The continued depreciation of the Zambian Kwacha against major convertible currencies, particularly the United States Dollar (USD), has led to a significant negativr impact on the prices of imported goods, specifically motor vehicles.
Car Dealers Association of Zambia has highlighted the direct correlation between the depreciation of the Kwacha and the substantial increment in car prices within the country.
According to the ZamStats report, the price of 1 motor Vehicle (Toyota Hilux) was about K1 million Kwacha in May 2023 and has now increased to over K1.8 million as of May 2024 representing about a 73 percent increase on an annual basis.
Speaking in an exclusive interview with Zambian Business Times (ZBT), Pepba Zulu, a spokesperson for the Car Dealers Association of tomotive industry pose substantial challenges for both consumers and businesses alike.
Zulu, emphasized that the escalat. prices of cars are largely attributed to the soaring dollar prices in the country. According to reports, the Zambian Kwacha has depreciated by 17.5 percent against the US dollar, reaching an average of K25 as of June 2024.
Zulu explained that previously when the dollar was trading at around 16 to 17 kwacha, the prices of cars were more affordable adding that with the current high selling price of the dollar, the cost of cars in the market has been significantly affected.
Zulu underscored the importance of a reduced dollar value, suggesting that a decrease in the dollar price could lead to a decrease in not only car prices but also fuel prices, as numerous commodities are intricately linked to the dollar price.
The implications of the Kwacha depreciation on the au“In the past, when the dollar was selling around 16 to 17 kwacha, the price of cars was at a cheaper price, now with the high selling price of the dollar has affected the price of cars on the market,” he said.
“As the association we are hoping going forward that the dollar will come down conceding the debt restructuring if things stabilize as a nation then the prices may start reducing,” he added.
“We are hoping that the government will do something in line with the dollar because once the dollar goes down even the fuel prices will also come down because everything falls on the dollar”.
