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Zambian kwacha runs away from the calculator

Filed under: Business,Latest News |
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The Zambian Kwacha has continued to run away from President Hakainde Hichilema ‘the calculator boy.’

When he first came into office, President Hichilema was ridiculed by skeptics who called him, “the calculator boy,” for his strong focus on the economy and his background as an accountant.

Historically, the Zambian Kwacha has reached an all time high of 23.9 against 1 United States Dollars according to indicative exchange rate by ZANACO on 28 November, 2023 under the same leadership.

President Hichilema in Opposition promised to reduce fuel prices by K4 and to make sure the Kwacha is K10 against 1 United States Dollars by 14 hours once he is sworn in at 10:00 hours.

It is now 2 years and 3 months of the United Party for National Development (UPND) under the leadership of President Hichilema being in power but things promised to be reduced seem to be increasing including a 25 kilograms (kg) of Mealie Meal which was promised to be selling at K50 each.

Under his leadership, Zambians have seen the cost of living skyrocketing. Recently, there was an introduction of Zambia National Service (ZNS) Mealie Meal which is selling at K230 and K190 per 50 kg of Breakfast and Roller Meal respectively.

Despite the ZNS Mealie Meal, the cost of living is still high because that is not what Zambian people expect from an economist and a Chief Marketer like President Hichilema.

And the annual inflation rate which had seen single digit after President Hichilema came to power has rose for the fourth straight month to 12.6% in October 2023, the highest since March 2022, up from September’s 12%, largely due to the ongoing depreciation of the kwacha.

The currency’s value has been negatively impacted by a scarcity of dollars, which can be attributed to reduced mining production and declining metal prices, while the costs of fuel imports have been on the rise.

As a result, prices climbed further for both food (13.6% vs 13.4% in September) and non-food items (11.3% vs 10.1%). On a monthly basis, consumer prices increased by 0.8% in October, after rising by 0.7% in the prior month.

Meanwhile, the Petrol is now selling at K 29.98 ngwee from K29. 42 per litre , while Diesel is now at K 29.96 ngwee per litre from K26. 88 ngwee per litre.

According the research, the results suggest that foreign exchange demand increases during drought episodes and thereby contribute to the currency depreciation.

The increase in foreign exchange demand coincides with a rise in foreign currency deposit liabilities in commercial banks alongside the increase in the banks’ net foreign assets.

Zambia’s kwacha extended its gains versus the dollar, making it the world’s best-performing currency under the leadership of President Hichilema in 2021.

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