HICHILEMA’S FOREIGN RESERVES RECORD QUESTIONED: COMPOSITION AND SOURCES STILL UNCLEAR

HICHILEMA’S FOREIGN RESERVES RECORD QUESTIONED: COMPOSITION AND SOURCES STILL UNCLEAR

Claims that Zambia has recorded its highest-ever foreign reserves of approximately US$6.47 billion under President Hakainde Hichilema have sparked fresh debate, with the Liberal Democrats Party raising concerns over the composition and sources of the reported figure.

Liberal Democrats Party Vice President Gerald Mwanza has questioned whether the headline reserve figure gives citizens a full and accurate picture of the country’s external financial position, arguing that the numbers must be broken down to ensure transparency and proper public understanding.

Mr. Mwanza said foreign reserves are often misunderstood as simple cash holdings, when in fact they consist of multiple financial instruments and assets.

“Foreign reserves are not simply cash sitting in a bank account. They can include foreign currency deposits, gold reserves, IMF Special Drawing Rights (SDRs), foreign securities and investments, Zambia’s reserve position at the IMF, and interest earned on reserve assets,” he said.

He argued that without a clear breakdown of how Zambia’s US$6.47 billion is structured, it becomes difficult for citizens to assess the real strength and sustainability of the reserves being reported.

According to Mr.  Mwanza, key unanswered questions include how much of the reserves are in liquid foreign currency, how much is held in gold, what proportion comes from IMF allocations, and what role debt restructuring and external financial arrangements may have played in boosting the figure.

He further noted that while increased reserves are generally a positive macroeconomic indicator, they should not automatically be interpreted as evidence of improved living standards.

“Debt restructuring, IMF engagement and improved confidence can all contribute to higher reserves. These are legitimate factors, but they are different from reserves generated directly through domestic production and exports,” Mwanza said.

Economic observers also echo similar concerns, noting that foreign reserves alone do not directly translate into reduced cost of living, increased employment, or lower prices of essential commodities in the economy of Zambia.

Mr.Mwanza stressed that the debate should not focus only on whether reserves have reached a record level, but rather on how they were accumulated and what impact they are having on ordinary citizens.

“The real discussion should not simply be who left the highest reserves. The real discussion should be how those reserves were accumulated, what is their composition, and how have they improved the lives of ordinary Zambians,” he said.