circulated through the townships at specific times, metered cabs(zamcab) etc. we always think foreign is better, not just Zambians but all Africans hence no innovation. All the people with money have their kids in foreign school, take their kids to foreign hospitals etc. keep their money in foreign countries….the list goes on. Bottom line is a mentality thing. We will first need to start being proud of being inventors than consumers before we can make self sufficiency reality
Yeah !!!!You were warned against Sata but never listened.
Zambia is slowly going at a supersonic rate the Zimbambwe way. This is what happens when the country is on auto pilot. God please help us. Amen
Of course this benefits the mines so they are certainly behind the fall.
Change the currency to US $
This report is taking about kwacha zagaze being the worst performer, not all that analogy you giving,this has everything to do with people in power not knowing what they are doing , they need to pay attention to the kwacha than structures, we are going the wrong way hope they have enough senses to realize it should be all about the economy
There is nothing our government should boast of as at now. You can not count development on borrowed money when your Kwacha is devaluation rapidly. I was this afternoon at Solwezi Post Office wanting to change kwacha and discovered that it is K7:18 selling and guying was at K7:09. Where are we heading with this situation. You can not trade properly like this and Mr. Chikwanda must resign because he can not keep on cheating us when the economy is poor and the standard of living is now uncontrollable.
Bufi bwachilamo. Do not cheat people but tell the truth why Kwacha is buying a 25Kg bag of ubwali at K85 when we have bumper harvest in the country. Chakupapa
There is nothing our government should boast of as at now. You can not count development on borrowed money when your Kwacha is devaluating rapidly. I was this afternoon at Solwezi Post Office wanting to change kwacha and discovered that it is K7:18 selling and buying was at K7:09. Where are we heading to with this situation. You can not trade properly like this and Mr. Chikwanda must resign because he can not keep on cheating us when the economy is poor and the standard of living is now uncontrollable.
Bufi bwachilamo. Do not cheat people but tell the truth why Kwacha is buying a 25Kg bag of ubwali at K85 when we have bumper harvest in the country. Chakupapa
Man of Action is indeed in Action!
Experienced Man!
For you information, he started from the lowest and rose through the ranks; i.e Ward, Councillor, Governor, MP, Minister, Minister without Portfolio and now President. Experience is indeed at work!
Pabwatooooooo!!
Are you being serious or sarcastic?
Of course it’s useless experience!!!
Correction!! Sata started by working for the white colonialists as a Kanyangu against his own black people, who were busy fighting for political freedom !!!
Son of David have mercy on zambia.
Let your favor and grace speak for us,
in Jesus might name. Amen!
Muli achimbwi mu govt but you know what we can boast of unprecedented development. We have been dribbled and the majority are still stupid enough to push the PF agenda.
And no one in government is saying anything small business are suffering where is chikwanda and the group the biggest obstacles is they have failed to do a damage control to their failed policy only God will help us
thats VERY GOOD NEWS TO US IN THE DIASPORA, I have to make a trip to ZED and change my dollars now , OMG iwill be a millionaire
So what? You are very st.upid, how does your statement remotely help the many Zambians?
@stu.pi.do
You can’t get the irony? Lol.
Chosen One, Anyoko is staunch PF so issues of Irony could be questionable here.
Unprecedented development
That is what happens when you let the uneducated to run the country.
Soon fuel prices will go up again.
CNP. Chimba warned us and we never listened. We are now paying the price for voting PF in power. RB was far much better than MCS.
Link 8000 and other capital projects that are done at the same time are adding more pressure on our poor kwacha, PF wants to set a record on things that were done in by MMD ninety years in three years, effects have started showing soon the dollar will be 10kwacha. Where is the finance minister?
@ANYOKO you should be ashamed of yourself, instead of symphathising with the country you are busy making fun of it. You should be patriotic even in diaspora.
Too much politicking pa Zambia,political jealous -Gbm,abuse of resources -induced by elections,boastful -pf govt can’t ask for advice from former mmd ministers,broken system -still using the colonial system in running our govt,lack of professional appointments-nepotism.change the mentality first before we can start thinking of put up manufacturing industries.
lets use USDollars as the currency.
we have failed to run our country,airline,hospitals,universities,schools etc etc .the list is endless,,……………………
IT WILL GET WORSE BEFORE IT GETS BETTER !!!
As a country we should be ready to take risks. There are alot of external factors contributing to the fall of the kwacha ngwee 🙂 . Copper price is just one of them.
We can’t afford to isolate ourselves as a country or Africa as a whole, We need other countries too. Some of these developed countries they are where they are now because of our beloved ancient continent Africa. What we need to to is to use them to our advantage,but first we have to work TOGETHER !
try telling that to PF. Do you know them? Ifya kubaza ama together mulelanda will only work if all of us join PF because the PF mentality is never ever accept any form of advice from anyone none PF. You dig?
Shocking but not surprising! Our clowning president is an ardent supporter and disciple of Robert Mugabe. To make matters worse, unlike Mugabe, Sata’s cabinet is full of riff raffs and muppets whose only skill is to hero worship Sata.
Satas health is directly promotional to the Kwacha
Falling kwacha is one disadvantage of democracy -you elected the popular guy rather than the one fit for office.Sata knows zero about economics and he wanted the office for the prestige and not the knowledge he brings which is zero.
My dad told me in 2011 immediately Sata formed his cabinet that Zambia is finished! He Sata and his people can’t run a government…….they are undisciplined, parochial , partial and lacking both reason and intellect. And indeed it has come to pass.
Very good lesson to PF supporters, no jobs for you in 90 days, high mealie meal prices for you, no money in your pockets, worst performing currency on the globe etc…. next time vote with your brains.
Date Time Buying Rate Selling Rate
28 May 2014 09:30 7.1000 7.1200
27 May 2014 15:30 6.8556 6.8756
27 May 2014 12:30 6.9592 6.9792
27 May 2014 09:30 6.9017 6.9217
23 May 2014 15:30 6.7772 6.7972
23 May 2014 12:30 6.7667 6.7867
23 May 2014 09:30 6.7456 6.7656
22 May 2014 15:30 6.7294 6.7494
22 May 2014 12:30 6.7217 6.7417
22 May 2014 09:30 6.6925 6.7125
I guess Zambia is officially one of the “failed states in the world” !! Where people have little or no chance of access to: three good meals per day, proper working medical facilities & services, housing, social facilities, clean drinking tap water, human rights, good education systems, etc, etc. What a mess!! I wish we could rewind time….Zambians are very friendly people and do not deserve all this suffering, just because of their bad decisions….God serve Zambia !!!
May someone from the Govt say something.CHIKWANDA must resign.there is no way the kwacha can be depreciating like this