“Finally, we will be able to put money in our wallets again,” I thought upon hearing of the impending introduction of higher-denomination banknotes. A recent experience at Shoprite, however, highlights a bigger issue than mere portability.
Attempting to purchase groceries with my sister, the projected bill of over K4,000 presented an immediate dilemma. Reliant on cash, the prospect of counting out stacks of Kwacha felt embarrassing. “Sorry,” I told her, “I left my wallet at home.” The reality was I had a bag full of cash – a burden in itself.
After paring down the purchase, the final bill came to about K2,300, less than $100. In an American context, that wouldn’t stretch far. Yet, for many Zambians, that sum represents a significant financial burden. Sadly, people are forced to carry large sums of cash for daily transactions unless they have a card.
The inconvenience of carrying large volumes of cash is a symptom, not the disease – it’s a consequence of uncontrolled inflation. What we perceive as K100 is, in reality, a remnant of a debased currency – a ghost of K10,000. The Kwacha’s devaluation—the mere dropping of two zeros—created the illusion of value for the once worthless bill. The currency never appreciated against the dollar; it was simply truncated. This manipulation shaped our perception of wealth – something we are living with. This historical context requires critical attention when debating the introduction of new notes.
Social media influencer Mama Chikamoneka argues that K100 is the new K20 because K20 and K50 can hardly buy anything anymore. She is right. The cost of living is too high, wages are too low, and the Kwacha is losing value daily. Thus, the current debate surrounding the reintroduction of a K500 note seems misplaced.
The real value of major transactions is now in the tens of millions when accounting for the pre-debasement currency. Since 2021, a conservative estimate places the country’s inflation rate between 17% and 22%. Regardless, inflation has eroded the Kwacha’s purchasing power, and the HH administration’s ideal of parity with the dollar (K10: $1) is unattainable.
While a further currency redenomination (dropping another zero) is a theoretical possibility and would temporarily offer superficial relief, it’s a short-term fix with some destabilizing consequences. Imagine: ubunga (mealie meal) at K30, fuel at K3.4 per liter, fertilizer at K100 – headlines that would undoubtedly resonate favorably with President Hichilema and potentially fulfill campaign promises, at least on paper. Over time, it would also foster the misleading belief that the Kwacha is stronger.
Such a move, however, would be symbolic, masking the underlying economic challenges we face. While the new banknotes may provide the immediate benefit of fitting in our wallets, a genuine solution requires addressing the root causes of inflation and fostering sustainable economic growth.
As long as Zambia’s economy relies heavily on foreign investment and Zambians remain primarily consumers rather than producers, inflation will continue to plague the nation. The convenience of a K500 note is merely a band-aid. Zambia needs robust economic policies, not just cosmetic changes to its currency.
Despite President Hichilema’s promises of economic betterment, many Zambians say they continue to struggle. “Times are hard” is a common refrain, with citizens seeking tangible solutions to the country’s economic woes. Instead of relying on mismanaged Constituency Development Fund (CDF) grants, the government should focus on empowering Zambians to become active economic agents through job creation.
Reviving the Zambia National Service (ZNS) program, for example, specifically tailored to create new jobs in various sectors, could be a viable option. Utilizing ZNS to build roads and other infrastructure, instead of awarding contracts to foreign companies, would ensure that Zambian money benefits Zambians themselves. Local empowerment is key to national development. It is time to act.
