BANK of Zambia (BoZ) says Britain’s exit from the European Union (EU) will not have an immediate impact on the local financial markets because the country’s major trading partners are South Africa and China.
Speaking in a joint interview at the just ended 52nd Zambia International Trade Fair in Ndola, financial markets director Emmanuel Pamu and director economics Francis Chipimo said while the Brexit situation creates uncertainty in the Euro zone and the global economy, Zambia will not be affected in the short term as that country is not its major trading partner.
“The uncertainty will impact all other economies. But for us, we have our own domestic country-specific factors, which are impacting on the exchange rate. These are the ones which are more dominant at the moment than external factors.
“Obviously, it has an impact, but what is more dominant are the domestic factors, which are pulling the exchange rate in the appreciating direction,” Dr Pamu said.
Dr Pamu said when news that Britain had exited the EU was announced, currencies of some economies in Africa depreciated, citing the South African rand as one of the currencies that had depreciated, but the Kwacha appreciated and is still trading on an upward trend.
However, Dr Chipimo said it is too early to determine the implications of the Brexit, saying that it will be dependent on how the negotiations will go with the UK.
“This will also depend on what that would mean in areas of trade and investment for both the EU and Zambia, but right now our major trading partner is not UK, but South Africa and China,” he said.
He said there has been some volatility in the financial market globally because people are worried on the implications of the Brexit.
For the first time Zambians are looking for countries to migrate to. I have been recieving phone calls from Zambians asking me to help them seek asylum in any developed country…
Instead of worrying their big brains about Brexit, BOZ should talk Zambians about the progress they have made about creating the sinking fund that Dinosaur Chikwanda promised last year for repaying the Eurobonds when they nature in 2024. Use those PhD brains to come up with solutions to the toxic economic situation that PF has left Zambia in. We do not want Zambia to be declared bankrupt like Venezuela or Zimbabwe.
Boz should not be worrying about Brexit and its impact on Zambia. What is urgent for BOZ is to advise President Lungu that while he may rig elections he cannot rig the economy. The assumption that President Lungu Is making is wrong and dangerous. His idea that he can on 12th August cook election results and quickly declare himself the winner and new President will backfire badly. Tell Lungu that this economy is broken and will need fixing after the Polls. Zambia will need IMF money to fix the economy and that money will not come to Zambia with an illegitimate Lungu in power. Without external financing the Zambian economy will implode. Across the river Uncle Bob rigged elections but has failed to rig the economy. Uncle Bob Is now failing to pay govt workers,the economy has collapsed, no…
Issuing irrelevant statements instead of sorting out the economy…everything is in shambles.
BOZ and IMF has been encouraging Lungu to rig the elections by giving the impression that negotiations for money will start soon after elections are over. Lungu now thinks he can just cook election results and declare himself the winner and with his illegal Ministers in their posts negotiations with IMF can start on 12th August soon after Lungu is illegally sworn in. BOZ and IMF should encourage Lungu to deliver thru ECZ a free,fair, transparent and credible election. IMF should tell Lungu that No funds will be loaned to an illegitimate regime in Zambia. Illegitimacy will attract sanctions from the International Community. Lungu should be made aware of the consequences of rigging these upcoming elections. Lungu’s Godfather, Uncle Bob should tell him of the dangers of rigging elections.
If South Africa was affected by Britain’s exit from the EU and South Africa is our major partner then it has a domino effect , Zambia should be affected because the rand directly affected. Someone is not telling the whole truth.. The Kwacha cannot gain when the Rand is affected negatively.. Possibly if he said the kwacha has remained fairly stable even though the Rand has been affected negatively because of China being a more major partner than South Africa..
The Governor of BOZ and officials of the Ministry of Finance should be worrying about the impact of a rigged election than Brexit. A rigged election will produce an illegitimate govt which will not be recognised by the International Community. This means that Zambia will be put under sanctions and will not be able to borrow money from international capital markets. The Kwacha will sharply depreciate increasing debt servicing obligations and pushing up the budget deficit in the process.Donor Aid will also dry up and prices of goods and services will sky rocket so will inflation. The impact of economic sanctions will be much greater than Brexit. Lungu is under a wrong impression that he can rig the elections as he pleases and still get IMF money. It does not work like that. Just look at…
Two contradictory statements from the same interview?
— “Dr Chipimo said it is too early to determine the implications of the Brexit..”.
— “BANK of Zambia (BoZ) says Britain’s exit from the European Union (EU) will not have an immediate impact on the local financial markets…”.
I know Economics is not an exact science, but these are too divergent to be swept under the carpet.
To start with.., the Finance Minister is sleepy… He is not even aware that Britain is no longer in EU.
Maybe its the age factor to him! Can’t believe this sleepy man.
Euro bond was acquired at a time when dollar/kwacha was 1/6.3… It is hoped that at the period of repaying, dollar/kwacha will be 1/6.3 again! Otherwise the country will repay in excess of 15 times the borrowed money.
The result of making political impulse decision without critical thinking!