Secretary to the Treasury Fredson Yamba has dispelled reports that Government is working on measures aimed at introducing currency and capital controls.
Opposition UPND Hakainde Hichilema recently revealed in an interview that the PF administration is drafting a new statutory instrument that will restrict the flow of foreign exchange by combining the revoked SI 33 and SI 55 of 2012.
But Mr Yamba said these reports are misleading and mere fabrications.
‘It’s all false. In this respect, the Ministry of Finance would like to assure the general public, private sector and all other stakeholders that, the Government remains unequivocally committed to principles of a free-market economy driven by the private sector with Government playing a role of facilitator and regulator,’ Mr Yamba said.
He said this is in line with progressive and modern day economic management world-wide.
Mr Yamba said Government has no intentions of re-introducing capital controls, or any other form, such as price controls adding that Government will stand by this assurance.
‘The Government is however, considering the re-introduction of currency regulations whose principal objective is to reinforce the Kwacha as legal tender in the nation,’ he said.
He added, ‘The other objective is to ensure effectiveness in the conduct of monetary policy whose principle purpose is price stability, a necessary condition for any economy to thrive.’
‘The general public, business community and all stakeholders may remember that SI 33 (Currency Regulations) and SI 55 (Balance of Payments Monitoring) of 2012 were revoked to allow for wider consultations across sections of the Zambian society,’ he said.
Mr Yamba said after the revocation, the Government embarked on consultations with key interest groups, more importantly representatives of private sector entities and associations.
‘I wish to inform the public that a lot of progress has been made with respect to consultations on currency regulations which His Excellency, President Edgar Chagwa Lungu made reference to in his press conference held on 26 November 2015.’
He added, ‘The consultations have been very open and focused on getting the views and suggestions from a cross section of stakeholders on what would be the ideal regulations required to enforce the Kwacha as legal tender without any disruption to business activities.’
He said, ‘The public may also wish to know that consultations on this matter were extended to selected countries in the region and beyond.’
‘At the back of these consultations, Government fully recognises its responsibility of ensuring macroeconomic stability, and is strongly resolved in quickening the pace of fiscal consolidation and implementation of attendant measures as recently outlined by the President.’
All these countries we see with good economies have some of tracking the movement of hard (forex). Like BOZ Governor had said,the fiscal and monetary systems are not integrated thus it is hard to manage well these aspects and we only see the effects this chaotic state of affairs creates when the currency looses its value drastically! Why should we in this era have manual receipts in bureaux d’echanges with no linkages to central monitoring system to track compliance with monetary regulations? Why shouldn’t exporters account for their forex earnings in the country of production,Zambia where they are using means of production to earn that money so that corporate tax can be well calculated? Why is the import/export system not linked to banking system so that forex declared to bring in…
..continued…Why is the import/export system not linked to banking system so that forex declared to bring in equipment,consumer goods etc is not merely exported as part of capital flight and flouting of monetary regulations? How are we going to monitor illicit financial flows which are responsible for depriving governments of revenues and financing international crimes? We need some electronic monitoring system in place and not just SIs and every thing based on paper!!
Lets hope that economy will change for better than worse otherwise Zambia will end up using 3 currencies like Zim, just imagine US dollar, SA rand, Chinese yuan….
fredson yamba you are the man and good that you are not a politician
Currency control was in Kaundas days and I personally lost plenty money while it was sitting in the socalled “pipeline”I wonder if I should sue Zambia for my loss??????????????
@Zambia is ours,excellent and knowledgeable comments! I am impressed! Mines export copper and the gross forex proceeds do not come back to Zambia but only funds to pay for local costs like salaries,taxes etc ! It is a major loope hole and it should be plugged!
These same crooks and thieves are the same ones who were threatening to reintroduce elements of SI33 and 55 last month when the Kwacha was rapidly depreciating. Now they deny it? That’s the problem of having a bunch of liars running govt. Truth is relative to them and will say anything to gain political mileage. After all they learnt from the biggest liar Zambia has ever had, Sata.
So this Yamba thinks forcing Zambians to use Kwacha instead of any currency of their choice is not currency controls? Think again my friend.
Zambia could be a regional banking hub like Singapore and this could generate THOUSANDS of very well paid jobs in the financial sector. But it is never going to happen if we do not have the FREEDOM to trade any currency, anytime, anywhere.
All these dumb “regulations required to enforce the Kwacha as legal tender” will do IS EXPORT JOBS to countries with sensible economic policy – like Singapore and Switzerland!
Here in South Africa the story we are reading in the Mail and Guardian is:
Zambia is considering reintroducing regulations to make the kwacha the country’s only legal tender, treasury official Fredson Yamba said on Wednesday.
The government of Africa’s second-largest copper producer has often blamed the weakening of its currency on the tendency of businesses to price their products in dollars, and it banned the practice in 2012, only to lift the restrictions again in March 2014.
This year the kwacha has shed more than 40 percent in value against the dollar due mainly to a sharp fall in global copper prices, severe electricity shortages and government mining regulations that spooked investors.
“The government is considering the re-introduction of currency regulations whose principle…
“The government is considering the re-introduction of currency regulations whose principle objective is to reinforce the kwacha as legal tender in the nation,” Yamba said in a statement.
The other objective of such a move would be to ensure effectiveness in the conduct of monetary policy, which is aimed at ensuring price stability, he said.