By Kapya Kaoma
In Ballycountry, it is 10 hours, August 24, 2021! Soon, the Kwacha will appreciate from K21 to K10 to the US dollar at 14 hours, when the best economist and the most intelligent President will be sworn in. In Zambia, however, it is March 7, 2023, and like koswe, President HH is busy smelling for “dollars” abroad while the Kwacha is at 21 to $1, and counting.
Despite winning the annual global lying contest, he finally said the truth so loudly, “black mamba interest” under which international debt is contracted sniffle poor nations from getting out of debt. Which economist didn’t know that? Only a foster child of the IMF/World Bank was made to believe that his predecessor’s refusal to sign off to the evil IMF deal was due to incompetence! Now the once celebrated “economist” has to helplessly watch as the Kwacha falls into disarray.
I called President Hichilema very ignorant when he boasted that the Kwacha was the best performing currency against the U.S dollar in the world. He wrongly attributed it to his leadership, yet every economist knew that the U.S dollar was at its weakest due to the Pandemic, the Ukraine War, the cooling Chinese economy and other global factors that led and are still leading to fears of a global recession. Moreover, the price of copper was at its highest. Currently, copper prices are low and the global economy is uncertain. HH has nothing to do with how the Kwacha performs–another reason he cannot do anything to arrest its depreciation. He can only hope for the best!
The artificial rapid appreciation of the Kwacha was chiefly due to HH’s love affair with the IMF/World Bank–they saw him as a fool who would dance to whatever he was told by those capitalist vultures. But this love affair has already led to some headaches–like Lungu, HH has refused to follow Bretton Woods’ recommendations on restructuring the Chinese debt. Why? Because like his predecessors, the negative economic effects on Zambians will lead to political instability of untold magnitude capable of ending his political career before 2026. So how will he negotiate the economic territory in which he thrashed himself?
The Kwacha becomes the victim. Just as the Kwacha gained after the IMF long awaited deal came through (foolishly at a lower rate of less than K15 to $1), the same vultures have to withhold their dollars–weakening the Kwacha under the premise that the strong Kwacha harms investors. But Zambia has to pay its bills, pushing the Kwacha even further down. Another reason Zambian financial institutions have to fund capital projects like the roads–the debt limit cannot be lifted without restructuring the national debt. So harsh times are coming!
The Bretton Woods institutions and China have one goal–making maximum profits. HH’s endless “koswe” trips won’t stop the Kwacha’s free fall as long as copper prices are low, the Chinese and US economies are uncertain, the war in Ukraine continues and chiefly Zambia’s debt is not restructured. To be fair, HH cannot be blamed–these factors are beyond his reach. He doesn’t control the US or Chinese economy, the war in Ukraine or copper prices. Sadly, just as HH unfairly blamed Lungu when the Kwacha hit 20 and counting to a dollar, his opponents will blame him. Because he took credit for its appreciation, he and his cronies must equally take responsibility for the Kwacha’s depreciation–unfair as it is.
Is it not time we understood the answer to the stabilization of the Kwacha? We need to move from a consumption to a production economy. The engine of Zambia’s economic growth is ourselves. Sadly we are the most ignored. Farming, for example, is profitable–so why not invest heavily in farming? It is foolish to even argue about how many bags of fertilizers each peasant farmer should get–if fertilizers were made cheaper and readily available and agriculture moved beyond maize to include flowers, horticulture, poultry, and animal husbandry, Zambia would be in the better position to compete on the world market. If local companies were empowered to build roads and other big capital projects, our economy would become stable. Sadly, we only reward foreign investors! No wonder President HH and Mr. Musokotwane can defend giving the Chinese company 700 million dollar-loan to build and manage our road for 25 years–knowing too well that the lifetime of Zambian roads are between 10 to 15 years!
In Ballycountry, economists are only qualified to work with foreign investors!