Experts warn Kwacha gains may reverse by September

An Economic Expert says the Zambian Kwacha’s recent gains against the U.S. Dollar can be attributed to seasonal tax obligations that have been fulfilled by various key sectors.

Kelvin Chisanga explained that the mining sector has utilized different tax structures, such as Pay As You Earn (PAYE), which have contributed to the 4.7 percent appreciation of the Kwacha.

In an interview with Lusaka Star, Mr. Chisanga added that the improvement in the Kwacha’s value began in March, following the Bank of Zambia (BoZ)’s monetary policy adjustments, which had a positive impact.

“However, in September, the Kwacha’s recent gains may see a reversal due to import-driven factors such as fertilizer and other farming inputs required for the agricultural season,” he stated.

He also noted that the sustainability of the current appreciation will depend on domestic policy, macroeconomic stability goals, and the moderation of key policy aspects across different economic sectors.

Mr. Chisanga further emphasized the importance of increasing local production of essential goods and ensuring their availability on the local market, rather than relying heavily on the global and regional markets.And Economic expert, Trevor Hambayi emphasized the need to diversify the country’s export base.

He stated that doing so would improve the balance of supply and demand, thereby supporting the continued stability of the Kwacha’s appreciation.

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