Addressing Capital Flight and The Kwacha Conundrum
By Daimone Siulapwa
In exploring into the persistent struggle of the Kwacha against the US Dollar, a crucial overlooked aspect demanding our attention is the pervasive issue of capital flight and its profound repercussions on the Kwacha’s stability.
Primarily, the prevailing imbalance in our economy heavily favoring foreign interests poses a formidable obstacle to steering our economic trajectory.
The core of the Kwacha’s perpetual challenge against the US Dollar lies in the unbridled exodus of capital from our nation.
Monthly, substantial sums of dollars exit the country as profits for foreign-owned enterprises and illicit foreign business operators.
This drain on our economic resources perpetuates a cycle where a significant portion of the wealth generated within our borders benefits foreign entities rather than contributing to the growth and development of Zambia.
This predicament extends beyond well-known corporations such as Shoprite, Choppies, Pick & Pay, Spur, and myriad other foreign businesses saturating our malls and streets.
It encompasses the seemingly inconspicuous grocers, pubs, goat sellers, street vendors and traveling traders dealing in a spectrum of goods, such belts, sandals, carpets and more.
Hailing mostly from Tanzania, Burundi, Egypt, Zimbabwe and Kenya, these individuals operate without legal documentation, not only evading taxes but also silently repatriating profits in millions of dollars each month.
Moreover, the glaring reality that 80% of Zambia’s business economy is in foreign hands, with only 20% retained by locals, creates an imbalance that hampers our ability to shape and control our economic destiny.
This lopsided ownership structure creates an environment where decisions affecting our economy are often made by entities with interests misaligned with those of the nation.
With such a dangerous scenario, it goes without saying that every month, 80% of formal and legal businesses send their profits to safe havens outside the Zambia.
To break free from this economic bind, it is imperative to reverse the current scenario by implementing measures to empower local businesses.
A key strategy involves borrowing from successful models employed by countries like Botswana, China, America, and Russia.
These nations have recognized the importance of reserving certain businesses strictly for their citizens, thereby fostering a more balanced and self-sufficient economy.
Reserving specific industries exclusively for citizens is a pivotal strategy embraced by successful nations. This not only serves as an economic tactic but also ensures fairness and equal opportunities for local entrepreneurs.
The unrestrained competition with foreign enterprises, particularly those with large capital bases, places our citizens at a distinct disadvantage.
Policies aimed at reserving certain sectors for Zambian citizens foster local talent, incentivize entrepreneurship, and ensure that the majority economic benefits remain within the nation’s borders.
Botswana stands out as an exemplar in citizen empowerment initiatives. By strategically reserving key sectors for citizens, Botswana has forged a more inclusive and robust economy.
Zambia can draw inspiration from such success stories, tailoring policies to suit the unique needs and challenges of its economic landscape.
At the heart of the matter is the acknowledgment that as long as foreign entities exert considerable control over our economy, our nation’s journey will be fraught with challenges.
Achieving economic self-determination mandates a concerted effort to rebalance ownership structures; ensuring decisions concerning our economic future prioritize the interests of Zambians.
To propel the nation forward, policymakers must enact and rigorously enforce reforms promoting local ownership and economic empowerment.
These reforms should be crafted to gradually shift the ownership ratio, affording Zambian entrepreneurs an equitable chance to thrive in their own country.
This strategic approach aligns seamlessly with the advocacy for checks and balances, fostering a more equitable playing field for all citizens.
30.11.23
Daimone Siulapwa is the Editor-in-Chief of The Voice Newspaper. He is also a political analyst, an advocate for tribal unity and Citizen Economic Empowerment. Send your comments to dsiulapwa@gmail.com