The business community has welcomed government’s decision to ban the quoting, paying or demanding to be paid or receiving foreign currency as a legal tender for business transactions conducted locally.
Both the Private Sector Development Association (PSDA) and the Zambia Consumer Association (ZACA) have described the move as long overdue.
Speaking in separate interviews with ZANIS in Lusaka today, PSDA Chairperson, Yusuf Dodia, said the decision by government through the Bank of Zambia will go a long way in adding value to the local currency.
Mr Dodia explained that the trend of quoting in dollars in any local business transaction was devaluing the Kwacha, adding that the ban will also enhance stability in most prices of local goods and services.
He stated that currently most prices of goods and services that are quoted in dollars are not stable because of the variations in the local currency.
Mr Dodia has further challenged the central bank to come up with a mechanism to release more foreign currencies on the market as a way of strengthening the Kwacha, thereby stabilizing the exchange rate.
He stressed that by doing so many companies will be encouraged to quote in local currency as it will give them the same value for their products as they get when the charge in foreign currencies.
The PSDA chief, however, added that this can only be realized when the BoZ passes a regulation law that will compel people dealing with export businesses to keep their money in Zambia.
Mr Dodia has since appealed to the business community in the country to embrace the ban by domesticating their transactions and appreciating the local currency.
And the ZACA Executive Director, Muyunda Ililonga, welcomed the move and charged that dollarization is not necessary for a sovereign country like Zambia
Mr Ililonga explained that Zambia is an independent country and the Kwacha is the legal tender hence the need to be respected by all.
He noted that the tendency of conducting businesses in foreign currencies was putting most consumers in the disadvantaged position.
He explained that with the instability in the local currency, consumers were treated to a market of unreliable prices for goods and services, thereby contributing to the country having a lot of uncertainties in exchange markets.
Mr Ililonga added that this is why ZACA feels the decision is progressive and should be enforced for the benefit of consumers in the country.
Last week, Finance Minister, Alexander Chikwanda, signed a Statutory Instrument (SI) number 33 of 2012 which will be enforced by the Bank of Zambia.
The SI prohibits the quoting, paying or demanding to be paid or receiving foreign currencies for goods and services in Zambia and anyone found guily shall be imprisoned for a period not exceeding 10 years or will be made to pay a fine not exceeding one hundred penalty units.
ZANIS
Nice move to strengthen the kwacha
Good move, promote the local currency.
Makes sense
What about where by lease agreements for rentals especially shops in town have already been signed between landlord and tenants?What shall we do?These Indians always quote in Dollars.Some one to clarify on this one.
Sue them and have it reversed to Kwacha but then again they might just quote the kwacha equivalent of their dollar charges.So it might not be a win situation for you.
Agree with 1,2,3. Interesting point no 4. There are pre-existing agreements that will have to be converted at a particular exchange rate so if it is from immediate effect then the head scratching accountants need to get on the case. Perhaps there is a grace period of sorts. I would assume new quotes cannot be in dollars from this.
Mr Dodia this should have happened long long time ago. C’mon Zambia we can build this country. Man this should have happened long time ago. I would have done this years ago. Very slow thinkers. Must be the sunshine. Too laid back! No seriously, this should have been thought of years ago. This was going to be one of my plans. Too many greedy people of course and selfish people. Too many exploiters……….. Now make rent affordable. Easy how to do that! Wake up!
True to that !
Brilliant move which has been long over due too. Nice!
Good move PF.It takes a kaponya gvt to implement such policies. The so called educated go to sleep when in power. worse more HH would be snoring if ever he will be president of this Zed??????
#4…
The law states explicitly and unequivocally that ALL local transactions are to be conducted in Kwacha. For those like referenced to by # 4 you are obligated by the law whose enforcement is with immediate effect to pay the kwacha equivalent at the current exchange rate
There are no exceptions for local transactions
Just out of curiosity, what currency will Zambian hotels will be quoting online to the 3000 overseas customers when hosting the United Nations World Tourism Organisation (UNWTO)?
How many times is dollarisation going to be banned. I remember it was banned by BOZ in 2006. Besides i think must companies seek quotation in dollar from supplier for easy comparison with foreign suppliers during tender evaluation. Payments are done in kwacha. its just that kwacha is highly devalued now heence the panic.Foreign suppliers are paid in dollars if they have foreign accounts.
Sorry, folks but this move is silly and will not do anything to “strengthen the Kwacha” like these stooges, Dodia and Ililonga wish to believe. If I’m selling a good that is imported or has a high share of imported raw material, its price will continue to fluctuate with the exchange rate and has nothing to do with name of the money the good is priced in. Yes, the Kwacha must always be accepted in Zambia, but that is different from banning payment in another currency if that other currency is considered more convenient for the buyer and seller to transact in. Instead paying only in Kwacha could now spike inflation. Govt’s job is to make doing business easy, not more difficult and such restrictions will only scare people away! All the business people I’ve talked to are deeply opposed.
Zambia must focus. Keep Sata busy away from the thinkers. Tell him to go and play golf and tell him every now and again he can crack jokes. But on a serious note if Zambia starts to think like this there’s hope. Just keep Sata busy and give him little chance to interefer. Good move PF. Maybe there’s hope. Just maybe, but you have a lot to prove. . Go to Malawi and get our fuel reserves back. Have they paid for it yet? Where’s the money?
ME i will always quote the corruption money in us dollars, because when i charge them in kwacha wayopa mamillion yapaka too much, atleast nga nalandako ati 500,000 us$ it makes sense, not 2 point 1 billion hahahaha
And those who are mining contractors with long term contracts? How do they change there rates? Iam sure this instrument does not apply to all and sundry. Are you saying Atlas Copco, Boatlong year, Hitachi should sell their products and units in Kwacha? Why doesn’t he sign an instrument to compel all mining companies to Bank 80% of the money from copper sales in Zambia?
Hitachi and co do not sale in US$ here in UK. Why should they in Zambia?
To UP END everything is sour.. But its every little effort that makes one to be successful.
Yes! Yes! Yes! This is what I’ve been waiting for. I’m tired of paying in foreign currency at the border for using the ferry and paying for road tolls. Now will somebody tell those government officials at the border they risk being jailed for asking for payment in foreign currency. Way to go!
Good move. Absolutely no need to trade in US$ within Zambia. We should be proud of our currency.
Here in UK, we trade in British pound sterling. Even if you are buying something fromUS, quoted in US$, you pay in BPS£. the banking or payment systems convert for you.
we still need real change of govt..things have gotten form bad to worse..
Why this was not done years ago we shall never no, shake my head.
Fi MMD ubututu let this trend start.
This was an expected move after Ukwa came from getting info on how to run (down) a country. Zim did this a few years ago and look where they are. Next we will be kicking out foregn journalists and telling the west to go to hell! Pamberi nePF! Pamberi neUkwa!
Most stupid move. Zimbabwe just realised and is now American dollars and u than jump in the fire, very stupid move.Where is the LOGIC u Morons, wake up.A tourist lands at KK int Airport and wants to pay for his Visa and u dont accept Dollars,u quote him in kwacha, but except dollars later, STUPID .Libralise trade , let market forces decide, Dont bring in those stupid rules like in the 80,s, Go forward, Remember, SUPPLY AND DEMAND??:((
@15, Mashindu:
Where have you been baba? That’s why the govt is debasing the Kwacha, exactly for the reasons you have stated!! This Billion this, Trilion that kind of crap came about as a result of our crapy economy in the eighties and nineties, now there is no reason to have so many zeros in front of our Kwacha—-kaponya govt at work, catch up my friend!!!!
sorry……it is “rebasing” not “debasing” at my comment to Mashindu above!!!!
@24, Gromyko:
Wow, you are all over the map bululu! Why is it always dollars and not, say, Germany Mark, Chines Yuyani (or whatever it is called), or Kuwati’s maney, extra? Are you telling me tourists from these other countries are not valued in Zambia? Or these tourists magically turn their curencies into dollars before landing at the airport in Zambia? Ubukopo ba Gromyko!!!!
By the way, you can not compare what is going on in Zim and what is being talked about here! Zim is trying to fight run-away inflation because their money is basically worthless. And the causalities of inflation are totally different from trying to “conduct business transactions in a legally permisible local.” The Zim economy has completely stopped working due to circumstances beyond Zim legal tender!
I hope this applies at the border (Kazungula) in particular were pontoon fees are qouted in dollars
Hey would you mind letting me know which webhost you’re utilizing? I’ve loaded your blog in 3 completely different browsers and I must say this blog loads a lot faster then most. Can you suggest a good web hosting provider at a honest price? Thanks, I appreciate it!