THE KWACHA TO TRADE AT K10 PER DOLLAR BY DECEMBER 2022- HAABAZOKA
The Zambian kwacha is expected to strengthen against the US dollar going into 2022. My forecast is that if we receive normal rainfalls and that we manage to hold debt repayments at least up to December next year, the kwacha can easily trade at K10 per dollar by December 2022.
If this forecast is accurate, there will be no need to adjust fuel prices and electricity tariffs since automatically these will be cost reflective in dollar terms.
Major factors I attribute to the strengthening of the kwacha include the $1.3bn SDR currently sitting in the reserves (Reserves stand at $2.9bn), high copper prices currently above $10,000 and good will from western capital that had previously starved the country of forex due to the previous government’s stance on gay rights, mining taxation and a purported leaning towards the east.
It should however be noted that unless measures are put in place to create wealth among citizens, very little trickle down effect will reach the unemployed economically active citizens.
Zambia faces possible droughts and as such government should already start planning food and energy security.
Lubinda Haabazoka
