FINANCIAL market analyst Maambo Hamaundu fears the acute loss of the kwacha against the United States dollar will consign more Zambians into poverty.
As at 12:30 hours yesterday, a dollar was buying and selling at K13.96 and K14.01, according to the Bank of Zambia daily exchange rates statistics.
Hamaundu told The Mast that the continued depreciation of the kwacha against the dollar was indicative of the current fragile state of Zambia’s economy.
“It’s an indication of the state of our economy; our economy is interrelated. When you look at what is happening, it shows you that our economy fundamentals are not strong. That’s why we are having this weakening kwacha,” Hamaundu said in an interview.
“The ratio of debt to GDP is over 70 per cent. This can create anxiety and so what is going to happen, clearly, is that players will be thinking…. They are now converting their kwacha into forex (foreign exchange) just to protect themselves.”
He added that a frail exchange rate was sending a negative perception.
“It’s about how government postures itself! We are coming from a background where we should put in place austerity measures but these have not been implemented to the fullest. With what is happening, I’m afraid to say that we’ll have more and more people consigned to poverty,” said Hamaundu.
“Other than rural poverty which is around 60 to 70 per cent…. With the exchange rate going up like this, what are the chances that a person who is running a business and is paying their rent in dollars will survive when their rentals have gone up by 12 to 15 per cent?”/SM