ANDD DESCRIBES THE BANK OF ZAMBIA’S INTERVENTION TO STABILIZE KWACHA AS COSMETIC, UNSUSTAINABLE
…..it is not supported by production and Forex generation through trade and commerce.
Lusaka… Tuesday February 20, 2024 (SMART EAGLES)
The Advocates for National Development and Democracy (ANDD), strongly feels that the injection of US$50 Million into the country’s economy aimed at stabilising the local currency is unsustainable.
ANDD Executive Director Samuel Banda says the current appreciation of the Kwacha following the Central Bank’s interventions is cosmetic and not sustainable because it is not supported by production and Forex generation through trade and commerce.
Mr Banda maintains that it is an open secret that economic fundamentals that can undoubtedly trigger a bullish Kwacha performance against the US Dollar and other currencies are not in place.
“For example, Zambia being a mining – dependent country, will require a robust and viable mining sector that can help increase copper production to warrant a stable Gross Domestic Product (GDP), and a more predictable exchange rate,” he said.
“Since Mining remains our key economic driver and pillar of economic national development, the Government should ensure our strategic mining giant Konkola Copper Mine (KCM), starts operating optimally to increase copper production output and increase export volumes to generate huge Forex to effectively stabilize the exchange rate sustainably.”
He strongly recommended that the Government take advantage of Vedanta’s Resources investment commitment of over US$1 Billion for mining recapitalization and development, and expedite the KCM Vedanta legal transition process so that Konkola Copper Mine begin to operate optimally.
“Mopani Mines whose equity partner has already been engaged with International Resources should also operate at full capacity for the economy to respond positively. Other interventions that we feel can help the country’s economy to stabilize, are through viable agriculture and manufacturing sectors,” he added.
“These two key and integral sectors can increase food production both for local consumption and for trade and equally attract foreign exchange, which if injected into the economy, would yield sustainable and long-term economic benefits. We strongly believe that unless these interventions are actualized, the Kwacha will continue to depreciate to the detriment of the economy and ultimately affect people’s lives through an increase in commodity prices.”
Mr Banda said this volatility in the exchange rate impacts the economy negatively, making it difficult for business entities to plan as it raises the cost of doing business, and also shrinks our domestic economy and business environment.
“We therefore appeal to the Government to start implementing sound, sustainable and predictable economic policies that will stabilize the exchange rate and reduce the cost of doing business, to promote commerce, trade and socio-economic growth,” he concluded.