Former Bank of Zambia Governor Caleb Fundanga
Former Bank of Zambia Governor Caleb Fundanga

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.

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65 COMMENTS

  1. “…He said adopting the use of a foreign currency will send panic and signal that the Zambian economy as it rock bottom…”
    Really? Are you sure that we have not pass that point already?
    What a bunch of educated pillocks

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    • Who wants to use US dollar mu Zambia kansi? If you want to use US dollar and drink tequela go into excile to USA like my friend @Nostradamus

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    • Sheer incompetence: Kwacha gravitating on a free fall, no people driven constitution and Where’s the university you promised us here in Solwezi?

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    • People advocating for USD have no cooking clue what MONEY IS! Figure that out and you will know why not to use USD

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    • In the absence of clear statements from GRZ on what’s going on, markets will rely on speculative statements from think tanks like Dr Fundanga with the resultant danger of making things worse.
      Please Jameson come out of your hangover & tell us what’s happening.

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    • @Ndobo, you are somehow right, am in exile because Zambians voted for RB, and repeat to vote another wrong one Edgar…now look what those 2 have done to the kwacha.
      what Caleb is suggesting is what HH talks about every single week.

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    • Instead of blubbering in ignorance, plug this is heading in your YOUTUBE search tab and learn how you are being deceived.

      “A Powerful Documentary: G Edward Griffin ? The Capitalist Conspiracy”

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    • I am sure people now understand what I meant yesterday that PF are advising Edgar to declare K1=$1

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  2. So this is what ka Lungu was discussing with that Zimbabwean nyamazai Mugabe back when he went to pay him a visit. How to adopt the US dollar! but ka Lungu, he’s such a lazy chap ka.

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  3. Is it that bad? We have assurances each time a PF cadre or government official comments on the economy that all was not too bad. Now I get the picture that the assurances are all but politics of embarrassed governors. Let us face the truth for a change and listen to advice other than calling those advising “bitter”.

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  4. The Zambian economy is worse than we think and things will get worse. You can’t liberalize an economy in anindiscriminate, a way that any player can walk in and do what they want then leave with whatever money they want. Even the UK or American economies have restrictions on the amount of money you can take out. Zambian economy is not the biggest in the world. We borrow money as if there is no tomorrow and for consumption or corruption. Everything is being done wrongly either in the name of liberalism or lack of vision. Chagwa you will probably need to have a think about dealing with the basis of the problem than looking to change the medium of exchange hoping the problems can go away. It’s not gonna happen.

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  5. These PF cadres are now agreeing that things are not fine! All along chaps like Kambwili and Chama have been there shouting on top of their voices that things are fine and everybody is enjoying the unprecedented development! What a group of jokers! They have development in their pockets after helping themselves to tax payers money and they think everyone is happy! Pathetic idi0ts indeed! If using the US$ will stabilize the buying power let’s go for it. Its better than having to change prices of commodities on a daily basis.

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  6. Rubbish suggestions that will just cause more problems. Don’t turn Zambia into another Zimbabwe. It’s bad enough to be like Greece. The kwacha is just adjusting to its real value after being propped up with previous Eurobond dollars. Using US dollars is not the answer. It will just wipe out the little productive capacity left in the local economy. The local productive sector cannot cope with its input costs to be all denominated in USD. Other than Copper whose proceeds are repatriated what else do we export anyway!

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  7. Fulish Zambians voted out RB and put in Sata and are now complaining about the economy! RB was bringing prosperity and yet you dragged him to court on tramped up charges. Some even wanted the poor man to be jailed despite the lack of evidence! Now they want to adopt the dollar! You only have yourselves to blame for listening to Membe’s propaganda.

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  8. I guess now we know what happens with neoliberal finance ministers – they get a cozy gig being supported by the IMF/WB/BIS institutions.

    ” 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 ”

    ******
    Memfi’s financial, technical and networking partners:

    Financial: Norway, Sweden, The African Capacity Building Foundation (ACBF)
    Technical: World Bank/World Bank Institute, IMF/IMFI, COMSEC, BIS, UNCTAD
    Networking Partners: African Economic Research Consortium (AERC), Centre for International Development (CID) at Harvard University, Crown Agents, Debt Relief International (DRI),United Nations Institute…

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    • You mean he can be a hypocrite anywhere in the world. And by the way, working with the World Bank and BIS in Switzerland, who got us in this mess to begin with.

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    • There is an economic problem. Why blame anyone other than the economists, the finance minister and president, and of course including the world fountain of bad policies and corruption, the IMF/World Bank/BIS itself?

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  9. But If Things A So Bad Surely Some Pipo Like Chikwanda Shud Stepdown And On Borrowd Mane The Lenders Must Moniter The Use Of That Mane Not Buying Vehicles 4 Dcs

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  10. Funny how we have all these experienced Zambian Economists whose talents have not gone unnoticed by International Organisations around the world yet we still retain the selfsame senile 82 year old man in the name of Fossil Chikwanda from 2011, who is an appointed official, the president can simply headhunt any of these men to take charge.

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    • Amen brother! Clever and ACCOMPLISHED people are a threat to our INSECURE leaders. They have lived and thrived in a KAPONYA economy and WILL NEVER KNOW WHAT THEY DON’T KNOW! ! Sad thing, the people are in the same boat, they reap the harvest of thorns.

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    • The president doesn’t know about headhunting for talent. He only knows about campaigning for by elections.

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    • There is no-one that has a better CV than Chikwanda! His experience is unmatched and unrivalled!

      Can any other Economist write-

      I was employed as a Minister of Finance and was in charge of bankrupting the Nation of Zambia, and made many poor politicians very, very rich men.

      I was so successful at this, I was recalled from retirement, or perhaps the grave, to repeat this fantastic achievement.

      Now there is a CV for your headhunters!

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  11. There will never be another brilliant combination like this one we had: Presido Levy, Finance Minister Magande, Boz Governor Fundanga.

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  12. Zambia is already worse than Zimbabwe because PF has failed. I use American dollars and it is not a bad idea to use American dollars since our economy has failed under PF. A lot of institutions like Macroeconomic and Financial Management Institute of Eastern and Southern Africa are in Zim than in Zed because they know that Zim economy is better than Zed economy. Look at the state of our roads especially in NWP & WP.

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    • Please DO NOT mention the bad state of the roads

      Lungu and Chikwanda will immediately go and borrow another Billion Dollar EUROBOND that we have no hope in Hell of repaying.

      Sata taught them very well. This is how they put money in their OWN POCKETS!

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  13. Yes lets adopt dollar. if politicians want to continue using kwacha thats in freefall they can run their parallel system – govt workers brace yourselves. As for me Im going to trade in Dollars only.

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  14. Things are really going worse each day that goes by now in Zambia!2016 general elections seem to be too long a period to wait for!I’m seeing civil strife/unrest country wide if Alungu fails to address the nation soon,pressure of despondency & despair is building up more than a volcanic eruptions of kalakatoa! We may end up having a coup d’eta? Prices of basic essentials are sky rocketing on a daily basis compounded by loadshedding;while Alungu is busy announcing his next trip to Kenya!Surely,Zambians must demand for a leader now who will deal with these so called selfinflictory social economic mayhems to which I subscribe to!If life is so challenging to me,a second class worker in Zambia,then what more of a third class or those who are unemployed-Surely,we need a responsible & proactive…

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  15. ….our economy can be likened to a tree whose bark looks rotten but with some patches which looks healthy meanwhile the entire core is rotten……we are being hopeful because of the few healthy patches of the bark….(tuma construction of infrastructures dotted around the country)…
    ….if someone can dig into LT archives, I made mention that the untimely rebasing of our currency .. shall CONTRIBUTE into its own down fall….we may see the kwacha double the current rate….the highest denomination before rebasing was 50pin- K50,000….over night when we rebased… we printed a note equivalent to K100 000 as the highest denomination…the world of economics does not sustain such sudden change in formula…..

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  16. Considering what the former BOZ governor explained against adopting the US dollar as a national currency, it is clear the govt has been doing a lot of wrong things that have led to the kwacha plummeting such low. Recently ABC wanted approve for more borrowing which is in itself one of the reasons of the economic problems contributing to the currency losing value so quickly. Govt must with immediate effect stop this madness of borrowing. In short, we have an incompetent govt that has no clue what they are doing but busy yapping everyday!

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  17. The value of a currency is a reflection of underlying economic fundamentals as well as investor perception. Successive Zambian governments have prioritized political expediency and consumption over production, an aspect that has left the country a net importer of everything and exporter of nothing but raw copper. I always see tourism adverts on international TV channels from almost all countries in the region except Zambia. Why?. Please understand that Dollars are earned from a diversity of hard and soft exports. There is no other way. If there was seriousness on facilitating Zambian exports, there would have been a rail line to Lubumbashi by now, to tap into the 60 million people market in the DRC. The primary responsibility of Zambian diplomatic missions abroad needs to be re-oriented…

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  18. All we said but who is going to take the necessary action? In it’s current form, the government has run out of ideas. Even the idea of getting retired bank executives like Marg to run a ministry was wrong. They all encourage their friends in cabinet to borrow more and not how to produce the money that we can also lend to Malawi and Zimbabwe. We need to have the black Africa Bond to all borrow from not this expensive euro bond that raises the appetite of old man Chikwanda!

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  19. Comment:
    any person lacking wisdom causes comfusion,kaleb is right and very educated,remember on any note of a currence has a banding name or a key holder country. name,this means that if we are agree use of dollar here in zambia,we will indirectly ruled by u.s.a.

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  20. What is going on in Zambia is reflective of our society at large: we are so resistant to intricacy that we do not stop to think our way out of problems. Copying and pasting Zimbabwe’s model when they are busy struggling to find a way out will be our own undoing. Let’s apply our minds to the situation at hand, drop populism (which often results in mediocrity) and do the right thing. There will be pain – but there will be gain. Stop this habit of looking only for what sensually and religiously pleases. It is dangerous! Let’s stop being pathetic – that way we will even begin to choose the right leaders.

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  21. That’s rubbish you can’t adopt foreign currency this shows failure let us work hard to make our currency strong

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  22. Okay imwe ba UPND who are loud mouthed, tell us what you did here in Zambia when the Kwacha gained heavily against the Dollar in 2006? I was doing my studies back then in the US and I came back, there was absolutely nothing to show that the Kwacha was doing good.

    Infact, its not always true that when your local currency loses value then its a problem NO. In fact its the opposite as it motivates real entrepreneurs to start exporting more and get a lot of Kwacha to use locally. Forget the rhetoric of inflation. So imwe ba UPND, BE REAL.

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    • Is it UPND folks only that are feeling the pinch? What did you learn in the States? Smoking crack coke it looks like. UPND were not in Government. In a state of affairs Zambia is in at the moment would a sane man borrow money to employ extra police, Army and ZAF so he can pay them with borrowed money instead of investing the Euro bond in adding value to the maize and the copper that no one wants in its ore state. be real Mr Rasta reduce on the joints you are fuffing.

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  23. LETS GO DOLLAR ZAMBIA.
    Am appealing to the Government of Zambia to change our currency to dollar. It is very sad at the rate our Kwacha is losing value against all major currencies and it is about time we started trading in the USD dollar just as our brothers in Zimbabwe have done.
    If the depreciation of the kwacha continues, by December 2015 USD$1 will be equal to K20 which will be very bad for our economy and the People of Zambia.
    Why should we abandon Zambian Kwacha and go for the USD$:- 90 % of majors businesses in Zambia are foreign owned and everyday they collect millions of Kwacha and convert it into USD$ hence putting too much pressure on our poor Zambian kwacha. If you analyze trading in Zambia, Shoprite alone collects K100 million every and convert that money into…

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  24. So after adoption of a dollar, how much will lolly pop sweet cost?, a box of match sticks cost??? Wont that just bring about price increments? Look at this math, a lolly pop costs about 50 Ngwee which is equal to 0.5 Kwacha = $0.05 = 5 Cents. Talk time is billed around 2 Ngwee =0.2 Cents which is never there. The telecom companies are likely to start charging for 1 cent per second which translates to 10 ngwee per second instead of the current 2 ngwee. This increment is equivalent to 500%!!!. In short you will need 6 Kwacha to talk for a minute!!! What a world…

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  25. @Born Free, IT IS BEING BANANAS TO DESCRIBE DR. FUNDANGA AN EDUCATED PILLOCK. THERE SHOULD CERTAINLY BE SOMETHING TERRIBLY WRONG OR MISSING WITH YOUR BRAINS IF YOU HAVE ANY. WHEN DR. FUNDANGA AND MAGANDE SPEAK OUT THOSE IN LEADERSHIP SHOULD PAY ATTENTION.

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  26. Rotten nation full of pathetic voters indeed! You need to do more time in the Economic Wilderness to learn Prudence and Judgement when it comes to choosing leaders! You asked for it! Live with it!

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  27. There are some dumb Zambians in this world. Adopt another nations currency. Look at that nations history then think again. Rather you live as paupers than live as another nations B1t?h. Let Obama leave office so his blinding persona leaves inferiority complexed people free. I have read and heard it all now. Zambia might have some people worse than its leadership.

    Viva president Nawakwi.

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  28. They can adopt whatever currency they want but as long as the economy is not doing fine meaning as long as we have visionless leaders who preside over a failed economy in which there is no production for export, things wont be better.

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  29. As at 15:00hrs local Zambian time today,the kwacha is trading between k10.08 & k10.28 for a Dollar!Surely, PF must resign under national interest! Alungu will leave Zambian economy worser than any African Drunkard President in the annals of political history of Africa!In the interest of time,Alungu must reflect seriously on his government & the social economic implications it has on the majority poor citizenry.We are on fire now,Alungu may not freely continue presiding over zambia till next elections,he may be ousted by civil strife or civil unrest! He needs to seriously strategises to reach that far no wonder he’s always globe- trotting in a quest to maximise his earns in terms of allowances before he vacates that office!I wonder which strategy will he use to white wash his rivalry with…

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  30. A practical example, you send a quotation to a government institution where strictly it has to be in Kwacha. You use the worst case possible rate on that particular day..say actual is K9.5 so you use K10 to $1 and give 10 working days validity. 30 minutes after sending the quotation the rate hits K10.5 and you know by the 10th day, you will be lucky if it is below K12. Buggers do not want Dollar quotations,they take long to approve orders and even longer to effect payment and you’re lucky if you are paid within 6 months!! How can you conduct business in this environment????

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  31. People should not re-elect the PF under any circumstances, they have proven the fact that they lack ideas, brains, leadership, governance. To use someone’s quote, stupidity is an infantile disease. It is the cholera of the PF and its so called leadership. Getting rid of the PF is no longer a necessity, its now an emergency.

    We need someone who is intelligent enough to know that he needs to surround himself with people far much smarter than he is, and not be the smartest guy in the room.

    Politicians and diapers should be changed frequently and all for the same reason. ~José Maria de Eça de Queiroz (in this case the soiled diaper and the PF are the seemingly the same thing!)

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  32. There is always a way out of any problem, now we Zambians are not going to figure that way out unless we become united, Zambia can be the worst economized country and it can also be the best but this can only happen when we exercise the one Zambia one nation rule. lets work together to keep our Zambia in shape after that we can now condemn each other. right now the solution is for all of us to put our heads together and help the nation in every way we can. if we managed to get our independence together then this is a very little problem for us. together we shall overcome.

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  33. Certain Zambians … good at certain things: Complaining every time and finding a reason to show they are better than others. They think being negative all the time helps. No-wonder they are always attracting negatives in whatever surrounds them. Now I know: the easiest way to lose your seeming high esteem is to fall at the center of their discussions. They specialize in the blame game. They are always sending negative vibes in the atmosphere. Grow up you good for nothing lazy chaps! Do something about your problems … Fundanga expresses his opinion and you start shooting your tuma bullets all over!!! Let those who know the science behind such topics use their intellectual capacity to argue out the case at hand professionally so we can learn to reason with them. Not this stupid blame…

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  34. The acceptance of US Dollar currency to be used as Zambian local currency will be the total failure to us Zambians…….. Let us wake up, open the eyes, invite God, ask for wisdom and we shall win…….. Leaders of ZAMBIA, SADC, AFRICA AND CHURCHES AT LARGE- BE UNITED AS ONE, WE ARE THERE TO SUPPORT YOU……

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  35. Comment:
    Adopting the US dollar in Zambia will be a worse and a great cause of suffering to a country like Zambia. Our leaders we love and respect you people, when making decisions like this one u people should thnk twice so as to act wise. Can we surely compare Zambia’s development to america’s for us to adopt the dollars? NEVER!.

    ABOVE ALL LET’S REMEMBER THAT WE ARE IN THE LAST DAYS,THE END OF TIME IS NEAR. The Bible say’s that there wil be economic crisis in most of the countries and rulers will fail to control it, as a result people wil say that, since presidnts are doing nothng to control the scourge lets jst choose one ruler and one currency worldwide and thats marks the mark of the beast. PEOPLE ITS HIGH TIME WE TOOK OUR BIBLES SERIOUSLY FOR OUR INNER EYES TO BE OPENED…

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