The Kwacha Chronicles: Embracing the Reality of Currency and Economic Growth
By Dr Lawrence Mwelwa
In the ever-changing landscape of economic fluctuations, the Zambian kwacha occasionally steals the spotlight, experiencing a sudden surge in value that sparks excitement and hope. Social media buzzes with jubilant chatter, and citizens dare to dream of a brighter economic future. But amidst this momentary euphoria, it is crucial to take a step back and question whether this upward shift truly signifies meaningful change.
Let us resist being carried away by temporary measures and artificial interventions. Recent actions taken by the Bank of Zambia, such as an increase in the Monetary Policy Rate and the offloading of foreign reserves, may have temporarily boosted the kwacha’s strength. While these actions may bring a sense of optimism, we must remember that they are merely temporary fixes addressing the symptoms, not the root causes, of our economic challenges.
To achieve lasting progress, we must tackle the structural deficiencies that have hindered us for too long. Relying on quick fixes is akin to constructing sandcastles in the air, vulnerable to collapse at the slightest gust of wind. What we need are enduring solutions, based on a comprehensive and strategic approach.
Our primary focus should be on nurturing and supporting our industries, fostering a vibrant and resilient export sector. By encouraging the production of high-quality goods that can compete on the global stage, we can create value in our exports and generate the foreign currency inflows necessary to stabilize our currency’s strength.
Celebrating a temporary appreciation of the kwacha is akin to rejoicing in a passing breeze—fleeting and unpredictable. We must resist the temptation of complacency and acknowledge that without substantial changes to our economic structure, we will always be at the mercy of external forces.
As citizens, we must not be blinded by transient victories. It is our responsibility to hold our leaders accountable, demanding long-term, sustainable measures that address the underlying issues with steadfast determination. Let us look beyond the illusion of momentary success and work towards creating an economy that can withstand any storm—a future where the appreciation of our currency is a testament to our collective resilience and progress.
However, it is important to acknowledge the limitations of currency appreciation. While it may create positive sentiment, it does not immediately result in reduced prices of goods and services in the market. Nor does it guarantee instant liquidity for individuals to spend on essential items. The cost of food remains a challenge, and poverty continues to plague a significant portion of our population.
In conclusion, let us not be blinded by the fleeting allure of a temporarily strengthening kwacha. Instead, let us focus on the task at hand—implementing lasting economic transformation. By doing so, we can build an economy that is resilient, independent of external fluctuations, and truly beneficial to all.