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Alba Iulia
Thursday, September 9, 2021

Kwacha’s Strength is backed by Economic Fundamentals; Government Policy and High Copper Prices-Former Finance Minister

Headlines Kwacha's Strength is backed by Economic Fundamentals; Government Policy and High...

Former Minister of Finance, Bwalya Ng’andu has attributed the strengthening of the Kwacha to consistent high copper prices on the international market and renewed confidence in Government’s policy direction.

Speaking during a Patriotic Front (PF) Virtual Rally, Dr Ng’andu who is also former Bank of Zambia (BOZ) Deputy Governor. said one important factor responsible for the strengthening of the Kwacha is the price of copper that has been fairly high for a period of time.

“It is not just a blip but over a period of time we have seen copper price rising, reaching even the margin of US$ 10,000 per tonne over a consistent period of time. That means that there are inflows now, improved inflows into the foreign exchange market through the Mineral Royalty tax that the mining companies pay.

“So, if you accept the notion that Exchange Rate is fixed by dynamics on the supply side and on the demand side then you very well understand that because there are more dollars coming into the market, the kwacha obviously is in a place where it can get stronger,” Dr Ng’andu said.

He added that the appreciation of the kwacha can also be attributed to the successes of the PF Government policies.

Dr Ng’andu recalled that between September and November last year, the country was going through issues of debt default, which created a scenario that the Zambian economy was about to implode.

He said because of this, many players withdrew from the market and there were no foreign offshore investors to investors in the securities market.

Dr Ng’andu explained that this meant that there was no additional foreign exchange in the market.

“But now I think there is renewed confidence in what we are doing, I think there is now a firm belief that our policies, our policy direction is correct but also that we are implementing these policies correctly and that is beginning to create this improvement in confidence and we have seen now a number of offshore investors coming back into the market and playing a very active role in supporting the inflow of foreign currency into the Zambian market,” he said.

On energy, Dr Ng’andu said at the time the PF Government assumed office, Zambia’s power generation capacity stood at 1,900 Megawatts (MW).

He said the PF Government has added 1,350 MW of power to the national electricity grid, bringing the power generation capacity to the current 3,250 MW.

“If this process continues, very soon we will be able to generate far beyond what we need and consequently can become a net exporter of power in the region,” Dr Ng’andu said.

Meanwhile, Bloomberg reported that Zambia’s kwacha jumped the most since December 2019 as soaring commodity prices helped ease investor concerns about a debt revamp by Africa’s first pandemic-era sovereign defaulter.

The currency gained 5.1% against the dollar at 6.41 p.m. in Lusaka. It has advanced 13.6% this month, making it the world’s best performing currency in the period tracked by Bloomberg.

Zambia depends on copper for more than 70% of its foreign-exchange earnings, and sustained high prices of the commodity is helping boost dollar supply. Investors have also been lured by local currency bond yields of nearly 33%, with the expectation that the government will finalize a long-awaited deal with the International Monetary Fund after elections next month.

Copper’s record prices have been more than enough to offset a 3.6% drop in the southern African nation’s production in the six months through June compared to the same period a year earlier. Copper climbed as much 3.2%, the most since May 27 on Monday.


  1. It is not heart warming to have your own Kwacha as the best performing currency in the world aside from the usual nose diving scenarios?
    When the government saved Mopani Mine alongside the entire mine workforce in the heat of Civid-19 challenges, it looked illogical. But the dividends are there now.

  2. There in no economical fundamentals to talk about here, the only thing more pronounced is the hand yabene bachisushi. What you should know Mr minister we are now educated and information is really available you cant manuplate the mind of citizens by releasing more dollar in the circulation and think we are going to buy your cheap propagander.

  3. I grew up in UNIP times when it was fashionable to talk up fundamentals in the midst of squalor. This went on until people had enough in 1991. I wish the current guys strength and luck because today’s youth are not betting on pie in the sky… explain very, very carefully if you want to get away unscathed.

  4. Lies, lies, all artificial…. Ati backed by high Cooper prices, which Cooper, the one u pay back to China as part of the kaloba… Pathic Foools for real

  5. Why is a 50 ngwee kwacha strength such noise when the currency has depreciated by 15 kwacha over the last years? What don’t i get ???

  6. This is the first time in the history of democracy that the currency of a 3rd world country appreciates just before an uncertain election……..

    Even the IMF would not release funds because of this uncertain election,

    how is it that the kwacha can appreciate based on near speculation ????

  7. Nice to see our INVISIBLE Minister of Finance out in Public.
    This is Voodoo Economics Mr Bwalya Ng’andu.
    No citizen in his Right Frame of Mind believes all this positive news a few days before the Elections

  8. There is nothing to talk about the fundamentals it is just that the ONCE MIGHTY PF govt has released the the little FOREX on the market to prop up the Kwacha and this a temporal solution. Even payment of mineral royalties etc is not a factor but PG gimmicks to make us believe that they are a working govt yet they failed to perform. Exchange Rate in 2011 K5.00 to U$1.00 now compare to today’s rate still very high. Their numbers cannot add up. Dr. Ngandu is not being sincere he knows very well that things are not ok, all he is doing being diplomatic in his statement.

  9. It seems upnd supporters are allergic to the truth. For them, only the removal of the PF from GRZ and the installation of hh can work for this country even if it means manipulating the truth and facts to achieve that. Mwanawasa looked like a great economic hero because copper prices maintained a high price for over 10 years-remember, Mwanawasa left no huge infrastructure landmark to talk about despite a $1-K3 rate and $3bn reserves. So, the skepticism against everything PF seems to be backfiring as citizens will start feeling the effects of the fundamentals Dr. Ng’andu is talking about and ask themselves, “do we really need change as things are looking up?? “

  10. The biggest problem Zambia has is that even when things are going wrong , the hired useful i d i o t s will keep on singing praises and failing to speak truth to power. I think this is also a particular Zambian mentality to be optimistic for the future and pessimistic for the present. Ask a Zambian. ‘How are you?’ ‘Ah, panono mwe.’ But they will still say, ‘Tukaba bwino kuntanshi. Tafimbwalubilo.’ The future finds them in the same and even worse situation! They will borrow with alacrity, but when time to pay comes, it is a problem. This extrapolates to national issues. Doing nothing for the now, borrowing heavily for comfort, and hoping for the best for the future.

  11. This is a needless debate. Late Chris Chali of the Amayenge orchestra once sung of “kusiyana siyana kwancito, kwacha ndi imodzi”. The exchange rate is the price of one currency in terms another currency normally the main convertible currency used in world trade. The exchange rate is just one price that affects us. There are other prices such as the general price level also known as the rate of inflation which measures the cost of living. Then there’s another important price known as interest rates. Both the rate of inflation and interest rates hv not yet responded to the movement in the exchange rate because this takes time. It’s therefore too early to pop any champagne.

  12. It’s really sad to see the level of analysis that is coming from bloggers especially UPND inclined and this is really worrying because according to them anything positive from PF Govt is manipulation and cant be possible that’s a very wrong position to take and that’s why we keep saying the change we need is not in leadership but mindset change. To change from wild speculation and thinking with emotions to critical analysis of issues. Now when you check the prices of copper would you say there has’nt been any steady increase as well as increase in export of maize following the bumper harvest ? Coming to investor confidence because of stable environment and other factors like improved maize crop, steady power supply and overall improvement in debt transparency that make the lMF…

  13. When we say UPND is a cult they accuse us of hating Mr. HH and nothing positive can come from anybody except him. How paranoid can some people be. That’s why these coming elections are very crucial . We have to get rid of this nonsense of suspicion on literally anything coming from Govt just because it doesn’t suit their taste. Can you imagine the kind of Govt these guys will run? No wonder a number of their supporters are disciples of seer 1.

  14. “Bwalya Ng’andu has attributed the strengthening of the Kwacha to consistent high copper prices on the international market”
    The dull PF cadre has forgotten that Zambia’s copper exports have reduced in the last 2 years due to smelter shutdowns at copper mines coupled with low power supply.
    What fundamentals is he talking about.
    Just because brainless PF cadres will listen to your lies does not mean the rest of us will follow blindly.

  15. Lets call a spade a spade, Zambian politicians think and know that most of the people or electorate are dull. They will never question leaders about the lies they make or vote them out for not doing their jobs.

    Dr. N’gandu is telling lies, he should be ashamed to even go home to look at his family after telling the country such non-sense. If he really had guts and was a man of integrity he would have simply stepped down or refused to utter such lies.

    Only until Zambian’s wake up and stop being docile, learn to read and wake from the past ten years of lies. Then the country will move forward.

    Edgar Lungu and his goverment are the worst group of thieves to rules the country, he sold you guys a humble image and you all believed him. He is stinking rich now and him and his…

  16. Because of the elections, this small appreciation of the kwacha (more of which we would like to see) has been over hyped. For me it hasn’t gained much at all, considering that only a couple of years ago around this time the dollar was at K15. So it loses it’s value by double in 2 years and then there is excitement at this latest ‘gain’ – without reminding people that it’s actually very far from where it was. At other times there wouldn’t have been a mention of this -unless it had gained meaningfully or until it had reached a significant value

  17. Please stop talking about the kwacha now. It has already started depreciating again as of today. The small gains were short lived. Lies have short legs.

  18. @Independent. Which Smelter shut downs? Production here is on course and improving. By the way, we have two mines in our hands and we will regulate production to preserve the minerals for our future generations. Since Copper prices are on the upswing we don’t need to panic and dig any how. We will take advantage of the high prices and offset production cost that way. This is why we are against anyone who would want to come and give back our mines to Capitalists who have interests of where they come from and externalize wealth. The PF way is the way to go. VIVA ECL and PF!

  19. When a nation cant pay its depts the currency becomes stronger. This has never happened in modern times anywhere in the world. Why? Because limited reserves are pumped in the economy for short term effects. PF is the worst goverment ever in Zambian history. I am surpriced that people believe this cheap tricks. Lungu must find something else to do after the election. Leave the country would be good.

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