Zambian Economy Faces Risk of Collapse as Kwacha Continues to Weaken
The stability of the Kwacha has become a focal point of worry, with experts warning that if not addressed promptly, it could lead to a significant economic downturn.
The nation is grappling with a precarious situation where market confidence is teetering, and sentiments are urgently needed to bolster economic stability.
The critical issue at hand is the performance of the Kwacha, which has been experiencing a continuous loss of nearly 10% each business day, according to economic analyst Mr. Kelvin Chisanga.
Mr. Chisanga attributes a substantial part of the Kwacha’s decline to the activities of an offshore auction taking place in London. In this parallel trading pattern, the Kwacha is trading at higher margins compared to its performance in the local market.
This discrepancy has led to a reduction in the healthy inflow of US Dollars into the local market, exacerbating the currency’s depreciation.
Expressing concern over the situation, Mr. Chisanga emphasized the need for the central government to address this critical matter with a strong voice.
He highlighted the potential risks associated with a lack of decisive action, pointing out that if left unattended, the forex rate could surpass K30 per unit of US Dollars, further jeopardizing the economic landscape.
To avert a potential economic crisis, Mr. Chisanga called for clear and determined engagement from key economic stakeholders. He stressed the importance of implementing appropriate policy measures to prevent a loss of market confidence and to sustain key economic fundamentals.
The urgency of the situation underscores the need for proactive measures to stabilize the Kwacha and restore market confidence. The Zambian government and relevant economic stakeholders are now under pressure to collaboratively address the issues at play and implement strategic interventions to safeguard the nation’s economic health.
The coming days will be crucial in determining whether the Zambian economy can weather the storm and regain its footing in the face of these challenges.
