BOZ’s Currency Agenda a Step Forward, but Demonetization Process Rushed – Economic Analyst
The Bank of Zambia (BOZ) has announced its plan to introduce higher denomination banknotes, including K200 and K500 bills, in a move aimed at addressing transaction challenges and reducing printing costs. While economic analyst Kelvin Chisanga supports the initiative, he has raised concerns over the rapid implementation of the demonetization process.
Chisanga noted that Zambia has faced difficulties with the circulation of lower-denomination banknotes, leading to inefficiencies in transactions and change shortages. He emphasized that introducing higher denominations would help suppress printing costs while addressing inflation-driven concerns.
However, he stressed that broader consultation with key stakeholders should have been conducted before rolling out the plan.
“The market has been struggling with small notes to complete transaction cycles due to change shortages. While the introduction of bigger banknotes is an excellent idea, a wider consultation process was needed before implementation,” Chisanga said.
He further linked the move to Zambia’s ongoing adoption of financial technology (FinTech), arguing that digital transactions should complement currency adjustments. Since the launch of the national switch in 2014, Zambia has witnessed significant investment in financial technology, which has driven a positive economic trajectory.
Despite these developments, Chisanga believes Zambia’s biggest challenge is not a money supply issue but a production deficit. He urged authorities to prioritize production-driven policies, economic pressure control, and investments in mineral resources and energy security.
He also called for enhanced support for small-scale miners and non-traditional exports to expand Zambia’s trade capacity.
“As we head toward an election year, we should focus on boosting production, managing economic pressures from external forces, and increasing value addition in agriculture and other key sectors,” he added.
With Zambia’s economy facing inflationary pressures and shifting global dynamics, the success of BOZ’s currency agenda will depend on strategic economic planning and continued investment in sustainable growth measures.
