Economist Yusuf Dodia says the Zambian Kwacha which is currently at K26 per dollar, is likely to strengthen to below K15 per 1USD after the full implementation of the export proceeds tracking framework which came into effect on January 1, 2024, as announced by the Bank of Zambia (BoZ).
The export proceeds tracking framework compels all exporters to deposit their export earnings within 90 days of export in banks domiciled in Zambia. The Framework is intended to enhance the compilation of balance of payments statistics by expanding the coverage of external sector statistics, particularly relating to the capture of data on the utilization of export earnings and information on balances held abroad by resident enterprises.
Speaking in an exclusive interview with the Zambian Business Times, Dodia explained that the full implementation of the framework would result in a significant increase in revenue for the country, with as much as K30 million US dollars coming in every day.
Dodia argued that if the framework is successfully implemented, there is no way the Kwacha will continue to depreciate.
He also warned that failure to implement the framework would lead to continued pressures from multinational companies, resulting in little money being paid through mineral royalty tax and ultimately hindering the country’s economic growth.
Dodia said the implementation of the export proceeds tracking framework will play a significant role in shaping the future of Zambia’s economy noting that when money begins to come in through the framework, the kwacha may begin to gain strength.
“My prediction is that if we stay the course if we are committed, if we are consistent, we should see a kwacha to dollar relationship below K15 to 1 US dollar, if the local currency continues to depreciate, it will mean the framework is not being implemented. “If it is implemented, we should be seeing K30 million US dollars coming in every day. If that amount of money is coming in there is no way you can say the Kwacha will continue to deteriorate” said Dodia.
He said if the framework is not implemented and the country continues to succumb to the pressures of the large multinational companies, the economy will be condemned to remain as it is for many years as all the wealth will be going out leaving the country with the little money being paid through mineral royalty tax which is not enough to grow the economy.
