Wednesday, May 29, 2024

Is It 14 Hours Yet? President HH and the Rapid Depreciation of the Kwacha

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By Kapya Kaoma

In Ballycountry, it is 10 hours, August 24, 2021! Soon, the Kwacha will appreciate from K21 to K10 to the US dollar at 14 hours, when the best economist and the most intelligent President will be sworn in. In Zambia, however, it is March 7, 2023, and like koswe, President HH is busy smelling for “dollars” abroad while the Kwacha is at 21 to $1, and counting.

Despite winning the annual global lying contest, he finally said the truth so loudly, “black mamba interest” under which international debt is contracted sniffle poor nations from getting out of debt. Which economist didn’t know that? Only a foster child of the IMF/World Bank was made to believe that his predecessor’s refusal to sign off to the evil IMF deal was due to incompetence! Now the once celebrated “economist” has to helplessly watch as the Kwacha falls into disarray.

I called President Hichilema very ignorant when he boasted that the Kwacha was the best performing currency against the U.S dollar in the world. He wrongly attributed it to his leadership, yet every economist knew that the U.S dollar was at its weakest due to the COVID Pandemic, the Ukraine War, the cooling Chinese economy and other global factors that led and are still leading to fears of a global recession. Moreover, the price of copper was at its highest. Currently, copper prices are low and the global economy is uncertain. HH has nothing to do with how the Kwacha performs–another reason he cannot do anything to arrest its depreciation. He can only hope for the best!

The artificial rapid appreciation of the Kwacha was chiefly due to HH’s love affair with the IMF/World Bank–they saw him as a fool who would dance to whatever he was told by those capitalist vultures. But this love affair has already led to some headaches–like Lungu, HH has refused to follow Bretton Woods’ recommendations on restructuring the Chinese debt. Why? Because like his predecessors, the negative economic effects on Zambians will lead to political instability of untold magnitude capable of ending his political career before 2026. So how will he negotiate the economic territory in which he thrashed himself?

The Kwacha becomes the victim. Just as the Kwacha gained after the IMF long awaited deal came through (foolishly at a lower rate of less than K15 to $1), the same vultures have to withhold their dollars–weakening the Kwacha under the premise that the strong Kwacha harms investors. But Zambia has to pay its bills, pushing the Kwacha even further down. Another reason Zambian financial institutions have to fund capital projects like the roads–the debt limit cannot be lifted without restructuring the national debt. So harsh times are coming!

The Bretton Woods institutions and China have one goal–making maximum profits. HH’s endless “koswe” trips won’t stop the Kwacha’s free fall as long as copper prices are low, the Chinese and US economies are uncertain, the war in Ukraine continues and chiefly Zambia’s debt is not restructured. To be fair, HH cannot be blamed–these factors are beyond his reach. He doesn’t control the US or Chinese economy, the war in Ukraine or copper prices. Sadly, just as HH unfairly blamed Lungu when the Kwacha hit 20 and counting to a dollar, his opponents will blame him. Because he took credit for its appreciation, he and his cronies must equally take responsibility for the Kwacha’s depreciation–unfair as it is.

Is it not time we understood the answer to the stabilization of the Kwacha? We need to move from a consumption to a production economy. The engine of Zambia’s economic growth is ourselves. Sadly we are the most ignored. Farming, for example, is profitable–so why not invest heavily in farming? It is foolish to even argue about how many bags of fertilizers each peasant farmer should get–if fertilizers were made cheaper and readily available and agriculture moved beyond maize to include flowers, horticulture, poultry, and animal husbandry, Zambia would be in the better position to compete on the world market. If local companies were empowered to build roads and other big capital projects, our economy would become stable. Sadly, we only reward foreign investors! No wonder President HH and Mr. Musokotwane can defend giving the Chinese company 700 million dollar-loan to build and manage our road for 25 years–knowing too well that the lifetime of Zambian roads are between 10 to 15 years!

In Ballycountry, economists are only qualified to work with foreign investors!

30 COMMENTS

  1. The most intelligent president in Africa has failed to control the dollar.

    I wonder why he continues flying when the cost of living is very very bad backhome.

    19
    • The super and most intelligent president in Africa!!
      He now prefer to spend more time in planes( Hired planes) for that matter. The kwacha keeps falling.

      13
    • HOW DOES HE CONTROL THE DOLLAR? ITS THIS PF MENTALITY THAT MADE YOU LOSE, YOU ARE SO DULL. YOU LEFT THE DOLLAR AT K24, HAVE YOU FORGOTTEN IMWE BA KEMBO!

      18
  2. When you are on the bench you don’t criticize those on field but study and find out why they are losing the ball, why they are failing to defend, why they are not scoring. After that you will have a better chance when you are given a chance to play. Excuses don’t save a situation and neither do they serve any purpose.

    19
    • That is why it important to avoid boasting until you have reached the finals and won.
      Upnd where boasting in the group stages. Now in the quarter final, they are finding that they have to play Real Madrid.

      We all want hh to succeed because its for the good of the country. But the approach that they have taken is a very slippery one. Leadership is not about theories and thinking that foreign investors are the ones to develop the country. The idea must be to strengthen the locals and clean up the system. But as it is the levels of corruption remain unchanged. The amount of regionalism is the same as pf, and fast surpassing. Of course the only difference is who’s in and whose out. Being bemba is risky these days lol

  3. Kikikikikikijukija instead of fixing the economy, it is now fixing him. Instead of running the country, it is now running him. May the IMF deal fail in Jesus’s name. So we can have presidents who understand that only Zambia with its local resource prudent management is an answer to our economic quagmire. Vasco da hichilema has been fixed. Alesampwisha icalo uyu. Indeed Zambia needs to drift from Consumption to Production. That’s what grows the GDP. Sadly the puppet in power can’t take us there. Stop that Agriculture minister from bringing Kenyans to farm in Zambia please.

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  4. Best article that I have read this year. The writer understands what can transform Zambia within the next 5 years.

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  5. That is why it important to avoid boasting until you have reached the finals and won.
    Upnd where boasting in the group stages. Now in the quarter final, they are finding that they have to play Real Madrid.

    We all want hh to succeed because its for the good of the country. But the approach that they have taken is a very slippery one. Leadership is not about theories and thinking that foreign investors are the ones to develop the country. The idea must be to strengthen the locals and clean up the system. But as it is the levels of corruption remain unchanged. The amount of regionalism is the same as pf, and fast surpassing. Of course the only difference is who’s in and whose out. Being bemba is risky these days lol

  6. Given the shambles in public finances that was HH’s economic inheritance from the PF, it’s actually amazing that we’re still standing. It can easily get much worse than it is already but Kapya Kaoma cannot understand that.

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    • Shambles? Is it now that you are seeing them? Bottom line is HH thought his sponsors were going to continue sponsoring him free of charge. Open your eyes.

      11
  7. YOU WERE QUIET WHEN THE KWACHA WAS FLYING AT K16 PER DOLLAR. YOU FIND TIME TO ATTACK THE PRESIDENT NOW THAT ITS RUNNING TO K20, YOU FORGOT THAT IMWE BA MWANKOLE LEFT IT AT K24. CURRENCY VOLATILITY IS A FACT OF ECONOMICS, BUT WHY SHOULD I EXPLAIN THAT TO PEOPLE WHO THING ITS A MEASURE OF FAILURE. UP TO 2031 TILIPO! PREPARE YOUR HEARTS TO CONTINUE HURTING….

    17
    • @kabola Ntwentwe. You primitive capital letters using illiterate! Check your facts before you expose your UPND Id!0cy here!!! In August 2021 when PF lost power the Kwacha was at K15.9 to a Dollar, so what nonsense are you trying to spew here?

      13
  8. Even in Cabinet some ministers have started doubting the capacity of the president to improve this economy. Nothing seem to be working and the president is all over the place gallivanting from one place to another. But achieving nothing.

    11
    • PF borrowed from China to acquire solar hammermills which were to produce cheap mealie meal. The hammermills hv long since been installed. Where’s the cheap mealie meal? But we’re still in debt to the Chinese.

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  9. A patchwork of drivel………….don’t stop your medication , kapaya.

    The world is in recession rightnow. Only arms manufacturers are seeing good times.

    Looks like a good time again to buy kwacha……..

    because as sure as the sun raises , the kwacha will soon be 15-1….

  10. And you Kaoma believed this would happen? By what means? You ain’t as smart as you try to portray yourself. You owe billions of dollars, produce s”t as a country and yet you’re looking for favors in your exchange rate? Politicians promise you the moon, you run with it like some illiterate. And now you’re ready to collect? What work have you put in? Freeloading will get you no where. Roll your sleeves and put in some work MF!

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  11. People talking without mentioning workable solutions. Here are a few:
    1. Restrict huge Forex outflows of amounts above $1 million (out of the country)from big mining, manufacturing and food processing firms immediately.
    2. Promote trading in local currency by offering tax incentives to locally sourced materials and supplies
    3. Investigate individuals that are hoarding USD in excess of $1million
    4. Encourage export of all food products (maize, soya, vegetables) with no restrictions whatsoever
    5. Encourage exports of Zambian services to neighboring nations, teachers, engineers, technicians, agronomists, nurses &doctors so as to increase Forex remittances back home.

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  12. Ctn…

    6. Tourism sector must be marketed at a a very aggressive pace, we need more tourists to come to Zambia to spend their dollars here.
    7. Investigate insider trading of Forex at the BOZ and commercial banks
    8. Alternative sources of Petroleum must be found, let us take a leaf from Uganda and Tanzania who in less than 5 years worked out a deal that has seen Uganda export crude oil to Tanzania. Us here in Zambia have been talking about getting oil from Angola as far back as the Kaunda days which is why Benguela railway line was built, yet up to now nothing has materialized.

    If these practical steps are taken I believe

  13. Ctn..
    Oh and sorry lastly and most importantly…
    We need to add value to what is coming from the mines and we need to claim a larger stake in it. Our mineral wealth remains out greatest wealth and yet we are not benefiting from it at all, we have two main cable processing firms in Zambia, Zamefa (General Cable) and Neelkanth. We need more to set up manufacturing here in Zambia, be they Chinese or whatever the case. We are letting money pass through our fingers like water. Gold, Nickel, Uranium, Lithium, Manganese, Silver, Diamonds, emeralds, and even that new gemstone discovered in Luapula etc ..are we normal thinking human beings sure to not fully utilize our resources to earn more FOREX hence reduce the demand for the USD?

    Wake up guys!

  14. We were laughing at PF ati kwacha is now old enough to drink at 18. Then kwacha became an adult at 21. Upnd are going the same way. In the next few days kwacha will reach adulthood, already it is allowed to vote and drink alcohol.

  15. PF borrowed from China to buy solar hammer mills. After harvesting, people in rural areas never even ask about the price of mealie meal. They had maize and grinding mills – that simple!. Of course, this year will be a different story, no maize for the majority of farmers without fert.

  16. PF regime was one of the two countries in the world that defaulted on loan repayment it borrowed.
    Kapya Kaoma was alive and still living in Zambia.

  17. This is a well written article, very polite and still drives the point home. We have a sophiscated conman in state house but like they say ” lies have short legs” so Hakainde’s lies are not quite fast and the electorate are catching up with them. The narrative of lies will not survive. We have a cartel not leaders in this great nation. And this cartel is lead by a single handedly man. He will probably answer to a lot of questions once someone receives the instruments of power from him.

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