The real reason Zambia’s money is beating the dollar
Early January 2026 delivered a moment of validation for Zambia’s economic direction. The kwacha, once weighed down by years of instability, emerged as the world’s best-performing currency. The turnaround was striking. Only months earlier, the exchange rate had hovered near 29 to the dollar. Within less than a year, the currency strengthened by nearly 30 percent.
The shift reflects deliberate leadership choices under the United Party for National Development (UPND) government and President Hakainde Hichilema, whose administration placed economic discipline and institutional credibility at the centre of governance.
Zambia’s recovery began from a difficult position. In 2020, the country became the first sub-Saharan African nation to default on its sovereign bonds. Debt pressures mounted, investor confidence weakened, and the kwacha bore the brunt. By March 2025, currency stress remained evident.
Upon taking office in 2021, the UPND administration committed to restoring fiscal order and credibility. That commitment translated into action. Public finances were tightened, monetary policy was restrained, and debt restructuring was pursued with consistency. In 2022, Zambia entered a 38-month extended credit facility with the International Monetary Fund, anchoring reforms in a rules-based framework that signalled seriousness to both citizens and international partners.
Progress followed. By mid-2024, IMF reviews confirmed steady implementation, and support was increased. The reforms rebuilt confidence, yet the government recognised that deeper issues remained within the domestic economy, particularly the widespread use of foreign currency in everyday transactions.
The decisive breakthrough came on December 26, 2025, when authorities issued the Currency Directive 2025. The directive required all domestic transactions to be settled in kwacha, restoring the local currency’s central role in the economy. It was a clear assertion of monetary sovereignty, backed by enforcement rather than rhetoric.
Markets responded immediately. Businesses and traders converted dollar holdings into kwacha to meet tax and local payment obligations. The surge in dollar supply, combined with rising demand for local currency, drove a sharp appreciation of the kwacha.
External conditions reinforced the gains. Strong global copper prices increased foreign exchange inflows into Zambia, Africa’s second-largest copper producer. At the same time, the government allowed parts of mining taxes and royalties to be paid in Chinese yuan, reducing reliance on the dollar in public revenues and strengthening currency management.
Together, these actions reflect a coherent strategy. Policy discipline, commodity strength, and institutional credibility worked in concert, guided by a government willing to make firm decisions in the national interest.
While long-term sustainability will depend on continued diversification, energy reliability, and reform momentum, the current outcome stands as a clear endorsement of the UPND government’s economic stewardship. Zambia’s currency resurgence was not accidental. It was the product of leadership, planning, and the resolve to reclaim control over the country’s financial future.
Yeah…….
election gymnastics as some would say……..
Let GRZ show consistency to prove to them that this is a real trajectory………
No free handouts, but those who know know ,still much a work to do……..
We are here
FWD2041
Remember if a man goes on top during 69 position then know he hates you . I will go on top of mutinta hichilema when I 69 her after hh loses elections
Akamba malabishi.
@Kaiser Zulu, I remember you. The heart of your foolishness is in your mouth. Muli waka ?awemi nga ni libwe ilo lili pakati pa malo ghambura kanthu.
@Kaiser Zulu, why do you always allow your mouth to go all the way out of any normal person’s thoughts.
Nkana I dont remember you because you so insignificant. Hh foreskin has more use than you
So we can now have cheaper petrol and import tuma useless stuff from Dubai. Meanwhile getting paid 30% less for our copper and agri exports. Just so we feel like we have a big strong macho currency
HH FOR ROAMING ambassador 2026
Kkk but the current trading price of 18 is just one short of the trading price in 2021 when tu pf were in power so we have come full circle or are we missing something
As usual hood winking people. Every thing coming into place in the 5th year. How i wished every year could be election year. Any way to late, as minds are already made. You can not be cheated to twice
This article provides a well-structured and internally consistent explanation of the kwacha’s recent appreciation, grounded in recognised macroeconomic mechanisms. However, the analytical balance is limited by an optimistic interpretation of causality, insufficient separation of structural and cyclical drivers, and a tendency to combine exchange-rate performance with broader economic success. A more cautious framing would look at the currency’s strengthening as a provisional outcome that reflects both policy improvements and favourable conditions, instead as a definitive confirmation of long-term economic transformation.
He forgot to mention that the USD has crashed worldwide due to Trumps incompetence, plus copper at all time highs, not to mention the Kwacha is not traded on world live markets, its pegged by the bank of Zambia. watch it crush back to 30 to 1 USD by Christmas as the election will be over.
You’re a Congolese who doesn’t like Zambia
Why do we wish negative things for our own Country. When things are doing well let’s give support. There is no perfections in any human being. I rest my case.
It’s not being negative if you are aware of events since the kaunda era to date just political rhetoric and false misleading information being passed down to us
What a useless article. Everyone knows the dollar has lost value because of trumps feud with the previous federal reserve chair. You just need to look at how other African currencies like the rand have all of a sudden gained on the dollar to know this is a worldwide phenomenon nothing to do with local gymnastics. Now that Trump has appointed a new chairman for the fed reserve and once he gets his house in order you will see how the kwacha and other currencies will start losing value fast even reaching K30 to a dollar.