The tourism industry has been adversely affected by this Statutory Instrument.
This industry deals in foreign currency and imposing quoting in Zambian Kwacha is having a negative impact on pricing. Most companies have set up their own exchange rates to avoid losing out. If some hotel in Livingstone has been refusing to trade in Kwacha, cage their MD as an individual company without implicating the whole industry.
Look here, a lodge in Kafue/Lower Zambezi/Luangwa etc that trades on the international scale goes to the World Travel Market in London, Indaba in Durban, ITB in Germany (to name but a few) and quotes in foreign currency in order to compete and be understood on the global stage. Don’t be so pompous – be realistic – who understands Kwacha anyway outside Zambia’s boundaries?
A domestic Travel Company on Cairo Road that sells lodges/local airlines to the international market will also price these camps/flights in foreign currency. The lodges/flight companies will invoice that Travel Company in foreign currency, this is how it has been from the beginning of time. Not that change is bad, if it is good change, but resistible in this case as it is bad change.
What the government should do is pretty simple (I will talk about the Tourism Industry which I am conversant with) is to introduce a formula of ‘exempting’ international sales and tracking them down just like we do with VAT exemption (VAT 112).
For any sales originating from outside the country where Zambian Kwacha in not known, let us price in foreign currency; but for sales within the country maybe an exception of pricing in local currency can be allowed. The government is being myopic by implementing this Statutory Instrument – please make doing business in Zambia easy and flawless.
With this new directive, these local suppliers are now re-pricing inZambian Kwacha but using their own high exchange rates (more than BSR) and no government arm monitors this while that local Travel Company on Cairo road which received foreign currency from the UK based company converts forex at the bank’s buying rate! Believe you me that inflation is gona sky rocket. What with the rebasing of the Kwacha!
Written by Zambian Traveller