The Zambian breached a new low at eight kwacha and now seven kwacha ninety ngwee to one US dollar or eight thousand to a dollar from a low of 4,500 at the time PF took office. In other words the Zambian Kwacha has devalued by over 100% in just over three years of PF economic management.
The value of the domestic currency in the foreign exchange market is an important instrument in a Governments fiscal policy and central bank’s toolkit, as well as a key consideration when it sets monetary policy. Directly or indirectly, therefore, currency levels affect a number of key economic variables. They may play a role in the interest rates you pay on your loans, the returns on your investment portfolio, the price of essential commodities in your local supermarket, and even your job prospects.
Thus the current continued mismanagement of Zambia’s Forex market is a source of great concern to all Zambians. While some will argue that a depreciated kwacha will make exports more competitive, in the case of Zambia it is a complete fallacy as we are a highly import dependent economy with very minimal productive capacity in exports. In fact we are more likely to higher trade deficits as a result of the weakening kwacha as the costs of production in Zambia continue to rise. Coupled with the irresponsible spending and borrowing by the PF government Zambia is in real trouble and could get to a state of depression.
With this continued instability in the Zambian economy foreign investors are shying away from investing in Zambia. Remember that foreign capital will tend to flow into countries that have strong governments, dynamic economies and stable currencies. A nation needs to have a relatively stable currency to attract investment capital from foreign investors. Otherwise, the prospect of exchange losses inflicted by currency depreciation may deter overseas investors.
Currently we are seeing companies retrench workers, higher prices for basic commodities and reduced output in all the key sectors of the economy. There is need for sanity in the management of Zambia’s economy otherwise the situation will become even more frustrating for the people of Zambia.
As UPND we would ensure that the Bank of Zambia has total independence to manage monetary policy without undue political interference. We would ensure that all BOZ senior management is appointed on merit alone and not whether they are members of UPND as is the case today where unqualified PF cadres are in senior operational positions within the central bank.
More importantly under a UPND Government we would support local manufacturing and promote exports of value added products from Zambia focusing on the closer regional markets with the SADC, COMESA and East African Community market. It is time for seriousness in the running of our economy.
Together we can turn around this country.
God bless Zambia.
Hon Ambross Lufuma MP Kabompo east
Chairperson Finance and economy