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HomeAfricaZambia: Kwacha’s free fall borders on economic sabotage, opposition claims

Zambia: Kwacha’s free fall borders on economic sabotage, opposition claims

The leader of the opposition United Party for National Development (UPND), Hakainde Hichilema, says the continual slide of the Zambian currency, the Kwacha, is not only an indication of the ruling Patriotic Front government’s failure to run the economy, but it actually borders on economic sabotage.

Hichilema said it was unacceptable and embarrassing that since PF took over power in 2011, the local currency has been in a free fall and is always being declared as the worst performing currency in the world.

“The excuse being given that the weakening of the currency is as a result of low copper prices does not hold water because the metal prices are way still higher than the 2000s when the Kwacha was still doing better,” Hichilema said Saturday.

He said to cure the situation, the PF must first accept that among the reasons for the depreciation of the Kwacha were careless policies and wanton expenditure that were having a telling effect on the country’s fledgling economy.

“By deciding to tie all the revenues and borrowed money into infrastructure, PF has made our economy consume more than it is producing to generate more wealth.”

According to the UPND leader, the Kwacha’s fall can also be arrested by the introduction of proper tax on the mining sector such as windfall tax.

Hichilema said whereas the country needed investment infrastructure, there was also the need to heavily release money for the manufacturing sector so as to reduce the country’s heavy dependency on imports.

He said that at this rate, the prices of fuel, basic food prices, fertiliser and other agricultural inputs will continue going up thereby increasing the cost of living for the people.

The Kwacha was trading at K5 against the US$ dollar in June 2013 but seven months later it started trading at K6 per dollar, recording a 20 percent depreciation, the lowest in 20 years.

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