Former Bank of Zambia Governor Caleb Fundanga says it will be catastrophic for Zambia to adopt the use of the US dollar as a local currency in response to the sharp fall in the Kwacha.
Some Zambians especially on social media have been proposing the adoption of the US dollar as official currency in Zambia following the recent fall in the value of the Kwacha.
Dr Fundanga said the key is to implement measures that will improve macroeconomic environment to help stabilise the Kwacha.
He said adopting the use of a foreign currency will send panic and signal that the Zambian economy as it rock bottom.
Dr Fundanga who is now based in Zimbabwe where he is working as Executive Director of the Macroeconomic and Financial Management Institute of Eastern and Southern Africa said adopting the use of the US dollar will not help stabilise the Zambian economy.
He was speaking on Wednesday when he featured on a panel at the just ended 2015 Zambia Business and Finance Conferences organised by Euromoney Conference and the Ministry of Finance.
“For me, I now work in a country that adopted the US dollar as a local currency but whether that has helped is another issue. What I can encourage is for the government to improve the macroeconomic framework, I always talk about inflation, lower inflation, you lower interest rate and cut government borrowing and the rest will be done by the private sector,” Dr Fundanga said.