A Critical Look at Zambia’s Currency Reform: Economic Impact and Political Implications
Zambia’s recent currency reform, which introduced high-denomination notes such as the 200 kwacha and 500 kwacha bills, as well as new 5 ngwee and 10 ngwee coins, has raised deep concerns about its real economic and political implications. While currency reforms are often hailed as a necessary step to combat inflation and simplify transactions, the true motivations behind these changes and their impact on Zambia’s most vulnerable citizens demand closer scrutiny.
One of the most pressing concerns surrounding the introduction of high-denomination notes is the negative impact this change will have on the poorest citizens. While the new 5 ngwee and 10 ngwee coins provide some relief, the reality is that for many low-income consumers, these large denominations represent a significant setback.
Many of Zambia’s poorest people rely on smaller currency values for everyday purchases. The introduction of high-denomination bills creates an illusion of financial stability, but it exacerbates inequality and increases the burden on those who already struggle to make ends meet.
The timing of these reforms, particularly the 200 kwacha and 500 kwacha bills, raises suspicion that they may serve a political agenda. Critics argue that the introduction of these high-value notes is less about resolving economic challenges and more about facilitating political manipulation in the lead-up to the 2026 elections. By distributing cash through large, easy-to-handle bills, political operatives can more efficiently engage in vote-buying—a practice seen repeatedly in Zambia’s near past by-elections.
Rather than addressing Zambia’s deeper economic problems, the new bills appear to be designed to make the distribution of cash during elections smoother and more effective. Instead of carrying bags of smaller bills, politicians can now hand out higher-value notes, creating an illusion of generosity. The 2026 elections are fast approaching, and this reform could serve as a tool to secure votes at the expense of long-term economic stability.
The UPND on their facebook page on the currency reforms argue that the nominal value of currency is irrelevant to its actual purchasing power, pointing to the euro as an example. However, this comparison is misleading. While the euro, like the kwacha, is a high-value currency, the fundamental difference lies in the underlying strength of the economies backing these currencies. The euro is tied to a highly developed, diversified economic system with robust industries, high levels of trade, and stable financial policies. In contrast, Zambia’s currency is driven by a struggling economy marked by inflation, fiscal mismanagement, and over-reliance on external debt.
The real value of any currency is determined by the economic activity it represents, not just its nominal value. The euro does not have bread priced at 50 euros because the underlying economic activity supports its value. Without similarly stable economic activity, Zambia’s introduction of higher-denomination notes will do little more than mask the true economic challenges facing the country.
The introduction of these new currency notes does little to address Zambia’s broader economic crisis. While they may facilitate larger transactions in the short term, they fail to tackle the root causes of Zambia’s inflation—namely, fiscal mismanagement, a volatile exchange rate, and an over-reliance on external debt. Inflation continues to be a pressing issue, and introducing new currency will only offer a temporary, superficial fix.
Without comprehensive economic reforms focused on stabilizing the economy, controlling inflation, and addressing Zambia’s long-standing issues, these new bills will likely lose value just as quickly as their predecessors. What Zambia needs is a long-term economic strategy, not the temporary distractions offered by new currency notes. Simply printing more money does nothing to solve the systemic issues that have undermined the country’s economic stability.
The government has justified these reforms by claiming that previous officials hoarded large sums of money, necessitating the introduction of new notes to “clean up” the economy. However, the Auditor General’s reports from the past three years have failed to provide substantial evidence of such hoarding. Despite repeated claims from the government, no concrete proof of large-scale hoarding has been presented, and no investigations or efforts to recover these alleged funds have been initiated.
In fact, the Auditor General’s reports have highlighted a series of unexplained financial dealings over the past three years. Despite these red flags, no arrests have been made, and no explanations have been forthcoming. This raises serious doubts about the true motives behind these currency reforms. Are these changes intended to stabilize Zambia’s economy, or are they simply a means of deflecting attention from deeper problems such as corruption and fiscal mismanagement?
The business of printing money is undeniably lucrative. Currency contracts are typically awarded to a select few firms, and there has been minimal transparency regarding who stands to benefit from the production of these new notes. Given the lack of clear answers, many Zambians are left wondering: who exactly is profiting from these reforms? Is this move truly in the best interest of the country, or are a select few individuals or companies enriching themselves at the expense of the public?
The lack of transparency surrounding the printing of money only fuels the suspicion that these currency reforms are more about benefiting those in power than addressing the country’s economic challenges. Without clear accountability, the public is left to question whether the benefits of these reforms are truly being felt by the people who need them most.
While the introduction of high-denomination notes and smaller coins like the 5 ngwee and 10 ngwee may offer practical benefits in some cases, they raise serious concerns about the broader economic impact and the true intentions behind these changes. For Zambia’s poorest citizens, these currency reforms will likely increase the cost of living, further deepening the economic divide.
The government’s failure to address structural issues such as inflation, fiscal mismanagement, and corruption in its broader economic policy makes these reforms feel like little more than a distraction. The timing of these changes—just ahead of the 2026 elections—only strengthens the suspicion that they are politically motivated.
If the government is genuinely committed to improving the lives of Zambia’s citizens, it must take a comprehensive, long-term approach to addressing the country’s economic instability. These reforms, without meaningful economic action, will not solve Zambia’s problems—they will merely deepen them. Ultimately, Zambia’s leaders must be held accountable for the consequences of these decisions. If these currency changes are truly in the public’s best interest, they must be accompanied by real, long-term solutions aimed at stabilizing the economy, reducing inflation, and protecting the most vulnerable members of society. Without this, Zambia risks repeating the same mistakes of the past, benefiting only a select few at the expense of the wider population.
Ephraim Shakafuswa
Tonse Alliance Council of Leaders – Member