Kwacha fluctuations hits hard on local business owners paying rentals in dollars

Kwacha fluctuations hits hard on local business owners paying rentals in dollars

The continued depreciation of the zambian kwacha against major convertible currencies like the dollar is having a huge impact on business owners who are paying rentals in dollars.

Some local business owners have bitterly complained on spending huge sums of money only on rentals due to the continued deprecating of the Kwacha.

Speaking in an exclusive interview with the Zambian Business Times – ZBT, Royal Park Platinum Chief Executive Officer Alexander Mumba Sakala said the rentals have now gone up due to the continued Kwacha depreciation.

Sakala explained that rentals have gone up to over 52,000 at one of his shops in Lusaka which is a significant increase from about K36, 000 when Kwacha was at K18 per dollar.

He said most of his business are now making huge losses but he is unable to shut them down because the shop owners require to be given a 6 months notice before the closure. “So I told my landlord at my shop at one of the malls that am closing because am making losses, but they refused saying they need a 6 months notice before the closure or I would not get my things if I close. So I have to operate for 6 months with losses.”

Sakala said, “on the other hand the government is increasing minimum wage everyday and on top of that i have to pay the workers, if an employee takes me to the labor office they won’t look at how much am making, either enough or not I just have to pay.”

He said renting at a mall is even more trick because you can not close the shop before six months notice to the mall management, which means you have to run for six months in loss.