Economic Concerns as Kwacha Faces Notable Depreciation
The recent losses in the Kwacha have become a significant indicator of the nation’s financial health, according to an economic analyst.
Forex markets, often considered the lens through which a country’s economic conditions are scrutinized, have played a pivotal role in highlighting the challenges faced by Zambia.
Economic Analyst Mr. Kelvin Chisanga emphasized the clarity provided by Forex markets, asserting that they offer a transparent view of a country’s financial position.
The economic expert warned against manipulating economic narratives, stating that such actions would inevitably be exposed by the fundamental indicators of the exchange market.
Mr. Chisanga noted that the fluctuations in the exchange rate were clear signals pointing towards the necessity for Zambia to diversify its export base.
To bolster the economy, he recommended an expansion of the export basket, urging a focus on critical essentials.
This expansion could include non-traditional exports such as honey, sugar, cement, and processed maize grains.
The economic expert further stressed the importance of reducing unnecessary imports, particularly of direct consumables.
Instead, he advocated for encouraging the importation of intermediate goods and fostering investments that empower local producers.
Building the capacity of local producers, according to Mr. Chisanga, would contribute significantly to the nation’s economic resilience.
Over the past weeks, Zambia has witnessed a rapid depreciation of the Kwacha, attributed to the dwindling US dollar, which remains in high demand against limited market supplies.
Mr. Chisanga highlighted the urgency for positive interventions to mitigate the effects of depreciation in the short to medium term.
One such measure is the Export Proceeds Tracking Framework, believed to be a specialized mechanism for harvesting dollars into the country. This framework aims to serve as a robust pipeline for inflows of dollars into the local market.
However, Mr. Chisanga emphasized the need for well-defined and flexible policy reviews, coupled with a clear timeframe, to ensure that the positive impacts of these measures translate into tangible economic benefits for Zambia.
In conclusion, the economic expert stressed the importance of implementing conversional methods and establishing policies that positively impact the Kwacha.
He expressed hope that these measures would not only stabilize the currency but also contribute to the overall economic prosperity of Zambia.
