Economic Expert Highlights Challenges Facing Zambia’s Kwacha, Proposes Stabilization Measures
Zambia’s domestic currency, the Kwacha, is experiencing a tumultuous period driven by a synchronous set of factors, according to economic insights from Mr. Kelvin Chisanga, a respected economic expert.
He proposes strategic measures to address the challenges and stabilize the Kwacha’s performance.
A key recommendation from Mr. Chisanga is to halt offshore auctions within the mining sector.
He argues that discontinuing these auctions would allow for a buildup of Dollar stock in the domestic market, potentially alleviating the pressure on the Kwacha.
The expert emphasizes the need for a comprehensive approach to managing the currency’s volatility.
Additionally, Mr. Chisanga underscores the importance of strategic planning for the annual purchases that typically occur between September and December each year.
This period witnesses a lower supply of US Dollars against the heightened demand, contributing to the current challenges.
Addressing this trend through thoughtful planning could help mitigate spillover effects into the following year.
The economic expert also points out the impact of health challenges, particularly the ongoing cholera situation in the country, on the economy.
These health crises, along with other challenges, have made a significant dent in economic performance, adding another layer of complexity to the Kwacha’s struggles.
The root cause of the Kwacha’s southward trading, as highlighted by Mr. Chisanga, is the low production from key sectors in the previous year.
This has resulted in reduced trade patterns, leading to a diminished supply of US Dollars on the market. Coupled with high demands and a lackluster export basket, the Kwacha finds itself facing a challenging economic environment.
As Zambia grapples with these multifaceted issues, stakeholders are closely watching for potential policy interventions and economic strategies to stabilize the Kwacha and foster a more resilient economic landscape.
Mr. Chisanga’s insights provide a roadmap for policymakers to consider as they navigate the complexities of the current economic situation.
