With about $3 billion foreign reserves covering 5.4 months of import cover, Zambia’s economy is stable and able to respond appropriately to any eventuality, says economist, Yusuf Dodia.
Mr Dodia, who is the Private Sector Development Association (PSDA) chairperson, said holding foreign reserves of close to $3 billion would enable the country to maintain its economy in the wake of a crisis for the given period.
He said in an interview that this meant that the country would have enough from the reserves to keep the economy afloat for at least five months should the economy for some reason suffer challenges with production.
“If as a nation we are holding foreign reserves of $2.9 billion which covers 5.4 months of import cover, that is commendable,” he said.
Mr Dodia explained that most economies look at the import cover of around three months foreign reserves, therefore Zambia was on the right path.
He said the country was moving in the right direction and should continue building foreign reserves to secure the economy.
The Bank of Zambia said recently the foreign reserves rose to $2.9 billion equivalent to 5.4 import cover after the receipt of $1.3 billion IMF special Drawing Rights at the end of August.
Zambia’s true forex reserves are only $1.6bn . The rest is a standby credit extension by IMF if Zambia comes under stress.
Na sekafye.
KUDOS to Edgar and his team!!!!!
PF did a great job….. They built hospitals and clinics. They built school in rural areas. They opened up the country with a good road network.
And with all that development they even left $3billion in the coffers. This was a great performance by any standard.
Many a time in the past I have admired some of your contributions but on this one, it’s thumbs down. A lot of the roads you so mention were shoddily constructed with a very short life span and in more times than not, the tenders were awarded to cadres with no experience in road construction at all but all for patronage. The clinics and hospitals are white elephants without doctors nor medicines because the government has no money to service them. The $2.9 billion. You remember the Smith declaration of UDI in Rhodesia in 1965? We had to suddenly at short notice divert our imports, especially oil, through the Great North Road (The Hell Run) and it’s in such cases that reserves come in handy. For the record PF left behind $1.4-$1.6 billion only.
Thank you Mr. Dodia for putting the record straight. They are lying to us!!
These PF are not going anywhere. Anything is commenting on ka $3 billion.
How much is Amazon guy making day, same as Zambian “reserves “.
Trouble in Zambia is even people who have never run akantemba are allowed to voice running commentaries on issues they least understand.
So 3 billion include 1.3 from IMF Yabah!!!
It’s quite sad that we are still debating the performance of the previous government.
A mad man would even do better given the resources at their disposal. How can a normal government contract debt carelessly and they were even lying to the ones going to service it. $27 billion is not a joke country men & women and it’s you and me who are going to suffer.
$2.9 billion inclusive of the $1.3 billion bailout package against the $27 billion debt.
Someone one has even become a choir member going around churches just to win the people’s love back, we shall lift his immunity and just subject him to the law agencies.
LT why are you still censoring my comments in an era of free speech? What do have to moderate in a simple sentence like that yet you let Nakachinda and Sean Tembo insult the president anyway they feel?
Lying when you have defaulted on 42 million
Who is telling the truth,we are tired of being told lies. May a panel of economic brains help out on this very important topic to a conclusive end. This sounds like the once proclaimed Bill 10 which had two side the PF and it’s associates giving a brighter vision and the UPND defining the bill as gloomy. May an independent person with the love of our country come out and redeem us before we are mislead. Where is Andrew Ntewewe ? I need his NGO to go around the country side to explain this to the young people.
Mr Dodia shows here he knows nothing about economy and finances. There surely will be some money in the coffers. But if you at the same time owe more than 30 BILLION DOLLARS to your creditors it doesn’t mean much, doesn’t it? And all those useless projects from Edgar China Lungu were built with BORROWED money!
For sure this dodia knows nothing…….its kamwala economics ..
$3 billion only ? of which $1.4 is IMF money
Ati remarkable ??
When you owe $17 billion and you have massive unemployment and trade deficits ???
Kamwala economics thinking….
Some of these Economists you wonder how the researched for their degree papers
If indeed its true that the country has foreign reserves standing at US$2.9 Billion how come there are no essential drugs in our health facilities, Retirees have not been paid their dues, govt failure to remit P.A.Y.E, Napsa and Pension board contributions and failing to pay local contractors, suspension of various capital projects and defaulting on international debts when they were due. These paper tigers are at it again trying tom justify their total failed schemes hence resorting to the language a common does not understand. Things on the ground are not all that rosey as some are portraying the god picture. In a thriving economy smiles are seen on the citizens’ faces because benefits trickle down to them in form efficient service delivery such as good health acre, high standards of…
How come council workers went unpaid? how come local contractors are still unpaid? Do these economists understand the difference between TREASURY and RESERVE? The two mean different things hence President HH just staying quiet and working hard behind closed doors. My fellow country men and women, These half baked responses from Economists means we need to re look at our education system! So not a single professor of Economics from any Zambian reputable university can stand up and explain this pandora? Where does that leave the rest of us? lol!
Mr Dodia your economics is not perfect.If we
Are stable how are we defaulting on loan
Payments?look at three billion against loans
If correct at seventeen billion.At least thank
Zambians for putting Bally otherwise we could have seen loans taken at inflated tenders to benefit few individuals.
Yet we owe two times more than that? So if we have a global crisis and creditors come calling we ll be left with nothing tefyo?
There’s no dispute that PF didn’t do well in financial management but to say coffers are empty is not true. To net off reserves against total debt simply means you are closing shop. In short, you are not a going concern. Everyone including HH knows Zambia is a going concern otherwise he wouldn’t have been fighting to be president of a ‘failed state’ as some say.That’s why a company can have loans and mortgages but are operating a positive cashflow. Bane bonds are long term liabilities and the repayments can be renegotiated. You may not like or want to hear what Mr Dodia said but he is right. There’s no financial management explanation UPND can give to justify the empty statement. The finance minister misled the president whether you like it or not. Talk budget deficit,…
HH and his alliance partners have to quickly get on top of things. They shouldn’t let these corrupt and shameless looters regroup and start taking Zambians for granted by making noise to win sympathy. If they let them go on like this people might start believing in the lies that they have continuously been propagating. Don’t give them the oxygen like what has been going on in South Africa where the country is in paralysis caused by Zuma. Some of the people making noise are sponsored by Adado. They are doing something the didn’t allow citizens to do. If left like this they’ll suck up the oxygen and deviate attention to bickering while they’re busy hiding their loot.
Talk about budget deficit, misappropriating of funds, dubious government procurement and the like then you will have a valid and solid conversation. Defaulting on loan repayments has consequences for a country just like at individual level. Otherwise these are common occurrences with lending institutions that’s why they provisions for bad debt and insure these debts.
Former Finance minister Dr. Bwalya Ngandu challenged the new administration to name the creditors whose loans were not disclosed. Has anyone heard the govt respond?
The citizens were misled with ‘No money in the purse’ and yet here we are now discussing 3 billion. Its like the new govt is laying a foundation for excuses in the future.
SMOKE AND MIRRORS
ALL WILL BE REVEALED IN THE FUTURE
WE IN FOR A SHOCK
Now we know why Zambia is in a mess with these half baked economists. He certainly must have been enjoying brown envelopes. Zambia’s treasury is empty.
To be proud of $3 billion for the whole nation, & apparently to last five months!! Our expectations are truly mediocre! We are content with peanuts!
The bottom line is Politicians are all thieves…just like a prostitute telling you that she’s a virgin…whether HH or Lungu…at the end of the day they want to steal…whether Trump or Biden…same thing all useless…they steal and make deals and big business contracts for their families
What is motivating this Dodia to issue such a statement? What a Private Sector Development Programme representative!! Why not just shut up Dodia. I had my suspicions but now with this statement from Dodia, I confirm that Dodia has been and is a PF surrogate!! Allow serious people in the new leadership to check and manage the treasury in credible and professional manner.
Maybe it’s a matter of interpretation, you know, when Bwalya Ng’andu says the coffers are full it’s because his nearest comparable to coffers is Zaire, where coffers are forevermore empty because of theft!
I see…, some of you just want to come on this platform and argue mindlessly with people who seem to know what they are talking about. Mr. Yusuf Dodia’s statement is correct and true. At least if you want to contradict and argue with him, offer something that make sense and is correct. Yusuf’s statement has nothing to do with FOREIGN DEBT because IMPORT COVER has nothing to do with a country’s debt burden. However, important cover (or what is commonly referred to as FOREIGN BANK RESERVES,) has a direct bearing on the stability of the EXCHANGE RATE of the country’s domestic currency against the RESERVE CURRENCY, usually the U.S. Dollar. All countries have some form of debt (foreign, domestic, or both) and at the same time have to maintain Foreign Bank Reserves (a.k.a. Import Cover)…
Continue….
…to cover the country’s imports in case of some unanticipated foreign market shocks. Usually three months of import cover is considered good enough. My advice to some of you is that at least GOOGLE some of this info before commenting. That way you can discuss the subject at hand from somewhat an informed position. You don’t have to be an expert or have studied economics to do that!
CHECK OUT SOME QUOTES FROM “THE ECONOMIST, and QUORA” BELLOW:
Quote (THE ECONOMIST): Import cover (Aug 12th 2010)
“Countries hold foreign-exchange reserves partly to protect themselves against external crises. But how large a stash is enough? One common rule of thumb is that reserves that can cover three months’ worth of imports are adequate. By this criterion, China and Russia, whose reserves cover more than two years’ worth, have excessively large hoards. Other emerging countries, like India, Brazil, Thailand and Argentina, also have reserves that are several times the amount needed to cover a quarter’s imports. America, the issuer of the world’s reserve currency, does not need as thick a buffer as other countries do. Its holdings at the end of March would not have paid for even a month’s imports.”
Quote (from QUORA):
Countries hold foreign-exchange reserves like( foreign banknotes, bank deposits, bonds, treasury bills and other government securities) partly to protect themselves against external crises. Import Cover measures the number of months of imports that can be covered with foreign exchange reserves available with the central bank of the country. Eight to ten months of import cover is essential for the stability of a currency. It is an important indicator of the stability of a currency.