09/11/2023
WHY IS THE KWACHA GOING SOUTH:
Let me make some suggestions to help our Kwacha gain confidence and value.
It is clear that the recent happenings in the nation have affected the atmosphere of the nation. As Zambians you are aware of what is happening in the political environment, agricultural environment and in a few other areas.
Let me highlight some of these issues:
1. The PF situation - We are aware of the turmoil situation in the PF Party which is the main opposition in the country. For the past two months there has been a lot of unrest within the PF party. The Miles Sampa acts and the consequent reaction from the other camp within the party have negatively affected the atmosphere in Zambia. The same also has dragged in the National Assembly compounding the situation further. The factions are all sending negative energies in the economic and diplomatic spheres.
2. The announcement by Mr Edgar Chagwa Lungu that he is back to active politics is also another major factor affecting the atmosphere. The economic environment is very sensitive to such energies being dispensed by influential people. The analysis of that announcement and it's impact is being extended or projected into coming years. The questions being asked and simulations being made right now by potential donors and investors are far impactful than we think. Investors take into considerations any actions being done now and extrapolate them into some few years from now and as a result decisions are made based on that.
3. The good works that the current government is doing such as the debt restructuring, Vedanta coming back, Mopani news, ZNS mealie Meal, Inputs, China Visit, Minerals, favourable relations, good governance and many others have been drowned by the noise of the above events.
4. RECOMMENDATION-
1) Government to increase the volume on the talk of the good things that it's doing. There should be more talk, discussions and strong focus on government programmes.
2. Government shouldn't be talking too much about happenings in PF. The more government talks about these issues the more it gives credence to the issues. The government will become the mouth- piece of these issues.
3. The announcement by the 6th President to come back to active politics is a person issue and the govt shouldn't pay much attention to it. Mr Lungu is like any other person and there should be no particular attention that should be given to the disadvantage of the nation.
4. Government should release more of the CDF monies for 2023 and increase spending at local level and people will have more money during the end of the year.
5. It is always known that the last quarter has increased demand for dollars because of holidays, bulk purchasing for the festive season, budget alignment and planning for next year. Many companies go into slow implementation and clearance. There is always very little excitement in the economic investment during this quarter. The current depreciation of the kwacha is not strange but something expected at all times during this quarter.
6. I believe also that the purchase of agricultural inputs also affected the demand for hard currency. But this is only a temporary situation.
Aluta continua government, all shall be well.