Kwacha Fall Sparks Debate

The kwacha last week depreciated to an unprecendented low of K16 to the dollar, making it the worst-performing African currency.

The fall has been blamed on the coronavirus outbreak, according to Vice President Inonge Wina. However, Zambia is one of a few countries in the region not to have recorded cases as of yet suggesting other factors are also at play.

In response to Wina’s claims UPND leader Hakainde Hichilema has called on government to stop playing the blame game and recognise that it has failed to manage the country’s economy.

According to media outlet News Diggers Hichilema has stated the following:

“Madam Inonge Wina is not being truthful in her responses, she knows that the depreciation of the kwacha is due to PF’s poor economic management and shortage of leadership overall. The Kwacha is not depreciating because of coronavirus. When did this coronavirus come anyway? The disease only broke out a few weeks ago, so what has it got to do with all the challenges that this country has been going through, the depreciation of the Kwacha inclusive? Evidence is clearly in abundance that PF has failed! The Kwacha had already depreciated to K14 to US$1 long before the advent of the virus.”

Former commerce minister Robert Sichinga has also questioned government’s reasoning.

“They are offering excuses as though it is someone else’s responsibility to ensure that Zambia’s copper price remains the same. How about before coronavirus, was the exchange rate no dropping? How does she explain that one? How does the Vice President explain the fact that the falling of the Kwacha value did not just start when coronavirus came on the scene?” Sichinga is quoted as stating.

In her address to Parliament last week the Vice President set out some of the measures being taken to try and stabilize the Kwacha stating,

“Mr Speaker, under this stress of the Kwacha, the Bank of Zambia is taking some measures so that the Kwacha can stabilize. These measures include; increasing the statutory reserve ratio and shifting compliance of the statutory reserve requirements to daily from weekly. So measures are being taken, and I have said before in the house that we need as a country to be a net exporter instead of being a net importer. Otherwise, our Kwacha will continue to be affected negatively.”