Harry Kalaba Schooled on Economics

Harry Kalaba Schooled on Economics

I refer to the article published by Hon Harry Kalaba on his facebook page in which he alleges that the UPND Government found the exchange rate at K15 per then raised it K30 and then drops it K20. He questions why this should be a source of celebration and praise for the UPND Government and President Hakainde Hichilema.

It is very clear that ba Kalaba doesn’t understand the macroeconomics at play or is deliberately misleading Zambians.

Firstly, the Exchange rates don’t move because of politics or slogans; they move because of macroeconomic fundamentals. The IMF Article IV assessments (Consultation) and 5th ECF review for Zambia in July 2025 are explicit; positive economic outlook despite drought-induced challenges, growth projected at 4% for 2024, rising to 5.8% in 2025 anchored on debt sustainability, strong reform performance, and necessary fiscal adjustments.

The Kwacha depreciation during the PF regime was driven by fiscal indiscipline: large fiscal deficits, unsustainable public debt, rising inflation, and collapsing confidence driven by debt default.

What Mr. Kalaba needs to understand is that what has changed is policy. The Bank of Zambia tightened monetary policy to anchor inflation expectations, inflation is now moderating, and that stabilizes the currency. Fiscal consolidation has reduced pressure on domestic financing, while debt restructuring and IMF engagement have restored credibility. As a result, Zambia’s gross foreign exchange reserves (Which stood at approximately US$1.2–1.5 billion in early 2021 to a record high of US$5.2 billion by October–December 2025).

This massive growth has been driven by economic reforms, debt restructuring, and increased export earnings, providing a stronger buffer for the kwacha hence economic growth is stabilizing from a stronger base.

Crucially, this restored confidence is visible in the market. The first quarter of 2026, Government bond auctions were oversubscribed, showing investors are willing to commit long-term capital at home. That does not happen in an economy people don’t trust.

That is why the kwacha is firmer today, driven in part by the new currency directives. This is not cosmetic, and it is not accidental. It is the textbook outcome of President Hakainde and the UPND Government’s disciplined macroeconomic adjustment, and deserve credit for restoring stability and credibility.

Fellow UPND members, this is a massive achievement by the UPND Government and President Hakainde Hichilema which should not be downplayed. We should all celebrate it and make sure every Zambian understands it.

Give President Hakainde Hichilema his flowers!

Davies Mike Sitali

PhD Scholar, Msc, MBA, BEcon, PgD

2026 Aspiring UPND Member of Parliament – Itezhi Tezhi