By Carol Sichone
The recent consistent appreciation of the Kwacha has once again raised debate on whether currency gains automatically translate into economic relief for Zambia’s business sector and ordinary citizens.
While companies such as British American Tobacco Zambia recently reported profits during the currency’s upward trend, their financial costs also rose sharply, underscoring the complex realities facing firms that rely on both imports and exports.
In an exclusive interview with Zambian Business Times-ZBT Economist Notulu Salwindi explains that although a stronger currency can help to reduce import bills, it has “trickle effects” that do not always align in Zambia’s favor.
“For export-driven companies, a stronger Kwacha means they earn less in local terms when they bring back revenues. On the other hand, a weaker Kwacha makes imports expensive, and because Zambia is highly import-dependent, it fuels higher costs for both businesses and households,” he said.
Zambia’s reliance on imports from fuel to manufacturing inputs has meant that even when the Kwacha gains against major currencies, the impact on the ground is muted.
At the same time, for key exporters such as mining companies, large portions of their foreign earnings are not fully repatriated back into the domestic financial system. This weakens the currency’s stability benefits.
Government in recent years has pushed for stronger monitoring mechanisms through frameworks such as the Bank of Zambia’s export proceeds tracking system. However, enforcement remains uneven, and questions persist on whether export revenues are being fully captured and retained within the country.
Salwindi who is also an Economics and sio-devlopement consultant, argues that Zambia’s real challenge lies in building a more stable and resilient currency framework.
“The key is not only whether the Kwacha gains today, but whether it can hold value consistently over time,” Sandwindi emphasized. “A stable currency gives businesses and households the confidence to plan, invest and spend, without being thrown off by sudden swings.”
For now, the Kwacha’s movement remains a double-edged sword offering temporary relief for some, while deepening challenges for others in an economy still grappling with heavy import dependence.
