INTERNATIONAL economic relations Professor Oliver Saasa has said the Kwacha is not the weakest in the region, adding that currency’s stability which the Bank of Zambia (BoZ) had achieved was more important for an economy.
He said it was incorrect for Patriotic Front (PF) leader, Michael Sata to say the Zambian Kwacha was the weakest currency in the region because there were other weaker currencies.
Prof Saasa, like Economics Association of Zambia (EAZ) president, Mwilola Imakando said the importance of a strong currency depended on its use in national development, saying export-inclined economies required weaker currencies.
Prof Saasa, who is Premier Consult managing consultant, said there were countries which had weaker currencies than the Kwacha, although that was immaterial as far as national development was concerned.
He said what was important was the currency stability which he said the BoZ had achieved.
He said contrary to Mr Sata’s view that the Kwacha was the weakest in the region and, therefore, that was bad, international economic organisations like the International Monetary Fund (IMF) and the World Bank held a view that the Zambian currency was too strong.
“It is anomalous for anyone to suggest that the Kwacha is the weakest currency in the region because it is relatively stronger and hence, good for the marketing of non-traditional export products like tobacco,” said Prof Saasa, who is former University of Zambia lecturer.
Prof Saasa said the Kwacha was faring well among other convertible currencies like the US dollar and the British pound.
He said the situation had been strengthened by the Kwacha stability which was being backed by decades-record of the biggest national reserve of about $1.7 billion.
He described a strong currency as being like a double-edged sword, saying its significance depended on what kind of the economic path the country wanted to take.
Prof Saasa gave an example of countries like neighbouring Malawi whose Kwacha had higher value than Zambia’s but the economic levels were not so high.
In a separate interview, Dr Imakando expressed similar sentiments, saying export-oriented economies would benefit more from a weaker national currency because the products would be more competitive as opposed to those with overvalued currencies.
Dr Imakando said abnormally strong Kwacha would render the local products uncompetitive on the international market because the prices would be unaffordable.
He, however, said when the country wanted to embark on major capital projects, which required importation of machinery and other things, a stronger currency would be more desirable.
Dr Imakando cited Japan and China whose respective currencies are lower compared to other major convertible currencies and yet they have giant economies, saying that went to show that the strength of the currency was immaterial.
