Government refutes reports of introducing exchange controls to arrest the Kwacha slide

Government has said that it has received reports that some unscrupulous persons are taking advantage of recent challenges in the local foreign exchange market to spread false information implying that exchange controls are about to be re-introduced in Zambia and that foreign currency accounts held in our banking system will be converted into Kwacha.

In a statement released to the media, the Minister of Finance Mrs Margaret D. Mwanakatwe said that these insinuations don not represent the longstanding policy of the Government of the Republic of Zambia and she assured local and foreign investors, businesses, and the general public that not introduce foreign exchange controls

Below is the full statement

WE WILL NOT RE-INTRODUCE EXCHANGE CONTROLS

LUSAKA, 20th MAY, 2019

The Government has received reports that some unscrupulous persons are taking advantage of recent challenges in the local foreign exchange market to spread false information implying that exchange controls are about to be re-introduced in Zambia and that foreign currency accounts held in our banking system will be converted into Kwacha.

I want to state that these insinuations DO NOT REPRESENT the longstanding policy of the Government of the Republic of Zambia. In addition, I wish to assure both local and foreign investors, businesses, and the general public and categorically state that *THE GOVERNMENT IS NOT ABOUT TO AND WILL NOT RE-INTRODUCE EXCHANGE CONTROLS.* To the contrary, the Government remains committed to maintaining the current flexible exchange rate regime.

Looking back to the 1980s and 1990s, the nation will recall the painful experience that Zambia endured due to exchange controls after which we resolved as a country to do away with exchange controls as they did not resolve the underlying challenges faced by the economy then, but made things worse.

Diversification of the economy, particularly the export sector, is one way of strengthening our domestic and external sector performance, sustainably. In this regard, the Government, through the revised 7th National Development Plan and the Economic Stabilisation and Growth Programme, has developed a robust framework aimed at addressing the challenges faced by the economy and meeting the aspirations of our people. As Government, we are committed to implementing these programmes and the current challenges the economy faces make this task even more compelling.

Further, it is also important to note that the Bank of Zambia manages the Government’s exchange rate policy in the context of its overall objective of maintaining price and financial system stability. The Bank of Zambia will hold its quarterly monetary policy meeting this week and will be having a media briefing on Wednesday May 22, 2019. A detailed assessment of recent developments in the foreign exchange market as well as monetary policy developments will then be provided to members of the public at that time.

I take this opportunity to appeal to my fellow citizens and friends of Zambia to be on high alert and help curb mis-information. The practice harms the less privileged due to the propensity of falsehoods to impair the social-economic progress of the country.

Issued by:

Margaret D. Mwanakatwe, MP, MCC

MINISTER OF FINANCE