QUALITY OF BANK NOTES
There is currently a public outcry on the deteriorating quality of lower denomination notes to the extent that some businesses have stopped accepting these notes.
Currency printing is a very expensive exercise. Given the loss of purchasing power in our currency eroded by imported inflation due to the deteriorating Kwacha/ dollar exchange, it requires a re-think.
The velocity of lower denomination notes (speed at which these notes exchange hands) is very high in lower denomination notes. Market prices, for example, hover in the K2 to K50 range. This means that the frequency at which the lower denomination notes exchange hands has increased and consequently the poor quality of notes.
The Bank of Zambia should immediately take action whilst paying attention to the costs of the implications of currency printing.
We propose that the Bank of Zambia introduces K1, K2, K5, and K10 coins, which are more durable than notes. Equally remove Ngwee coins from circulation as they are valueless. All pricing should move to Kwacha only. For example, instead of pricing at K20.80 for an item, the same can just be priced at K21. In any event, currently, most people just leave the ngwee coins on shop teller counters as they have no value.
Also, the Bank of Zambia should introduce K200 notes targeted at ATM withdrawals. This way, people can withdraw meaningful amounts at the ATM than currently is the case. As I speak, a number of ATMs are out of currency and out of order as a result because they empty quicker with the highest denomination of K100. This will also minimise ATM re-stocking costs for banks who outsource ATM cash re-stocking to security companies.
Surely, this is a simple and straightforward matter that does not require rocket science.
The Bank of Zambia has currency models that help them assess currency velocity and assist with determining the need for the introduction of higher denominated notes. Others may argue that this will increase inflation, but the question is: how?
In UAE, the highest denomination is 1,000, in South Africa it’s R200, Euros it’s 500, and so on and so forth.
Come on, let’s stop inconveniencing over burdened citizens and act now. If you recall, we did propose to the Bank of Zambia to introduce a facility to support businesses against the effects of load shedding and drought. Again, they procrastinated for a long time before adopting what we had proposed.
Please urgently address this notes dilemma. Actually, do it now so that there is no currency printing in an election year. Note that UPND was the loudest in 2021, accusing PF of changing BoZ Governors to print election money. We don’t want a repeat of this in 2026.
ACT NOW IS OUR CALL!
Fred M’membe
President of the Socialist Party
Lower value denominations such as K2, K5, K10 and K20 have a high turnover rate. it’s these denominations which are mostly used by almost everyone and serve as CHANGE. Much of these denominations remain and circulate in Markets and bus Stops were theres a poor culture of handling money resulting in much of it being soiled and multilated. The simple solution to this is to use E- money such as mobile money for transactions.. This is easier to handle , cheaper on the Central Bank and quicker to transact without need for CHANGE.
Aba nabo, kaleza na mpefu baza commentapo
On this one Fred may be right
Fred is not right unless you’re only looking at it in the same angle; now listen to this.
Psychologically since 1964 we all regard paper money as having high purchasing power and coins as smallest denomination for lowest value items or service.
To day even if the quality of paper is poor K2,K5, K10 has got a slot in high currency value in shops and markets we don’t give this currecy to Kids. But we can give K1 coin to kids for sweets, jiggies..etc and that’s how we value it.
Haven’t you notice: you can have a paper K2 BUT not comfortable to give it to a child SURPRISINGLY you can give out K2 coins freely.
To day you can buy a coca-cola in K10.
I can assure you IMMEDIATELY you change it to a K10 COIN just be rest assured that even its current value is GOES down!
A long time notion of coins being smallest denomination and value.
This will have a spiral effect on pricing of commodities: Currently a K1 coin can buy 3-4 sweets it will go to K5 coin for 3-4 Sweets. Bunch of musalu at K10 coun…..
Let’s no rush to changing of our currency in that Fred M’membe suggestion. Better maintain it as it is now BUT improving in the quality of paper.
I remember the Plastic like paper money in Chiluba/Mwanawasa time. That was good quality I don’t know why it was phased out.
But I TOTALLY agree with M’membe on the introduction of K200 note.
I have often wondered why can’t BOZ sensitive the masses to stop this culture of poor handling of money. People have no respect for money in Zambia, they just squash notes. We’re very careless and untidy. Notes are supposed to be stashed in straight order and this makes our notes last longer as well. The same people will never squash dollars but have no respect for kwacha. It costs BOZ more because they have to print new notes often. Please let BOZ sensitive the masses on how to handle our bank notes, we’re extremely untidy. Some of these notes look pathetic to go through in our hands. Thanks Fred for the highlight, kudos to you.
Squashing money in Vitenge, in markets that is the problem. I used to see that with my mother MHSRIEP, but at the time it was fashionable maybe. In SA you hardly an old R10 indeed R20 notes, why? the reason is they don’t squash money in Vitenge.
Very correct Bro’ we ain’t handling the paper money properly. Those privileged to have traveled abroad eg to the UK the rule across is DON’T FOLD THE POUND! So people have purses.
Here at home some marketeers even sprinkle spiritual water on the paper money and hide it under a dirty rug to avoid Tumbuma (invisible spiritual beings) stealing it.
We need education on public media on how to keep paper money.
Am sure We can manage keep it clean.