EDITORIAL: RESERVES, REALITY AND THE LESSONS STILL NOT LEARNT
At a rally in Nyimba yesterday, Tonse Alliance leader and NRDUP presidential candidate, Brian Mundubile attacked President Hakainde Hichilema for building up Zambia’s foreign exchange reserves, suggesting these national buffers should instead be drawn down to cover localised payment delays for council workers, suppliers and farmers. It revealed how little has been learned from the economic situation left behind in 2021, under a government in which Mundubile served.
Hardship at the market stall is real, and the UPND government has been candid about their desire to continue to fight the cost of living. But Mundubile’s comments simply treat reserves as a fund waiting to be raided, and in doing so betrayed a misunderstanding of what reserves are actually for.
Foreign reserves are a country’s emergency savings account, held mainly in dollars and other foreign currencies. They pay for critical imports such as fuel, medicine, fertiliser and machinery. They allow the Bank of Zambia to defend the Kwacha when it comes under pressure, selling dollars to steady a falling currency. They service external debt so the country can meet its obligations on time. And they signal to investors that Zambia is a safe place to do business, which lowers borrowing costs and supports the very jobs Mundubile claims to champion. As Professor Lubinda Haabazoka puts it, a sensible benchmark is enough reserves to cover at least three months of imports; the stronger that cushion, the better a nation can weather economic storms.
In other words, the things Mundubile says he cares about, stable prices, affordable fuel, available medicine, depend directly on the buffer he dismisses. Emptying that vault to smooth over short-term bottlenecks would be the fiscal equivalent of a household burning its own roof beams to stay warm for one night. The likely result would be a weaker currency, higher import costs and renewed inflation, hitting hardest the farmers and workers he claims to defend.
This is what makes the remarks more than a careless slip. They offer a window into exactly the thinking that drove Zambia into trouble in the first place. Under the same instincts Mundubile now champions, the previous government piled on unsustainable debt and watched the Kwacha slide. The hardship he invokes so freely was, in no small part, manufactured on his own side’s watch.
Opposition figures associated with the previous administration want to shed their reputation as architects of debt and default. Yet every time a senior figure mocks fiscal discipline as elite vanity, it confirms the very caricature it is trying to escape. You cannot rebrand as serious economic managers while treating the foundations of recovery as a joke. Lower inflation and rising reserves are not numbers to be sneered at. They are proof that Zambia is, at last, moving in the right direction.
Good analysis !!