KWACHA CRASH HURTS

Both car dealers and cross border traders say, while the continued depreciation of the Kwacha has largely benefited foreign conglomerates, Zambian small-scale businesses including motor vehicles importers have adversely been affected by the exchange the crisis.

Lubinda Haabazoka, the former Economic Association of Zambia (EAZ) president has described the freefall of the Kwacha as nothing but an exchange rate crisis.

Dr Haabazoka, in an interview with the Daily Nation, said: “Kwacha at 27 mark against the dollar is of grave concern, it is a crisis.

“If you look at the Kwacha within a month, it shed off a seven to a dollar.”

“That is a very serious concern. This is a foreign exchange crisis as this is the first time the Kwacha passed the 23 mark,” Dr Haabazoka said.

Dr Haabazoka is worried that households and business will be unable to afford to sustain themselves if the Kwacha continues deteriorating.

He anticipated that commodity prices, including fuel, may go up and in turn severely affecting households and businesses.

“When you look at prices, most of the goods we consume are imported and as the Zambian Kwacha losses value, importers need more Kwacha to buy forex and that in turn pushes prices up because businesses have to afford importation of stock.”

“So, we are going to see commodity prices going much higher, fuel prices going up definitely because we buy fuel in dollars,” Dr Haabazoka said.

Dr Haabazoka has called for a policy direction from Government to give comfort and explanation as to which direction the country is at.

And car dealers in Zambia and cross border traders have complained that consumers are now compromising on the quality of vehicles they are buying due to increased costs.

This is because they now need more dollars to buy the automobiles. Lazaro us Chitambala, acting Treasurer at the Zambia Motor Dealers Association (ZMDA), lamented that business is currently quite low because there is almost a 20 to 30 percent increment on the prices for most of the vehicles compared to the way it was early last year.

“We have been affected because cars have seemingly become expensive. We have reduced the number of vehicles we are now importing and in a way that also affect the buyers who are compromising on the type of cars they are have initially wanted to buy.

“They now want to buy something that fits their budget and not what they initially wanted. They are also compromising on the quality of vehicles they are getting,” Mr Chitambala said.

He is hopeful that the exchange could stabilise for a while for easy planning.

“Now we have a situation where a client wants a certain vehicle and also most every five days the cost is different,” he said.

Zambia Cross Borders Association Secretary General, Joseph Makambwe, said: “the currency that is not showing any signs of coming back is always a challenge to trade more especially for Zambia where most of the traders depend on the import rather than the exports. This is going to continue impacting on the business.

But on the policy direction, the Bank of Zambia (BoZ) recently indicated that it is being kept “up at night” by the current volatility of the Kwacha, among other issues.

BoZ Deputy Governor-Operations, Francis Chipimo, is optimistic that these would be resolved this year.

At a media training in Siavonga, Dr Chipimo was hopeful that the current trend would be reversed in 2024, with the announced conclusion of matters relating to Konkola Copper Mines (KCM) and Mopani offering renewed hope.

Finance and National Planning Minister, Situmbeko Musokotwane has however hinted that the Kwacha was likely going to make a rebound, banking on the coming on board of Mopani capital injection.