Green Party President Peter Sinkamba has advised government to take advantage of the falling oil prices to market the Zambian Kwacha and raise funds to liquidate the rising external debt.
The meltdown in the oil market has caught almost everyone off guard and is likely to significantly hurt oil producing country.
In the span of mere weeks, crude prices went from a four-year high to a full-blown bear market.
The oil crash whereby crude oil is down more than 30% from its recent peak, was triggered by a series of factors. This has come at a time when traders were expecting $100 per barrel.
US oil prices plummeted another 7% on Friday, breaking below $51 a barrel for the first time in 13 months.
President Donald Trump celebrated the oil crash.
“In Zambia, we should celebrate too, if we get smart about this whole thing. If Government is looking for big business to fund-raise, this is the best time. Of course we will buy oil cheaply and thereby significantly reduce the cost of fuel in Zambia. Though fuel price reduction could have a ripple effect on the economy, however, this is not where money lies. Money will be in the forex business as a spin-off from the downturn.
“At the moment, the Forex pair with good return is the USDZMW and can be a profitable investment option for petro-dollar investors during a down-turn like this one at the current rate of K11.86/USD,” Mr. Sinkamba said.
“Based on forecasts, a long-term increase is expected. According to currency Forecast Systems, the USD/ZMW Forex pair is a good long-term (1-5year) investment. Forex rate prognosis for November, 2023 is 19.275. So, with a 5-year investment, the revenue is expected to be around +62.51%,” he added.
“If you invested $100 this month, this may go up to $162.51 in 2023. Better still, if you invest US$3billion, your investment may go up to US$4.86billion. This is one way Zambia could indirectly make a big kill to service external debts during the down-turn, not the buying cheap oil,” Mr. Sinkamba said.
ISSUED BY THE GREEN PARTY MEDIA TEAM
Opportunity Favor’s The Prepared Mind.
If You Take Panado,And You Diss Those Who Smoke Then You Are A fool.
Basically, Sinkamba is suggesting is for Zambia to create a SOVEREIGN WEALTH FUND. A brilliant idea but without risks. Hey, but who said investments are without risks, right? Here is an excerpt from “Investopedia” to briefly explain what a Sovereign Wealth Fund is and what it can do:
“A sovereign wealth fund is a state-owned pool of money that is invested in various financial assets. The money typically comes from a nation’s budgetary surplus. When a nation has excess money, it uses a sovereign wealth fund as a way to funnel it into investments rather than simply keeping it in the central bank or channeling it back into the economy.
The motives for establishing a sovereign wealth fund vary by country. For example, the United Arab Emirates generates a large portion of its revenue…
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from exporting oil and needs a way to protect the surplus reserves from oil-based risk, thus it places a portion of that money in a sovereign wealth fund. Many nations use sovereign wealth funds as a way to accrue profit for the benefit of the nation’s economy and its citizens.
The primary functions of a sovereign wealth fund are to stabilize the country’s economy through diversification and to generate wealth for future generations.
HISTORY:
The first funds originated in the 1950s. Sovereign wealth funds came about as a solution for a country with a budgetary surplus. The first sovereign wealth fund was the Kuwait Investment Authority, established in 1953 to invest excess oil revenues. Only two years later, Kiribati created a fund to hold its revenue reserves…
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Little new activity occurred until three major funds were created:
…Abu Dhabi’s Investment Authority (1976)
…Singapore’s Government Investment Corporation (1981)
…Norway’s Government Pension Fund (1990)
Over the last few decades, the size and number of sovereign wealth funds have increased dramatically. In 2012, there are more than 50 sovereign wealth funds, and according to the SWF Institute, has exceeding north of $5 trillion.”
Those interested can go to “www.investopedia.com” and read further for yourselves. Very interesting read.
In Zambia’s case, it doesn’t have to be billions of dollars to start with. But say half a billion would suffice at the moment. See how that works and whether it is worth the risk. There are plenty of well qualified…
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and ethical FUND MANAGERS out there who can help set up and manage this kind of investment for Zambia. Definitely a very PROGRESSIVE contribution from Mr. Sinkamba worth looking into by our Govt.
DANGEROUS FOR THE ECONOMY….WE GRAB THE DOLLARS FROM ZAMBIA AND EXTERNALIZE…NO NO NO
PF don’t understand symbol %,
So Peter stop mocking the PF.
i really like the guchi you are smoking these days
you are the only opposition leader without any hidden agenda, at least you are predictable and we know where you intend to take this country . you dont just say” i will fix it ” like a clueless satanist or magician from dundu and you dont insult and shout the loudest like a hippo in luanshya stream. you friends jump from one radio station to the other like monkeys pa mulongoti and flapping their lips without offering any solution. the truth is you are the only alternative in the absence of the current government. awe dobo eyabako.
Ubupuba mu Zambia, mulu waseela!
Not even God is ripe enough to heal this nation.
At least this is better than just I will fix it. How no clue.
Genuine opinion
Iwe @ Vanduu,please do not blaspheme God,he is bigger than anything,what do you mean that not even God is ripe enough to heal this country,do not invite curses upon your life and family,Jehovah God is almighty,he says in his word if my people who are called by my name shall humble themselves and pray and seek my face and turn away from their wicked,then will i hear from heaven and heal their land.God we heal this nation iwe Vanduu
This oil business is laced with hidden political influence. The issue of Kasshogi’s killing and Saudi Arabia’ King trying to appease Trump can not be relied upon for a long term. Iran’s sanctions have caused the oil prices to spike and Saudi Arabia is trying to comfort Trump that they can still cover the gup. Much as this idea by Sinkamba may sound nice, I don’t think it would be prudent for government to take this route. Medicinal marijuana cultivation has proved to be a profitable undertaking which can rake in millions. The South Africans have realized this fact, no soon should we follow suit the better. This is a God given herb which can not be depleted like copper. We can export tonnes of it amass a lot of dollars.
Stolen analysis.
The story is missing key linkages.
The linkages were unknowingly edited because specifics were mentioned.
Shalawambe
On this I think the man had started smoking again.
Zambia should reduce jet fuel aviation tax to attract international airlines and tourists.