An economist has urged the Bank of Zambia to offload 25 million dollars on the Zambian market as a measure to cushion the continued depreciation of the local currency.
Mr. Chibamba Kanyama said offloading the dollars on the Zambian markets will help to stabilize the exchange rate which has seen the local currency continue to depreciate against major currencies.
He said the central bank has an obligation to ensure that the exchange rate is stable. Mr. Kanyama, however, attributes the instability of the Kwacha to international companies who are declaring their dividends abroad.
He said once they declare their dividends abroad, this result in the dollar becoming scarce in the country. He told QFM that most international companies especially the mines use this period between March and April to declare dividends abroad.
Mr. Kanyama added that most companies dealing in dollars are holding the currency in anticipation of the world cup which kicks up in next month in South Africa.
He said the companies are anticipating that most Zambians will go to the world cup making the dollar to be on high demand
QFM
This Guy again? Please, don’t we have real economist in Zambia at UNZA, CBU or Ministry of Finannce for the media to ask for comments? This guy with his Chibuku Tarven statements is embarrasing us? Am sure the people at BOZ are laughging their heads off.
Where has this guy been? Under the rock? He calls himself an economist and does not know what has been happening to the euro? And what the dollar has been doing with all major/emerging currencies? Has he not seen what has been happening to all resource stocks on all exchanges around the world? Hasn’t he been seeing what has been happeining to our copper prices due to the strengthing of the dollar?
At least being near SA, has he not seen how the rand has been volatile has weakened against the Dollar?
TBC..
ctd #1
Only the Yen has strengthened becoz of the unwinding of a carry trade in motion there. And his suggestion to BOZ is buy more Kwacha with the Dollar!! How shallow can you surely get?
And his reasoning, companies are paying dividends, haven’t they been doing this every year? And major companies in ZED have operations elsewhere and why would they drain Zambian cash for dividends.
And another stupid reason, dollars because of the world cup!! How many people in Zambia change Kwacha into dollar when going to South Africa? All exchange rates have commissions and why would one want to change from Kwacha to Dollar and to Rand when they could easily change straihgt to Rand.
Even a Kaponya from Katondo knows better about currencies than this guy. He is embarrassing us.
#ctd 3
And how did he come up with $25m dollars tag. Another Chibuku Tavern so called ball pack figure? It is shocking that we have an economist who is out of touch with world events and still think Zambia is a country under a rock and he is the only one asked to go out there and gather information and give an expert opinion. Every economist, or investor knows that the risk appetite trade is off the table till there is clarity on the euro, and everybody around the world have been pouring money into safe havens like US treasuries and hence huge demand for the dollar. I wish this Mr Kanyama can provide data about his deduction that dividends pay depreciate the Kwacha and also show how that has been stabilized in the past before recommending this crap.
1 and 2 i totally agree with you. The economic unstability of the Euro has had an impact on the strength of the kwacha. This Chibamba actually is not an economist…..which school did he do it from, that guy did mass com and an MBA . Right now the British dont want to have anything to do with the Euro lesson learnt for Africas quest for regional integration has shown that instability i one country in this case Greece has had an economic huge imapact on the Euro. The had to bail it high because currently they are having huge benefits i exports. This Chibamba should have told us the impact of the devaluation esp on exports and compare it to the beneits forgone as a result of the devaluation. i find his reasoning strange!!!!
#1-3, I am inclined to agree with a lot of the issues you raise against Chibamba’s analysis but I do not agree with you saying the strengthened dollar is affecting or emerging market currencies the same. I know for a fact that the the SA rand has appreciated of late to extent that it hurting the South African export market. Contrary to your assertion, the rand has not weakened against the dollar but actually strengthened leading me to wonder what else in your analysis may be flawed
Mr kabamba please keep Zee. You are very shallow mr
Warning to Journalist: Please note that Chibamba Kanyama is not an Economist even if he masquerade as Economist. His CV clearly shows that he has never majored in Economics anywhere in this world. Merely commenting on economic issues does not make one be an economist. His normative comments on economic issues all the time clearly showz Chibamba does not even understand econometrics. So for comments on economic issues, journalists pls see Economists at BOZ, UNZA, MOFNP, or any qualified economist. We economists in Zambia we dont know this guyz called Chibamba.
Imwe naimwe! Being an economist is not about majoring in economics. Why do you like hating? An economics could have majored in Chemistry or History but practices economics. Even the people who majored in economics struggle with proper analysis and yet you are discounting real analysis. Yaba!
shallow reporting. and when the 25M runs out then what? fiscal policies would be more controllable BUT the fact is the kwacha is over valued and govt has been keeping it from going over the 5000 psychologocal barrier.
Yeah that\’s what I\’m tkailng about baby–nice work!
#7 You are wrong. He may not have said what is in line with the truth but he has enough credentials. Check his CV. You are behind on such updates.
A to the people . Do u know that to the un economists and those who may not see what we have seen Chibamba has actually told the nation the truth. By the way not be surprised if the post have this in their tabloid.
Please do us a favour correct us when we run into such issues. We may have a wide understanding of issues but not a deeper understanding. This should not refuse us from commenting but lets have the right facts before we embarrass ourselves.
challenge to all economists in Zambia…u remain still and let non economists talk at length on issues they may not properly understand. It should not always be Pro Saasa or Prof Seshamani o this unza man whose formed a new party Dr Mwikisa……..or even the boz people we all have to provide knowledge. So far the inflation has been around…
You can call Chibamba all kinds of names Dear economist ,at least he is down to earth. He keeps the fire burning here and he is very practical in his approach to our local economy here than your Unza theorist .Did you know that Chibamba has put 3000 youth in one place trying to teach entrepreneurship in them. I know many wanted him to equate the loss of kwacha to the Greek crisis. No that has a small percentage effect to Zambia.
Surely QFM could have found a better interviewee on this subject.
ENOUGH! enough attack on Chibamba Kanyama. You so called economists have no alternatives except critcism.
#5 Beginning of the month the Rand was 7.35 treding towards the 7.00 barrier, but today it is 7.88 going towards 8.00 if you look at the Rand/Dollar chart for the month you will see the correlation with the Euro crisis.
#11 Nobody is calling Chibamba names here. He is just plain wrong in his analysis. I will tell you how the Greek problem will affect you. EU is one of our biggest trading partners of non ferrous commodities, like Sugar flowers etc. With no credit extension in the Euro Zone, Zambia stands to lose demands of its products from the Euro Zone, Even China which sells its product to the Euro Zone is concerned and if China is affected, expect that to trickle down to Zambia and for you to say the problem in Greece is small is crazy
#13 I have offered alternative reason why the Kwacha is tanking, you you and your hero Chibamba Kanyama rebut the reasons I have advanced. Let us debate.
#11 by the way teaching 3000 youths entrepreneurship does not give one to put false analysis on the world stage without getting challenged. Welcome to the 21st century. Our GBM, President Sata and even the great Willie Nsanda have created more opportunities for Zambians than your Chibamba has , and that does not make every statement they make gospel truth. Learn to be objective
The issue here is peddling falsehood just because you are a so called expert. Chibamba is a good man and a Born Again man for that matter. So he is a nice fellow, but his analysis here is wrong and I hope he admits that.
We have heard nothing from Zambia’s high commissioner to Ghana where the host country will start pumping oil this year worth . Is he aware of the business opportunities in the newly discovered oil and gas industry in Ghana? Our High Commissioners and Ambassadors must understand they are not on holiday but to help Zambia maximize her economic potential.
True PF Cadre. don’t offer your so called alternatives on the blog, have them published. Let us read about them. At least for Chibamba we are able read about whatever he says in publications. You are just a cadre.
brother K the Australian dollar has also lost value against the US Dollar what is your advice to Kevin Rudd and company.Brother i think you you more of a speculator than an economist.Speculators can be very dangerous to the economy they just talk to cause panic in the market so that they can make money.
@ 17 for you to counter True PF Cadre means he has published, else youwould not have read. Zambia One, you have an amazing IQ. To publish, means to formally make public.
Arm chair critics economists. Whos said if you never majored in economics at undergraduate you can not do economics at postgraduate level. If you have failed to make a name for yourself like Chibamba Kanyama. Get back to the drawing board to see how your undergraduate economics majoring show help make you tick. Viva Chibamba. You are an economists for your CV indicates as such.
1 and 2 True PF Cadre please spare us the lessons about the non existent relationship between the Kwacha and the Euro. My dear if the Kwacha continues to slide the Zambian exporters of the non-ferrous metals are the ones who are going to be smilling big time. It is actually a very welcome relief to them. Only importers will be complaining. Second the British who you say dont want anything to do with the Euro are actually worried stiff. 50% of British exports are to the Euro Zone. And if the Euro continues to slide British export merchandise will be very uncompetitive. The only country that would otherwise gain from the Euro slide is Germany whose 40% of GDP is geared to exports. The USA also does not want a weak Euro because its exports will become uncompetitive.
Mr Chibamba’s analysis of our depreciating currency may be found to be faulty by some but lets not take away what the man has achieved through his hard work.What’s wrong with us Zambians kanshi? Can’t we just present our alternative views without pulling down those whose views are contrary to ours?
I just checked his website to ascertain his qualifications to comment on economic/financial matters and I saw that the man is qualified enough.Even with his B.Mass Comm degree alone he stands qualified to comment on the issue at hand.By the way,he is an MSc holder and not an MBA.
See my next posting for what I found on his website:
Academic Profile
Education and Qualifications
2000 – 2001 University of Reading (Chavening Scholar) – M.Sc Development Finance
Course Included:
Corporate Finance,
Financial Markets
Corporate Governance
Financial markets
Financial Regulation
Development Finance
Data in Development(with distinction)
Political Economy for Development
Investment Banking
Dissertation (Graded with Distinction)
Foreign Direct Investment in the Southern African Development Community
Risks and Opportunities.
1985 – 1989 University of Zambia – B.A. Degree Mass Communication
Courses included:
Advertising
Introduction to Economics
Economic Theory
Zambia Money
Banking and Public Finance
Development Economics
Quantitative Studies
International Economics
For starters before I am called names, I am not an Economist, I am an Engineer-Chemical Engineer for 35 years, I can only confirm my Industrial experience in Zambia and abroad and the little Economics for Engineers in post doctorial work. That said, I know for sure Economics is not a science it is just data and guess work. If economic theory was a science it could have predicted the Global Economic meltdown. I also know that Only Fools Believe in Data Alone and this includes most scientific data. The Zambian Kwacha has depreciated. I have noticed with awe the BOZ Governor, Traders and pundits are talking about trouble in Europe being the major cause. According to the Reuters report, the sell-off came after Germany banned naked short selling. Those Germans! Always the party poopers. We may…
We may say…But…
But when markets are ready to roll over, they’ll do so. Commentators and analysts can look for the ’cause,’ but they are just making noise.
Still, we suggest that they take their eyes off the naked Germans and Greeks. Instead, they might want to take a look at what is going on right here in Zambia…
GRZ increased wages by 25% across board. ZRA Unionised workers are on go slow they want 25% too. The Zambia National Farmers Union wants more for the bag of Maize may be another 20%. Unfortunately we have made it government business to buy maize in this country just as we have allowed Government to socialise the Petroleum sector where it buys and fixes prices in a capitalist economy. The question is where will Government get all this money from? Government…
You guys should stop wallowing in self quarantines of Economist or whatever. Who classifies anyone as an economist or journalist or Teacher or whatever? Some of you are envious that you are not quoted as economists yet Chibamba is always quoted as such. You think by applying invisible distance between you and Chibamba then you can be recognised as economists? Chibamba has done economics so he can be called an economist. Abash Zambia’s growing PHDs!
Government can’t create Kwacha from thin air to be able to meet all these ever increasing kwacha and dollar expenses. Look at it this way, if Government increases wages by 25% per month, annualized it means they need to find additional 300% Kwacha’s per year on year. Definitely something has to give in. Government has two choices keep a strong kwacha for the dollars that it produces or devalue the Kwacha by printing more of it for the same value of dollars it has available. Mr. Chibamba Kanyama suggests reverse order economics-Government to pump more dollars for a strong Kwacha the only problem with this is current production does not produce enough dollars to make reverse order economics to work in this instance. The Mines can only produce a fixed amount of copper for dollars and the…
The Mines can only produce a fixed amount of copper for dollars and the more copper they produce the more dollars they will consume; the non traditional exporters are down and the more flowers and vegetables they produce for export the more dollars they will consume. Basically we need to produce more things for dollars that will require less dollars to produce them then we shall have dollar surpluses. That’s why I still have doubts about this theory of more money from thin air in our pockets, less taxes, more jobs… does it make any sense really?
#24, Economics is a social science. End of story.
By claiming to be an engineer, you disqualified yourself from defining Economics.
UBUTUTU MULEKE!
I know the outfit at MoFED, the bulk of people called economists there are not qualified to even carry the title. They were grandfathered into positions of economist. There are only three individuals who are truly economists. The rest are CK type, economists by title only. If you wonder why our government fails to effectively implement economic policies, it largely due to whose advice it feeds on.
And let’s be fair to CK, he read Mass Com and Development Finance. Those who conferred upon him these degrees did not admit him to the degree of Economics, entitling him all the rights and honors thereto appertaining, but to the degrees particularly stated.
Write or wrong but that’s where the criticisms are emanating from.
UBUTUTU MULEKE!
#29, Agreed Whatever Ubututu Muleke means I guess its supposed to be a compliment! I am aware that today, millions of people do work in social science professionally, I am sure like you. Because human relationships and qualities are so very complex, in some fields there is no objective truth and much work is based on interpretation. What defines “truth” in social sciences is more often opinion than experimentally-verified fact, making findings from social science less reliable than those from the harder sciences. However, the social sciences are essential to human flourishing and progress, and will continue to be practiced and heavily invested in as long as civilization continues to exist.
Yaba, bavikwakwa aba nibavitala! Mmmmmmm mutalikana mwekamweka. Become engineers you won’t be quarreling like you do in economics.
#32 I agree… #24 seems to have missed my point. In fact, Economics has never been a particularly precise discipline, and its followers don’t tend to agree on much. You’ve got your traditional economists, your liberal economists, your Keynesians, Monetarists, neo-Keynesians, a few Game-theorists and some other assorted nutcases. All of these seem to take pride in disagreeing with each other, with the result being nothing short of complete confusion.
However, there is one thing all of this lot does agree on. Supply and Demand. Put simply, the core of the notion is that the price and quantity of an item being produced are determined by the amount supplied and the amount demanded. Seems pretty sensible – the cheaper an item is, the more people demand it, so the more you sell.
I’ve…
I’ve been having a think about this, and I’ve decided its rubbish. I wouldn’t buy a car for five Million Kwacha, because I’d assume there was something wrong with it. Charge fifty million for it, and I’d assume it was pretty amazing. Equally, call something limited edition (i.e. reduce supply of US Dollars) and everyone wants a piece. And that’s where I am coming from. And you can’t call this scientific thinking.
So here is our recession-busting tip for any Zambian Economists in trouble. Forget half-price offers and freebies, and forget trying to attract new audiences for the US Dollars available. Put out fewer products and charge more for them. Consumers will be queuing up for them, eager to get in on what will fast become a new status symbol.
Now economics does admit…
Now economics does admit that some products are indeed status symbols, and that you can get away with charging more for them. Rolls-Royces, S 600 Mercs, Hummer and houses in New Kasama and Suningdale are perfect examples. They argue that the reputation comes first, however before you can hike the price. I reckon it’s the other way around. Charge a bucket and people assume it’s worth it, especially in today’s world where reputations are made in an instant and everyone is keen to be seen at the cutting edge of fashion.
So there we are. BOZ should not introduce new dollars into the Zambian market say ‘we have limited edition dollars’ Soweto Marketers should have charged the same prices as Spur and Shoprite stores for their vegetables, fish, bread and so forth and everything would…
So there we are. BOZ should not introduce new dollars into the Zambian market say ‘we have limited edition dollars’ Soweto Marketers should have charged the same prices as Spur and Shoprite stores for their vegetables, fish, bread and so forth and everything would have been okay. I am just a simple Ubututu Muleke-whatever it means Engineer.
True PF cadre ulinshimbi boyi.Wakuchonga na red pen apa pena.For Chinyama awe no comment.
Am failing to follow Chibamba’s line of arguement clearly. This is for two main reasons.
First, are domestic factors the only factors driving depreciation of the Kwacha? The answer is for me is no! For instance, with the crisis in Greece, there has been a slight shift in investments from the Euro to the US and other emerging market.This could in part explain the stronger dollar.
Second, with regard to Chibamba’s recommendation, i greatly doubt that there is a significant realignment of the real exchange rate that would warrant such an intervention. The current volatility in the US Dollar Kwacha Exchange Rate is just a passing phase.
In sum, am extremely glad and confident that Dr Caleb Fundanga and the Bank of Zambia know what they are doing.
Never argue with an economist people may not notice the difference. UNZA sifts chaff and shuttles ifisoso to social sciences. UNZA puts gems (aba mano baaaad) in Natural Sciences – the natural home of Engineers and Pure Scientists.
Ubututu mwe baku fikwakwa muleke!
I agree with the assertions that economics is not a science and does not qualify as such. What is a science? Science is the concerted human effort to understand, or to understand better, the history of the natural world and how the natural world works, with observable physical evidence as the basis of that understanding1. It is done through observation of natural phenomena, and/or through experimentation that tries to simulate natural processes under controlled conditions. That said, does economics fall in this category? I dont think so. Dealing with data does not make a course a scienc but when u use the data to situated enivronment/ authentic aspect to prove the theories. Am sorry to say #24 is right
#33-36. There is only one Engineering, yes? Civil Engineering? Mechanical Engineering? Chemical Engineering? Mining Engineering? Does this make engineering an imprecise discipline? Come on, ba engineer!
Demand and Supply? Oh, pleeeeeease.
That only shows how much you don’t know.
Social science is used as an umbrella term to refer to a plurality of fields outside of the natural sciences. These fields include: anthropology, archaeology, economics, geography, history, linguistics, political science, sociology and, in certain contexts.
#40: You guys what schools do you attend?
Natural world, data, observable, physical evidence, experimentation in a controlled environment? Are you serious? You mean you can’t see that your statement is self contradictory?
Let me give you a lead:
1. Humans are an integral part of the natural world. Simply put, Economics is about human behavior.
2. It takes observations to collect data over time to conduct an experiment. This is how the Laws in Economics were arrived at.
3. Controlled environment. Now, this is where your are being disingenuous. Controlled environment is neither a prerequisite nor a conditionality of science. An absolute condition is being able to isolate the influence/effects of certain variables. Economists call this Ceteris Peribus.
UBUTUTU MULEKE!
#42 What are the constituents of natural science?
See there are a lot of misunderstanding one can bag from the Zambian ed system which is designed to show that some people are smarter than other. It is a stupid notion if you asked me. I have degrees in what is ignorantly referred to as natural sciences and business. There is nothing special about either, It is all depends on where one’s interests lie.
UBUTUTU MULEKE!
What about Gold? Zambia should invest in gold, it is stable and rising in value.
# Bugsy what have you got to showfor apart from your certificates?You may have an opinion but that is not the only opinion and certainly not the only right one!
#39 Some of us are Oxbridge educated.Does that make us inferior to your UNZA graduates?
#47: What do I have to show for? You don’t ask questions like that here. That’s just cheap!
Besides, who said mine was the only opinion and the only right one? When did an “opinion” acquire such attributes?
#39. Well said! The UNZA “ama natural science” mentality inflates some heads.What a waste!
UBUTUTU MULEKE!
#47 You did not read a natural science at Oxford/Cambridge. Deep down inside your heart you know that uli chisoso. Sorry but that’s just the way it is.
whats all this r u b b i s h talk?
If you put 20 economists in 1 room and ask them one single question, you will get 20 different responses.
Respect Mr. Kanyama’s form of analysis and argue him on points and not on personal issues.
#51: Is 20 the magical number? Or is it the ONE room?
Would your answers also explain why there 9 Justices in the Supreme Court?
Really I didn’t think people who have left campus life would continue with the s i l ly stigmatisation of each other’s fields of study because reality comes in after graduation and people then see their real potentials. For Engine (#39) to continue perpetuating childish nomenclatures like Ichikwakwa shows he is so insecure he wants society to acknowledge him but it isn’t. UNZA has no such philosophy of recruitment. People go to Natural Sciences because they did well in relevant subjects (Physics, Chemistry, Biology and Maths). Thats not to say they are more intelligent NO! When I was at Hone we had the s t u pi d tendencies of looking down upon Hotel & Catering students calling them waiters.
When we graduated, these guys were managers of big Hotels while some of us Radiologists and Lab technicians couldn’t find jobs. Reality came in and taught us lessons that I think Engine is still waiting to learn. I often meet people who tell everyone how they were always top of the class. Reality has not afforded them top of society rewards so they long for the good old days when they were acknowledged. Live on and show your true mettle.