KWACHA STABILITY KEY IN DEBT SERVICING
THE stabilisation of the Kwacha will assist Government to predict cost for debt servicing, says the Economics Association of Zambia (EAZ).
The Zambian Kwacha extended its recent gains on Thursday last week, lifted by healthy dollar inflows mainly from the mining sector and offshore investors.
The local currency is expected to trade on the front foot as corporate firms prepare to settle their wages and salaries this week.
Commenting on this, EAZ president Lubinda Haabazoka said the stabilisation of the local currency meant that Government would be in a better place to plan the cost of debt servicing.
Dr Haabazoka said in an interview in Lusaka that the performance of the Kwacha would also assist business owners to plan.
“The stability of the Zambian Kwacha means that it is going to be very easy for businesses to plan and predict profits and cost especially for international businesses. Government also will be able to predict cost in terms of debt service and also revenue from taxes and businesses,” he said.
The stabilisation of the Zambian Kwacha, he explained, was as a result of a combined factors such as prices for crude oil which were reducing on the international scene.
Dr Haabazoka further explained that this has reduced demand for dollar as other countries import fuel.
He observed that regular updates on both the debt situation and general performance of the economy by Government had enhanced credibility from the international market.
Dr Haabazoka had since urged Finance Minister Margaret Mwanakatwe to continue giving regular updates of the economy to avoid misinformation.
“We have seen that economic discourse has taken quite a positive approach and the performance of the Eurobonds that have gone up has instilled confidence in investors.
“This is so that they can bring in foreign exchange. The ‘wait and see approach’ have definitely started bringing in in their moneys and that can be reflected by the strength of the Kwacha,” he said.