GOVERNMENT has released US$120 million on the market to arrest the depreciation of the Kwacha against major convertible currencies, a move that will see the Kwacha start rebounding by today.
President Edgar Lungu said the money has been released to offset Government bills in sectors like health, education and construction.
This is according to President Lungu’s Special Assistant for Press and Public Relations Amos Chanda who briefed the Press at State House yesterday to announce measures Government had put up to arrest the rapid depreciation of the Kwacha and energy deficit.
President Lungu said the interventions to arrest the plummeting Kwacha include the release of the US$120 million from part of the recently procured $1.2 billion Euro bond.
The money was released between Thursday and today.
“The Kwacha will, starting today show signs of recovery because of the money that is been released. Part of the reason that the Kwacha has been performing badly is because some sectors have slowed down due to non payment,” he said.
President Lungu said the increased volatility of the Kwacha appeared to be reflecting market panic more than underlying fundamentals.
The President has therefore directed the Finance minister to work closely with the Central Bank to assess additional market intervention measures to address the volatility.
Mr Lungu urged the public and private sector to reduce on imports and increase exports as well as avoid activities that would lead to further demand for forex as a way to calm the Kwacha.
The Kwacha has been depreciating due to among other reasons, low price of copper, a commodity which is the country’s main forex earner.
In the energy sector, President Lungu has sanctioned remedial measures including power importation and transferring shares from the Ministry of Finance to the Industrial Development Corporation (IDC) which would allow the IDC source an initial $500 million to invest in the energy sector.
The President has instructed Zesco to operate more efficiently by being self sufficient, reliable and not rely on expensive measures like importing power.
Government has also signed a contract with an independent power supplier and was talking to another to supply power by January among other interventions.
The measures would see Zambia export power in less than two years. He has thanked Zambians for putting up with inconveniences of power cuts which have affected both small and large businesses.
“This is what I think about every day. I want the nation to know that no one feels the anguish of these disruptions more than I do,” President Lungu said.
Meanwhile, President Lungu has said it was regrettable that some people had reduced the power and currency challenges to factors of political rhetoric.
He said Government was in control and citizens should not panic but instead work together to rise above the problems.
The President would announce major measures Government had taken on September 18, this year when n he addresses Parliament.
Oh My God!! So, the Euro bond is for govt bills in health, education and construction! What will happen then when this Euro bond is totally consumed?? I foresee civil servants going without salaries and construction projects stalling!! A gloomy future!!
Desparate band aid measures. This is unsustainable. What happens after the $120M runs out? What next?
This is what happens when criminals like Lungu do whatever it takes to come to power without understanding what the job of a president entails. Very unqualified.
Lungu, kuya bebele
kaya manje mwe!,,,, maybe witch doctors can advise the nation on the way forward!!
PF ni chimbwi no plan for sure. Those in doubt should now open their their eyes and start supporting the alternative which is UPND.
I have said it time and again that there is abosultely no way the Kwacha is going to appreciate with clueless PF in power.
Now they are borrowing to arrest the free falling kwacha. How preposterous is that! HH has given then ideas of how to stabilise and improve the kwacha by investing the borrowed money in value adding to products Zambia produces. Then sell these products abroad to earn forex which then will boost the Kwacha. How easy is that?
Viva UPND Viva HH Viva GBM
Lungu being a lawyer thinks every problem can be solved by trickery and fraudster. He is clearly out of his depth and not even his entirely corrupt judiciary will come to his rescue. Listen folks, not everyone is a fouol and clueless like these leaders you elect. You are not fouoling anyone by these desperate measures as a matter of fact you are making the situation worse! People in the know would be aware that you are now borrowing to engage in currency speculation and this will erase the little confidence the markets may have had in changing fundamentals. You are effectively telling the markets that you have failed and have no plans to revive the economy. How many times have we warned you Zambians, how many? Well?
This is like sending your 4 year old son to go and scare away thieves & the boy shouts “ba daddy nga ba fumina panse mwalamona oh eeh”.
Kaminaminsa come out of hiding. Nangu false confidence sometimes ila bomba.
We are in trouble.
We are really in trouble. So they think a one time injection of dollars with curb the depreciation. The bottom line is that exports, the source of our foreign exchange have declined, while imports, the use of the foreign exchange, has remained strong. So what will happen in October? Will they keep releasing dollars till it runs out.
On second thoughts, I think I can make some money out of this foolishness. I know their plan is not sustainable. So once the kwacha improves I quickly buy and hold till they run out of dollars to prop up the exchange rate. Then I cash in! 🙂
More money in my pocket!
I’m buying dollars when it improves and selling when this plan runs its short life.
I wonder who advises these guys at state house. I will make a fortune. You see the rate may drop due this move, but only momentarily. When the run out to euro bond gun powder the rate will rebound.
In short. It’s a bad plan. I mean whay kind of government offices can says things like “from today it will start improving”?
If they can predict the exchange rate, they would not work at state house but make money in the foreign exchange market.
That’s another $120m of borrowed money down the drain like the $120m used on Atanga at ZRL from the last bond….it is now clear that these empty tins went to the market and borrowed money at a whooping jaw dropping 9.5% with utterly no plan but to use monies for consumption like we predicted…the chickens will come to roost and its not this lazy bum Edgar or the fossil Chikwanda who will pay with interest these monies…they will not be present in 15 years time; its us and our children.
“Infintu ni Lungu” “Infintu ni Lungu” the natives ignorantly shouted last December
And this is the result of such “intelligent” decision:
Source: Bank of Zambia USD inter-bank exchange rate Kwacha v. USD
04 September 2015 15:30 10.0192 10.0392
04 September 2015 12:30 9.9475 9.9675
04 September 2015 09:30 9.8056 9.8256
03 September 2015 15:30 9.8386 9.8586
03 September 2015 12:30 9.7828 9.8028
03 September 2015 09:30 9.5639 9.5839
02 September 2015 15:30 9.3644 9.3844
02 September 2015 12:30 9.4125 9.4325
02 September 2015 09:30 9.1392 9.1592
01 September 2015 15:30 8.9711 8.9911
Well done, Permanent Failure money market “successful” intervention results
Not a solution at all. This measure sounds desperate and has a short remedial effect. Removing two devils and later on allow a legion of devils to enter a mad man.
Yaba! There you go. The uero bond has been taken for consuption.
I;m told that Kwacha in Webster’s Dictionary has a new meaning…clueless toads.
….this was better announced by Bank Of Zed or da ministry of Finance and certainly not from state house….
….I hope this is not another saga of ‘shooting in the dark’…..
Imwe ba fikala bushe kanshi ninshi mufwaya? Tobombeko ati nyo nyo nyo..,
Oh dear me, my skin is cringeing with rage… where is Captain Solo to storm ZNBC Mass Media for one hour to wake up these cluesless reckless people? Why don’t you let the Kwacha find its own value instead of propping it up with borrowed “Kaloba” money, you are clearly thinking short term instead of long term…we borrowed money at a whooping rate of 9.5% and the reckless empty tins are using it to pay bills and consumption; you don’t need to be an economists to see what is happening here is wrong AND UNSUSTAINABLE…if you have had a high interest rate credit card in the past and you USED IT to pay your way out of debt; you will attest to the fact that the ending was not profitable for you.
Please fire the senile Fossil Chikwanda and bring in someone whom the BOZ Governor can work…
Ultimately,Zambians are just basically dull people
But this is beyond incompetence.Why even announce such kind of thinking to the public?Clearly we must be a sorry joke in the eyes of the international world?These jockers are now confirming that they borrowed for consumption and not investment.God help us.
Now that article published on the 2nd September on LT by Kalima Nkonde titled ” How Zambia’s excessive borrowing will affect you soon” is starting to sink in.
Short-term solution. But let us look at it this way. We will import consumables in dollars, and use more dollars for yet more imports and profits. In no time we will be back to square one. What is needed is a more radical solution in as far as production is concerned, and re-visit legislation on profits and import costing.
This is just postponing the day of reckoning by living off borrowed money (kaloba) and borrowed time. What happens when the Eurobond dries up? This borrowing for consumption. You borrow for things like putting up new power plants, water supply and sanitation rojects, support of (loans to enterprises engaged in ) non traditional exports to widen the forex earnings base. Such projects will generate income and help to pay off the debt. Not meeting wage bills (recurrent expenditure) and pay corruption riddled township roads construction contracts. What a country!
Though we have seen carry trades unwinding in other neighbouring countries caught off guard by Chinese fallout’, this is not necessary the case for Zambia Looking at the foreign exchange expectation in relation to the forward exchange rate ,the expected mean value of the Kwacha will be above in MEAN value this sterilised or unsterilized because of what has been recently been explained One need not plot so many dots
But to also say that Gov. is spending one will need to much the velocity and multiplies in those FX sold though Gov. has gained on the FLUACTUATION hoping that the kwacha stays below spot but that should be fundamentally supported by…
should be fundamentally supported by real revenues in FX from productivity and matched with savings where necessary to recoup the reserves back in the spend 120 USD
Something though of interest is to look at the Inflation rates and Interest rates as expectation of what the Kwacha should be in December 2016
Its also confirmed that relying on inflation targeting is not achievable measure of addressing and pushing forward the economy progress
There are other indirect methods used to address purchasing power parity in the Kwacha also with good outcomes
What can a rational leader surely learn from Robert Mugabe? I remember who Zimbabwe suffered,it was really a sorry sight of an event,Zambia may also follow the same path & even worse due to loadshedding & grand corruption! Surely you can not borrow for consumption,its illogical & irrational for you will surely sweat everywhere when pay back time comes!Zambia,what a failed state it has become!As I said recently,the pressure is building up in majority poor Zambians & Alungu may be greeted with an uprise & civil strife/unrest countrywide,he really has to strategise before its too late! HH foresaw this,more especially loadshedding-& as always, he (HH) was welcomed with a lot of all assorted unpalatable & uncouth words!PF,2011,its just chiimbwi no plan all the way!
How do you borrow huge sums of money at high interest rates to pay bills? This presidency is the worst ever
What can a rational leader surely learn from Robert Mugabe? I remember who Zimbabwe suffered,it was really a sorry sight of an event,Zambia may also follow the same path & even worse due to loadshedding & grand corruption! Surely you can not borrow for consumption,its illogical & irrational for you will surely sweat everywhere when pay back time comes!Zambia,what a failed state it has become!As I said recently,the pressure is building up in majority poor Zambians & Alungu may be greeted with an uprise & civil strife/unrest countrywide,he really has to strategise before its too late! HH foresaw this,more especially loadshedding-& as always, he (HH) was welcomed with a lot of all assorted unpalatable & uncouth words/phases!PF,2011,its just chiimbwi no plan all the way,plunging the country…
Some BOZ monitory effective will also help to avoid some ABZ bank buying indirectly to hold in large measure and trading the offloaded in Triangular arbitrage opportunity in three Currencies mostly traded and when the spreads forward foreign exchange currencies differ to market conditions they check the bank dealer positions and trading volumes and curtail trades to continue the pressure on the Kwacha downward fall even when productivity and trades induced from this activity is well intended to activate and provide some liquidity to easy that pressure
We know these style of banking and Forex trading very unethical not reflecting the operational licence and guidance…
The old FOSSIL has now proved just what a STUPlD F00L he is! If he had just one cell left in his sick brain he would have educated Lungu on this STUPlDlTY!
These clowns have now reached the world record for incompetence. They have obviously never heard about how George Soros broke the Bank of England!
The are now telling us they have solved the problem by inventing the wheel!
If he had any brains he would have gone to the lazy bum in State House and made his case..if he refused to take his advise he would wisely stepped aside BUT THEN AGAIN this is not how African politicians think; they think about their stomachs first.
Daily Mail says Fossil Chikwanda is calling for “brainstorming” sessions to think about diversifying the economy.
Mr. Minister of Finance, you actually have to have a functioning BRAIN to do “brainstorming”!
In your case I think your brain shut down some time ago. Maybe a brain transplant? But a recipient needs to be alive for this to work. Brain transplants into fossils are definitely a waste of effort.
Are adequate measures in place to protect this seemingly temporal implantation from unscrupulous traders? Isn’t it possible for a ‘sabotage bent cartel’ or just one multinational to syphon this from the market and hoard it to hold the country at ransom?
@ awesu
“unscrupulous traders”???
You mean Chikwanda and Yamba?
All people posting are condemning without a solution……so it it were you what would you do instead of you pointing fingers please provide solutions
Try long term solutions like use that money on manufacturing for consumption and export. How can shopright be selling bread and bisects from SA?. instead of removing duty on solar panels, remove taxes on locally assembled panels with some components made in Zambia as way of incuraging manufactures to set up shop in Zambia while applying heavy duty on imported ones. Apply this to a host of imports. If manufactures of imported products that are popular do not set up plants in Zambia, tax their products heavily. After identifying targets GRZ should look at setting up fully serviced industrial zones where these plants can be located instead of building roads to nowhere which turn out to be the most expensive in the world.
It is LUNGUs job to find solutions! That is what he is being paid a huge salary to do!
If he fails to do that job, CONDEMNING is not nearly enough.
He should be FIRED. With IMMEDIATE EFFECT!
@ zemwila,
People posting here have not been neither elected no paid to do the job of incompetent leadership. It is PEOPLE RIGHT to voice theirs disapproval.
This was supposed to be top secret and not announced. As it is people have an idea of how much dollar they need to take out for them to continue blaming GRZ.
It is no secret. It was exactly the knee-jerk reaction to be expected from a bunch of incompetent F00LS that have NO PLAN and are completely clueless on economic matters.
This is just the same thing Chikwanda did before when this situation happened previously. And then it BANKRUPTED Zambia, added 000000s onto the Kwacha, and made us a Nation of BEGGARS that had to go to the IMF and grovel.
Maybe you are too young to remember HIPC that finally took us out of KKs economic disaster.
This is postponing the day of reckoning by living off kaloba & borrowed time. At 120m per month, that is 10 months time & the Eurobond is finished on consumption. Responsible govts borrow for new power plants, water and sanitation projects, support (loans to non traditional exporters in order to broaden forex earnings Base. Such projects will generate income and help to pay off the debt
Not borrowing to meet wage bills (recurrent expenditure). Let the kwacha find its true/real value. Bite the bullet now!
You were warned about Lungu everything Guy Scott said is happening so you suffer maybe time time you will know how to vote. It will take a very long time to repair the economic damage being done by the PF government on zambia these *****s have to go sooner than later.
Diversification is not only about commodities Its also about Currency and risk managing the returns and down risk investing over the long horizon Avoiding to or reducing the magnitude of a potential loss over that length of Investments Horizon
You do not offload the “”PRINCIPAL SUM”‘” You invest and strip the interest earned and through it smoothly over the horizon Preserving your CAPITAL and PRICIPAL SUM There things like the Sovereign TB Bills and some risky S&P 500 funds to invest in with matched returns
You will need to focus on Time diversification from the perspective of losing money in your currency decisions
Individual Firm and Gov. Investing…
“In the energy sector, President Lungu has sanctioned remedial measures including power importation [and] instructed Zesco to operate more efficiently by … not rely on expensive measures like importing power.”
Say what?
IF BIGGER ECONOMIES LIKE SOUTH AFRICA HAVE DONE IT EARLIER, WHY CANNOT WE DO IT TO SAVE OUR KWACHA?
JUST READ THE FOLLOWING HEADLINE…SA SPENDS R50BN TO STABILIZE THE RAND….
SOUTH AFRICA HAS SPENT OVER 50 BILLION RAND OVER THE PAST YEAR TO TRY AND STABILIZE THE VOLATILE RAND CURRENCY, THE DEPUTY FINANCE MINISTER SAID. HE TOLD US THAT IT’S NOT JUST THE STRONG CURRENCY THAT’S A PROBLEM BUT THE VOLATILITY. ON AUGUST 4, THE RAND HIT AN ALL-TIME LOW AGAINST THE DOLLAR. THIS CAME AS FINANCIAL MARKETS REELED OVER THE IMPACT OF SLOWER GROWTH IN CHINA…..SO UNLESS YOUR BRAINS ARE ALREADY RE-PROGRAMMED TO LISTEN ONLY TO HH AND NAWAKWI’S VUVUSELA RANTS IN THE POST AND IN THE ZAMBIANRABIDDOG, ALL COUNTRIES ARE FEELING THE EFFECTS OF CHINA’S DIARRHEA.
@Luapula Premier:
What an Ar.sewhore you really are!! Can’t you see that SA can afford it because they are spending their own money – in Zambia you are spending money borrowed for Investments mean to generate income to repay the debt!!
I know your thick dull head cant understand simple economics – all you PF cadres know is stealing and now you are in fix because even you thieves and your relatives are now feeling the effects of your own thieving!!
SA can afford to do that knowing they export every thing Zambia conumes, they will be getting their dollars back from Zambian consumers. What do you have to say about that??.
We need these pipo,hh,mutati,nawakwi,GBM and the entire UPND
@Luapula Premier – RSA has cashcows in the name of Shopping Malls you worship in your backyard to supply them with much needed forex and keep their factories working 24/7 because you are too lazy to produce your own produce..even your lazy President goes for check up there as a medical tourist.
Take note its not your Lungu or rich HH or Nawakwi who will pay for this its your children & grandchildren that will feel the full heat when the debt collectors come knocking.
Wake up from your folly!!
You dullard,South Africa is not using not using borrowed or Kaloba money(I hope at least by adding Kaloba you will now understand) instead they are using money from their road export base unlike us who borrowed to consume at a whooping 9.5%.
@Luapula premier we chisoso we. The difference between SA intervention and Lungus Intervention is that SA used money from its National Reserves were as Lungu of Zambia is using Kaloba Euro bond money to pay bills. Its so shame full to learn that Zambia has no money in its reserve Bank to resort to using the newly acquired EURO BOND. What can happen if Zambia is faced with war ,can security officers have fuel or resources to fight and defend our Nation. Zambians lets be serious and remove these criminals from power. The earlier we do that the better.
These are desperate thieving tactics! We are all know that this gives an opportunity for the PF – Please wake up you Zambians. Most of that money, say £100 million will end up in the PF politicians’ bank account and cant be accounted for.
They are not even telling you how exactly what they have done with that money and how they are going to account for it! It’s pure day light robbery because Lungu and Chikwanda have simply put that money in their bank accounts – Zambia is broken!!
One influential public speaker once said: You cannot establish security on borrowed money and you cannot keep out of trouble by spending more than you earn. This applies to both Individuals & Institutions. Zambia is in deep trouble.
in economics its says more money should be off-loaded on the mrkt to stablise the economy, the whole of ths week crying for the president to address the nation , after doing it again complaining, wat do you want him to do.
@ mama waluse
Please try again, your “quote” is missing couple pages.
What do we want him to do?
RESIGN!!!!! IMMEDIATELY!!!!
This visonless clown has proved he is incompetent and the job is too big for him.
If you want to increase your foreign exchange reserves create a global tax haven in Zambia
Regardless of the fiscal regime, no sane investors are going to overlook completely chaotic, incompetent & corrupt governments. This is a corner stone of everything and represents the most unpredictable risk to business. Sort out governance issues, judicial independence & press freedom and you are on your way to becoming an attractive destination for business and tourism! If you keep voting for corrupt & incompetent politicians who constantly abuse their authority, national resources and corruptly abuse the judiciary to support their hold on power, you can forget serious external investment other than material extraction and you will remain poor forever!
We need these pipo,hh,mutati,nawakwi,GBM and the entire UPND
Whatever is happening in Zambia is a wake up call. All we need to do is stop voting foolishly, we do not seem to take the position of presidence seriously. Aya Malibu yakuilombela, so lets enjoy the suffering because we knew what we were voting for’ ati ifintu ni lungu’ the guy embezzled his Client when he was practising law and he was deregistered, was that not evidence enough not to vote for him? So if he embezzled his client what do you think he will do with these juicy Eurobonds?
The release of $120 million can only be a solution if the government is using the peridots come up with a lasting solution. Otherwise it is throwing good money after bad and is a typical PF solution. This sort of action has been done before by previous governments and it was t a long lasting solution.
Regardless of the fiscal regime, no sane investors are going to overlook completely chaotic, incompetent & corrupt governments. This is a corner stone of everything and represents the most unpredictable risk to business. Sort out governance issues, judicial independence & press freedom and you are on your way to becoming an attractive destination for business and tourism! If you keep voting for corrupt & incompetent politicians who constantly abuse their authority, national resources and corruptly abuse the judiciary to support their hold on power, you can forget serious external investment other than material extraction and you will remain poor forever!
The PF bloggers are asking for solutions.
1) On the export side, bring together your key ministers and officials that deal with the external sector, (Tourism, trade and industry, ZDA, BoZ etc. ) to see how we can boost tourism, FDI, exports and remittances.
2) On the import side, bring MoF, ZRA, ERB Indeni. We cannot adjust our main import oil, impose a tax on luxury and consumer imports.
3) Creat an environment to attract dollars. Have a sane investment policy. Create an investment vehicle for the diaspora. Ease the cost of doing business for exporters. Remove the visa requirement for all, so we also have African tourists visit.
4) Cut goverment dollar expenditures, including dollar based expenses.
5) Renegoitate debt repayment schedules with WB and IMF so boma does not…
@ZED, I fear the following:
1. The easiest they will do is turn to the Tourism Minister and ask her to increase the number of big cats to be shot for trophy hunting.
2. They will impose punitive tax on importing oil and zero-rate charcoal exports.
3. They will certainly allow visa relaxation BUT they will introduce birth certificates at airports for everyone regardless of age.
4. They will stop the Ministry of health from importing essential consumables.
5. They will PROMISE to do that once voted back into power.
6. They will PROMISE opening of huge farms and factories once voted back into power.
7. They will visit Zimbabwe for advice from Mugabe.
8. They will open new missions in the Arctic and Antarctic regions. Relatives need posting!
9. State House will script another…
9. State House will script another disastrous press release through that equally —— press secretary
10. They will PROMISE to change once elected back into power.
Boma does not look for dollars for a while.
6) Restart the diversification drive.
7) Recall all debt. Zimbabwe maize.
8) Close some useless foreign missions and government trips.
9) State House should have a press conference to communicate with citizens
10) Prepare for a change of Government.
??
@Chilyata
I FORGIVE YOUR EMB -ECILITY.
JUST BECAUSE SA DOES NOT ANNOUNCE BORROWINGS OR DOES NOT GO to IMF OR THE WORLD BANK TO BORROW DOES NOT MEAN THAT THEY ARE NOT BORROWING MASSIVELY. FOR YOUR INFORMATION, SINCE 1994 SOUTH AFRICA HAS ESTABLISHED ITSELF AS A CREDIBLE GLOBAL BORROWER, SECURING FINANCING AT COMPETITIVE RATES TO FINANCE THEIR INFRASTRUCTURE. IN 2013/14, GOVERNMENT’S BORROWING WAS E R162.9 BILLION…..KA POLI IWE, WHAT IS YOUR ARGUMENT?
@Luapula Premier:
The beauty about democracy is that even morons and lunatics like you are free to hallucnate in public!! Who really do think you can cheat with your fake economics – countries do not need to announce their borrowings because that information is publicly available!!
Just shabby that rubbish about SA debt into your backside where the sun never shines because it is all nonsense! MF!!
Corruption, injustice, stealing and lies will eat you up. That’s why God warns us against these evils. Where are you now? Go ahead. We shall see how far you will go.
YOUR UPND MP NKOMBO PUBLICLY TOLD THE WORLD THAT HE WOULD RESIGN IF HIS PARTY LOST.
HAS HE RESIGNED? LUNGU WILL STILL BE AT THE HELM OF ZAMBIA’S POLITICAL AFFAIRS.
Come 2016, you will wail but in vain with “your Tonga President this time” GIBBERISH.
Very short term thinking indeed. And when it comes to 1$ to K9.00 they will even sponsor ads to claim that the Kwacha has gained. Gain from what? the bench mark is 1$ to K5.00, meaning until you exchange rate is below K5 lets not boast that it has gained. You found it at K5 and a gain should be below what you found it at.
@Me
YOU seem to be READING TOO MUCH OF HHGOOGLECONOMIC THEORIES.
DO YOU DREAM ABOUT A RAND, PULA OR EVEN THE US$ TO RETAIN THE PRE 1970 VALUE?
THEN WE CAN AS WELL PRAY FOR THE PRE 1968 EXCHANGE RATE WHEN THE KWACHA WAS ONE TO ONE TO A BRITISH POUND!
These ba UP and DOWN are really desperate for power going by their unreasonable criticism even for something done in the best interest of our economy.Be rest assured that no matter how much you are going to yap on this site,in 2016 Zambians will still vote for ECL because he is full of initiative and quite hardworking.
This measure is timely and very ok as RSA and other African countries like Ghana and Nigeria have doen the same, Naira is N220 per 1$ today compared to when it was N145 in 2014 September last year. All what is required now is to control the remitting of hard currency by HH supported Shoprite, Pick n pay and game stores which are milking Zambians. If this is done the kwacha will dramatically appreciate.
These PF bloggers still do not appreciate the seriousness of the challenge the country is facing. I guess they will soon get it when it hits their pockets.
PF malabishi……streets of Lusaka, compounds and even mini bus drivers are saying no PF after 2016.
Go ahead and do your own research ….. people are fed up!!
Munyolopi,
Then shutup and wait for 2016. Tawakaipule. Takwaba leadership ya kowela ku fyongo nga upnd. All of you in upnd are (SCARED ALARMIST) small boys and girls who can not face your own individual challenges and always crying to government for everything. Your noise does not make sense, and you think you can lure the right thinking voter to vote for you? My foot. All these challenges were prophesied by the man of God T.B. Joshua. Spiritually , the man of God warned the whole world that satan would use the U.S dollar to economically destabilise most currencies of the world. How would you know the solution if all you know and embrace is satanic campaign. Zambia is a Christian nation and God is in control. So stop the noise and advise hh to just forget about becoming a Zambian…
Multi-colored h00ker speeding Gospel according to “democratic” and “learned” permanent failures manifesto.
By the way, crooked Nigerian “prophet” did not manage to see his building constructed on lies collapsing before completion?
@Black woman or what ever you call your self I berg you to open your eyes because this problem is not for Lungu or PF alone. Its for all Zambians we are all feeling the pain of Lunge’s mismanagement of the economy weather PF or UPND after all we are all Zambians .Our suggestions and concerns are genuine and not mere political rhetoric. It is as and our children who will pay back this EURO BOND KALOBA money. This is beyond partisan politics its about life and death .
I have no issues with PF and Edgar Lungu’s attempts to stabilize the sick economy that he inherited. But when I read “….directed the minister of finance to work closely with BOz to identify other measures….” I feel some insects crawling up my spine. The ministry will read that as directing and controlling Boz, oh poor Denny Kalyalya must be missing his job at IMF! Brace for chikwandanomics which helped bring us to this sick bed, SI33, SI56, Repealed, now introduce SI133, SI156 take the economy from sick to coma in ICU, Repeal again introduce SI233 and SI256 and go straight from Icu to leopards hill memorial park.
President. Never a satanist to rule Zambia. Twakana please mr satana go awayfar from Zambia, and look elsewhere.
So Zambia is basically borrowing to fund consumption! Disaster! I think the kwacha should be allowed to find its true value. Me thinks it was grossly overvalued. Zambia hardly produces anything and its imports way exceed its exports.
You cannot also keep the announcement quiet and secrete It must be announced as a positive measure to support transparent honest and fair markets
We only hope the 120 USD is recouped on some interbank back to the treasuries in due course and some gains sold and bought on those spreads recorded
Really the square should be on bank forex window and SYSTEM trading by forex vendors avoiding dark rooms and parallel trading under the cover to ensure may be the offloaded smoothened Back to treasuries but even then the effect will be short term
Its will be up to Financial Market Supervision and Monitory to ensure the effective but that should be…
Infact to distinguish trades form speculation ,the announcement could have the effect reflect and create the expectation to hot or even see the pressure on kwacha on the CHALK boards quotations ONE WAY quotation fail to some basis points Then avoid cancelling purchases for CROSS rates purchases to ensure the KWACHA gains some momentum
@Mwalimu the truth is PF and Lungu have failed let them resign and allow other Zambians to take over and offer solutions.No matter how you try to defend Lungu it will not wake.It is like expecting water from a stone.
NO I AGREE THE PRESSURE IS HUGE AND IF MANAGED IT REVEALS TRUE MARK OF LEADERSHIP , BUT DUMPING SENTIMENTS MAKE IT WORSE IF ERROR IS DONE YOU WORK TO RECTIFY AND LIGHT
IT REQUIRES MAN HOURS BUT SIMPLE TO TACKLE IF WELL THOUGHT WILL IMMEDIATE IMPACT WITHOUT NECESSARY USE OF VALUE SOMETIMES ADMINISTRATIVELY WELL THOUGHT OUT INTERVENTION STRATERGIES WITHOUT THROWING GOOD MONEY FOR BAD
BUT THE OTHER PRONOUCEMENT ON DIRECTIVELY WAS WELL CRAFTED EXCEPT FOR THIS 120 USD
I like Richard Nixon ONE state of union address that set the first fiat money as we know it as the first Gold standard Here is the quote”
Address to the Nation Outlining a New Economic Policy: “The Challenge of Peace.”
August 15, 1971
Public Papers of the Presidents
Richard Nixon1971
Richard Nixon
1971
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District of Columbia
Washington
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Good evening:
I have addressed the Nation a number of times over the past 2 years on the…
Address to the Nation Outlining a New Economic Policy: “The Challenge of Peace.”
August 15, 1971
Public Papers of the Presidents
Richard Nixon1971
Richard Nixon
1971
Location:
District of Columbia
Washington
Font Size:
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Print
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Good evening:
I have addressed the Nation a number of times over the past 2 years on the problems of ending a war. Because of the progress we have made toward achieving that goal, this Sunday evening is an appropriate time for us to turn our attention to the challenges…
America today has the best opportunity in this century to achieve two of its greatest ideals: to bring about a full generation of peace, and to create a new prosperity without war.
This not only requires bold leadership ready to take bold action–it calls forth the greatness in a great people.
Prosperity without war requires action on three fronts: We must create more and better jobs; we must stop the rise in the cost of living; we must protect the dollar from the attacks of international money speculators.
We are going to take that action–not timidly, not half-heartedly, and not in piecemeal fashion. We are going to move forward to the new prosperity without war as befits a great people–all together, and along a broad front.
The time has come for a new economic policy…
The time has come for a new economic policy for the United States. Its targets are unemployment, inflation, and international speculation. And this is how we are going to attack those targets.
First, on the subject of jobs. We all know why we have an unemployment problem. Two million workers have been released from the Armed Forces and defense plants because of our success in winding down the war in Vietnam. Putting those people back to work is one of the challenges of peace, and we have begun to make progress. Our unemployment rate today is below the average of the 4 peacetime years of the 1960’s.
But we can and we must do better than that.
The time has come for American industry, which has produced more jobs at higher real wages than any other industrial system in history,…
But we can and we must do better than that.
The time has come for American industry, which has produced more jobs at higher real wages than any other industrial system in history, to embark on a bold program of new investment in production for peace.
To give that system a powerful new stimulus, I shall ask the Congress, when it reconvenes after its summer recess, to consider as its first priority the enactment of the Job Development Act of 1971.
I will propose to provide the strongest short term incentive in our history to invest in new machinery and equipment that will create new jobs for Americans: a 10 percent Job Development Credit for 1 year, effective as of today, with a 5 percent credit after August 15, 1972. This tax credit for investment in new equipment will not only…
Second, I will propose to repeal the 7 percent excise tax on automobiles, effective today. This will mean a reduction in price of about $200 per car. I shall insist that the American auto industry pass this tax reduction on to the nearly 8 million customers who are buying automobiles this year. Lower prices will mean that more people will be able to afford new cars, and every additional 100,000 cars sold means 25,000 new jobs.
Third, I propose to speed up the personal income tax exemptions scheduled for January 1, 1973, to January i, 1972-so that taxpayers can deduct an extra $50 for each exemption 1 year earlier than planned. This increase in consumer spending power will provide a strong boost to the economy in general and to employment in particular.
The tax reductions I am…
The tax reductions I am recommending, together with this broad upturn of the economy which has taken place in the first half of this year, will move us strongly forward toward a goal this Nation has not reached since 1956, 15 years ago: prosperity with full employment in peacetime.
Looking to the future, I have directed the Secretary of the Treasury to recommend to the Congress in January new tax proposals for stimulating research and development of new industries and new techniques to help provide the 20 million new jobs that America needs for the young people who will be coming into the job market in the next decade.
To offset the loss of revenue from these tax cuts which directly stimulate new jobs, I have ordered today a $4.7 billion cut in Federal spending.
Tax cuts to…
To offset the loss of revenue from these tax cuts which directly stimulate new jobs, I have ordered today a $4.7 billion cut in Federal spending.
Tax cuts to stimulate employment must be matched by spending cuts to restrain inflation. To check the rise in the cost of Government, I have ordered a postponement of pay raises and a 5 percent cut in Government personnel.
I have ordered a 10 percent cut in foreign economic aid.
In addition, since the Congress has already delayed action on two of the great initiatives of this Administration, I will ask Congress to amend my proposals to postpone the implementation of revenue sharing for 3 months and welfare reform for 1 year.
In this way, I am reordering our budget priorities so as to concentrate more on achieving our goal of full…
In this way, I am reordering our budget priorities so as to concentrate more on achieving our goal of full employment.
The second indispensable element of the new prosperity is to stop the rise in the cost of living.
One of the cruelest legacies of the artificial prosperity produced by war is inflation. Inflation robs every American, every one of you. The 20 million who are retired and living on fixed incomes–they are particularly hard hit. Homemakers find it harder than ever to balance the family budget. And 80 million American wage earners have been on a treadmill. For example, in the 4 war years between 1965 and 1969, your wage increases were completely eaten up by price increases. Your paychecks were higher, but you were no better off.
We have made progress against the rise in the cost of living. From the high point of 6 percent a year in 1969, the rise in consumer prices has been cut to 4 percent in the first half of 1971. But just as is the case in our fight against unemployment, we can and we must do better than that.
The time has come for decisive action-action that will break the vicious circle of spiraling prices and costs.
I am today ordering a freeze on all prices and wages throughout the United States for a period of 90 days.1 In addition, I call upon corporations to extend the wage-price freeze to all dividends.
Executive Order 11615.
I have today appointed a Cost of Living Council within the Government? I have directed this Council to work with leaders of labor and business to set up the proper mechanism for achieving continued price and wage stability after the 90-day freeze is over.
Let me emphasize two characteristics of this action: First, it is temporary. To put the strong, vigorous American economy into a permanent straitjacket would lock in unfairness; it would stifle the expansion of our free enterprise system. And second, while the wage-price freeze will be backed by Government sanctions, if necessary, it will not be accompanied by the establishment of a huge price control bureaucracy. I am relying on the voluntary cooperation of all Americans-each one of you: workers,…
Working together, we will break the back of inflation, and we will do it without the mandatory wage and price controls that crush economic and personal freedom.
The third indispensable element in building the new prosperity is closely related to creating new jobs and halting inflation. We must protect the position of the American dollar as a pillar of monetary stability around the world.
In the past 7 years, there has been an average of one international monetary crisis every year. Now who gains from these crises? Not the workingman; not the investor; not the real producers of wealth. The gainers are the international money speculators. Because they thrive on crises, they help to create them
In recent weeks, the speculators have been waging an all-out war on the American dollar. The strength of a nation’s currency is based on the strength of that nation’s economy–and the American economy is by far the strongest in the world. Accordingly, I have directed the Secretary of the Treasury to take the action necessary to defend the dollar against the speculators.
I have directed Secretary Connally to suspend temporarily the convertibility of the dollar into gold or other reserve assets, except in amounts and conditions determined to be in the interest of monetary stability and in the best interests of the United States.
Now, what is this action–which is very technical–what does it mean for you?
Let me lay to rest the bugaboo of what is called devaluation.
If you want to buy a foreign car or take a trip abroad, market conditions may cause your dollar to buy slightly less. But if you are among the overwhelming majority of Americans who buy American-made products in America, your dollar will be worth just as much tomorrow as it is today.
The effect of this action, in other words, will be to stabilize the dollar.
Now, this action will not win us any friends among the international money traders. But our primary concern is with the American workers, and with fair competition around the world.
To our friends abroad, including the many responsible members of the international banking community who are dedicated to stability and the flow of trade, I give this assurance: The United States has always been, and will continue to be, a forward-looking and trustworthy trading partner. In full cooperation with the International Monetary Fund and those who trade with us, we will press for the necessary reforms to set up an urgently needed new international monetary system. Stability and equal treatment is in everybody’s best interest. I am determined that the American dollar must never again be a hostage in the hands of international speculators.
I am taking one further step to protect the dollar, to improve our balance of payments, and to increase jobs for Americans. As a temporary measure, I am today imposing an additional tax of 10 percent on goods imported into the United States.2 This is a better solution for international trade than direct controls on the amount of imports.
This import tax is a temporary action. It isn’t directed against any other country. It is an action to make certain that American products will not be at a disadvantage because of unfair exchange rates. When the unfair treatment is ended, the import tax will end as well.
As a result of these actions, the product of American labor will be more competitive, and the unfair edge that some of our foreign competition has will be removed. This is a major reason why our trade balance has eroded over the past 15 years. At the end of World War II the economies of the major industrial nations of Europe and Asia were shattered. To help them get on their feet and to protect their freedom, the United States has provided over the past 25 years $143 billion in foreign aid. That was the right thing for us to do.
Today, largely with our help, they have regained their vitality. They have become our strong competitors, and we welcome their success. But now that other nations are economically strong, the time has come for them to bear their fair share of the burden of…
share of the burden of defending freedom around the world. The time has come for exchange rates to be set straight and for the major nations to compete as equals. There is no longer any need for the United States to compete with one hand tied behind her back.
The range of actions I have taken and 2 Proclamation 4074. proposed tonight–on the job front, on the inflation front, on the monetary front is the most comprehensive new economic policy to be undertaken in this Nation in four decades.
We are fortunate to live in a nation with an economic system capable of producing for its people the highest standard of living in the world; a system flexible enough to change its ways dramatically when circumstances call for change; and, most important, a system resourceful enough to produce…
prosperity with freedom and opportunity unmatched in the history of nations.
The purposes of the Government actions I have announced tonight are to lay the basis for renewed confidence, to make it possible for us to compete fairly with the rest of the world, to open the door to new prosperity.
But government, with all of its powers, does not hold the key to the success of a people. That key, my fellow Americans, is in your hands.
A nation, like a person, has to have a certain inner drive in order to succeed. In economic affairs, that inner drive is called the competitive spirit.
Every action I have taken tonight is designed to nurture and stimulate that competitive spirit, to help us snap out of the self-doubt, the self-disparagement that saps our energy and erodes our…
Every action I have taken tonight is designed to nurture and stimulate that competitive spirit, to help us snap out of the self-doubt, the self-disparagement that saps our energy and erodes our confidence in ourselves.
Whether this Nation stays number one in the world’s economy or resigns itself to second, third, or fourth place; whether we as a people have faith in ourselves, or lose that faith; whether we hold fast to the strength that makes peace and freedom possible in this world, or lose our grip–all that depends on you, on your competitive spirit, your sense of personal destiny, your pride in your country and in yourself.
HE CONCLUDES WITH A CLASSIC MOTIVATION AS ;
Two hundred years ago a man wrote in his diary these words: “Many thinking people believe America has seen its best days.” That was written in 1775, just before the American Revolution–the dawn of the most exciting era in the history of man. And today we hear the echoes of those voices, preaching a gospel of gloom and defeat, saying the same thing: “We have seen our best days.”
I say, let Americans reply: “Our best days lie ahead.”
AS you read this wonderful President Nixon as the first man who sold the world fiat money ,please understand and appreciate the cycle in the American economy at this time and the difficult policy decisions that had to be made similar to current Zambia’s scenario and see the conclusion for future Zambian economy to current scenario faced and decisions but first pay attention to the resolute and resolve by Nixon
IF YOU THROW IN SUCH KIND OF MONEY………DO YOU GET some profit at the end of the day? But what is going now Mr. President? You do not need to go to school to see that this is a wrong move. This move is not sustainable!!!