Kasaka ka Ndalama: The Hidden Fear Behind Zambia’s Currency Change

Kasaka ka Ndalama: The Hidden Fear Behind Zambia’s Currency Change

By Gerald Libati

The introduction of new banknotes in Zambia has ignited intense public debate, with opposition figures seizing the moment to push misleading narratives for political gain. Some critics claim this move signals reckless economic management, falsely equating currency replacement with uncontrolled money printing. However, it is crucial to separate economic reality from political rhetoric and understand the legitimate reasons behind this decision.

One of the most misleading claims made by the opposition is that introducing new banknotes is equivalent to printing money. In reality, printing money in an uncontrolled manner without a corresponding increase in production leads to inflation and currency devaluation. This is what the previous Patriotic Front (PF) government did, flooding the economy with excess kwacha, leading to a weaker currency and skyrocketing inflation. In contrast, replacing banknotes is a common monetary policy measure aimed at improving security features, curbing counterfeiting, and modernizing currency circulation. Countries worldwide periodically update their banknotes to enhance efficiency and ensure financial stability. The introduction of Zambia’s new banknotes falls within this standard practice and is not a scheme to print excessive money, as some opposition leaders suggest.

Under the PF administration, Zambia’s economy suffered severe setbacks due to reckless monetary policies. The previous government engaged in large-scale money printing to finance non-productive expenditures, leading to excess liquidity in the market. Without a corresponding increase in the production of goods and services, this resulted in high inflation and a sharp depreciation of the kwacha. During this period, Zambia experienced a weakened kwacha, skyrocketing inflation, and debt distress. These reckless financial decisions created an economic environment where the cost of living soared, and the kwacha lost value against major global currencies. The opposition’s attempt to criticize the current government’s economic policies without acknowledging their own role in Zambia’s financial downturn is not only hypocritical but also a deliberate effort to mislead the public.

A country’s currency strength is fundamentally tied to its Gross Domestic Product (GDP), the total value of goods and services produced. Printing money without increasing production simply dilutes the currency’s value, resulting in inflation. Conversely, economic stability and currency strength are achieved when a country focuses on growing its GDP through industrialization, trade, and investment. The United Party for National Development (UPND) government has taken a different approach, prioritizing fiscal discipline, increased production, and investor confidence. These measures are designed to gradually restore the strength of the kwacha by ensuring that the economy produces real value, rather than relying on artificial money supply increases.

The panic and misinformation spread by the opposition regarding new banknotes raise an important question: why are they so concerned? A possible explanation is that many of those criticizing the move may have hoarded illicitly acquired cash, fearing that their old money could become obsolete. The claim that the introduction of new banknotes is a corrupt scheme holds no weight, as currency redesign is a standard global practice. Moreover, opposition leaders are capitalizing on public misunderstanding of economic policies. By falsely equating new banknotes with inflationary money printing, they hope to stoke fear and erode confidence in the government. However, informed citizens must recognize that such tactics are merely attempts to score political points rather than offer genuine economic solutions.

Zambia is not the first country to introduce new banknotes, nor will it be the last. Around the world, governments regularly update their currency designs to enhance security, combat counterfeiting, and improve the efficiency of financial transactions. Countries such as the United States, the United Kingdom, and India have undertaken similar measures without causing economic turmoil. For example, the United Kingdom introduced polymer banknotes to enhance durability and security, India demonetized certain banknotes to curb black money and improve tax compliance, and Nigeria redesigned its currency to combat counterfeiting and encourage digital transactions. These cases demonstrate that currency updates are routine policy measures aimed at strengthening the financial system. Zambia’s decision to introduce new banknotes aligns with global best practices and should be viewed as a positive step toward economic modernization.

The introduction of new banknotes will bring several benefits to Zambia’s economy, including enhanced security, public confidence, and more efficient transactions. The new banknotes will feature images of Zambia’s animals, plants, and waterfalls, celebrating the country’s heritage. Additionally, the new currency will make counterfeiting more difficult and improve everyday spending by providing a more durable and easier-to-handle form of money. Those who hoard cash for illicit purposes will be compelled to bring it into the formal banking system, increasing transparency.

A major concern for the opposition revolves around the “Kasaka ka Ndalama,” a sack full of money. Their fear is not about the policy itself, but rather the fate of hidden stashes of cash that may still be buried in secret locations, much like how Hon. Austin Liato buried K2.1 million at his farm, only for it to be discovered and confiscated. The introduction of new banknotes forces those who hoarded large sums of cash, potentially obtained through illicit means, to reveal their wealth. The opposition’s concern is clear: what will happen to those who still have secret cash reserves? The dilemma is simple: either they declare and exchange their old banknotes, risking exposure, or lose their wealth when the old currency is phased out. This is a critical step in ensuring accountability and strengthening Zambia’s financial system.

The process of introducing new banknotes started in July 2021 when the Bank of Zambia (BoZ) Board approved the changes. A nationwide education campaign will soon be launched to help people understand the changes. The Ministry of Finance and National Planning will issue a Statutory Instrument (SI) to guide how people can exchange old banknotes and coins for the new ones. This will ensure a smooth transition to the new currency.

Zambia’s economic recovery will not happen overnight, but the government’s policies are laying the foundation for sustainable growth. By focusing on GDP expansion rather than reckless money printing, the kwacha will stabilize over time. History has shown that responsible monetary policies, coupled with production-driven economic growth, are the only paths to long-term financial stability. Instead of falling prey to political propaganda, Zambians must look at the broader picture. The introduction of new banknotes is a necessary step towards financial security, not a repeat of past mistakes. Unlike the PF’s era of reckless economic mismanagement, this government is implementing structured and calculated policies to foster stability and growth.

The opposition’s fear-mongering should not distract Zambians from the truth. The introduction of new banknotes is a responsible policy move aimed at strengthening the financial system. It is not an inflationary scheme, nor is it a political gimmick. Zambia has moved beyond the days of reckless money printing and economic sabotage. As the nation progresses, it is crucial for citizens to rely on facts rather than misinformation. The government remains committed to economic stability, growth, and financial security. By supporting policies that foster production, investment, and fiscal responsibility, Zambia will emerge stronger and more resilient. The path ahead is clear: a stable currency, a growing economy, and a prosperous future for all.