Kwacha appreciation with no tangible benefit to Zambians

The recent appreciation of the Zambian Kwacha has generated considerable optimism within the economy and among ordinary citizens alike.

The local currently has appreciated from the highs of around K28 to K23.8 against US$1.

However, it is crucial to recognise that currency appreciation should not merely be a headline or a talking show; rather, it must serve as a catalyst for improving the daily lives of Zambians. 

For too long, the weakened Kwacha has brought devastating implications, leading to high inflation and the price of goods in the country, generally the highest cost of living ever to visit Zambians from time immemorial. An appreciating Kwacha must therefore have the potential to lower the cost of goods and services, reduce transportation and manufacturing costs, and ultimately lead to lower commodity prices for consumers, and lower cost of living generally. These benefits should manifest in tangible ways: reduced prices for essential commodities such as mealie meal, further and more meaningful reduction in fuel pump price, and overall easing of the financial burden on households.

Unfortunately, our Kwacha appreciation is celebrated without translating into actual economic relief for the ordinary Zambians who toil day and night amid the ever escalating prices of goods and services, leading some to question whether the appreciation is real or cosmetic! It is such disconnect that breeds scepticism and frustration, as citizens do not see the promised benefits reflected in their day-to-day expenses. It seems at the policy level, there’s no critical thinking and prioritisation to see to it that the Kwacha strength translates into lower prices for essential goods and services. This includes strengthening supply chains, controlling inflation, and maintaining transparent communication about economic fundamentals being put in place.

The irony in this country is that our people celebrate mediocrity and trivialise critical thinking and expectations. 

We say this because we don’t see the government and financial institutions working together to ensure that the benefits of a stronger Kwacha are passed on directly to the people – through reduced fuel prices, stable food prices, and affordable basic goods! 

It is clear among many Zambians who follow our currency appreciation to know that it is driven by speculative activities or short-term capital flows rather than fundamental improvements in economic productivity – thus making its impact on local prices limited. We are also alive to the fact that without addressing critical economic aspects such as diversifying the economy, stabilising inflation, and implementing prudent fiscal policies – Kwacha appreciation will remain as good as useless as and the benefits of it will remain elusive for most citizens. 

In essence, for the Kwacha appreciation to meaningfully benefit the ordinary Zambians; lower the cost of living, it must be part of a comprehensive economic strategy that tackles the root causes of inflation and economic instability. Until then, the Zambian people will continue to feel the pinch of high prices despite a seemingly stronger Kwacha.

For we believe that appreciation of the Kwacha should be a means to an end – improved living standards – and not just a statistic to boast about. It is incumbent therefore upon the UPND administration, economic stakeholders, and us, the media to keep the focus on tangible benefits, and to ensure that the Kwacha strength genuinely enhances the living standards of all Zambians.