Government has banned the quotation of prices for goods and services within the country in foreign currency.
Deputy Minister of Justice, Elfridah Kansembe said no person shall quote, pay or demand to be paid or receive foreign currency as legal tender for goods and services on any other domestic transaction.
Kansembe disclosed at a press briefing in Lusaka today that according to the regulations of the Bank of Zambia Act , section 31 (1), a tender of payment of money shall be legal if it is done in notes or coins issued by the Bank of Zambia.
She states that since the Bank of Zambia is issuing kwacha and ngwee, all legal tender in Zambia shall therefore be in the said notes and coins.
According to the Statutory Instrument signed by Finance minister Alexander Chikwanda on May 7, 2012 all domestic transactions should be conducted using kwacha currency.
The Bank of Zambia (Currency) Regulations 2012 now forbid anyone from quoting, paying or demanding to be paid or receiving foreign currency as legal tender for goods, services or any other domestic transaction.
Contravention of the Regulations attracts a fine or imprisonment for up to 10 years or both.
The Deputy Minister who was accompanied to the briefing by Solicitor General Musa Mwenye, said government has over time and again expressed concern over the quotation of prices for goods and services in currencies other than which is legal tender.
She said this quotation of prices in foreign currencies has also resulted in distortion in prices and varying accounts declared for taxation and other fiscal management purposes.
Ms. Kansembe said the Patriotic Front (PF) government which is a pro-poor government and determined to create a proper fiscal management of the economy has decided to regulate domestic transactions.
She has, however, clarified that the regulation will only apply to domestic transactions in the country but not to foreign transaction.
The Deputy Minister also said that the business community shall still be allowed to exchange the kwacha with other freely convertible currencies and that the maintenance of the dollar account for the facilitation of business will also be allowed.
Government issued a Bank of Zambia (currency) regulation Statutory Instruments (SI) No. 33 of 2012 which was published in the government gazette on May 18 and bans all domestic transactions to be conducted using foreign currency.