New Kwacha Notes: No Inflation, Just a Strategic Currency Reset – Jito Kayumba

New Kwacha Notes: No Inflation, Just a Strategic Currency Reset – Jito Kayumba

Lusaka, Zambia – April 21, 2025

Presidential Economic Advisor Jito Kayumba has assured Zambians that the newly rolled-out Kwacha banknotes are part of a carefully managed currency replacement exercise that will have no impact on inflation or the country’s money supply.

Speaking in Lusaka on Monday, Kayumba explained that the new notes are simply replacing the existing ones in circulation. He was quick to clarify that this is not an expansion of money in the economy, but a direct swap—meaning the total value of money in circulation remains unchanged.

“This currency change is essentially a swap. It replaces the existing notes, not adds to them. Therefore, there’s no effect on inflation,” Kayumba said. “If new money had been injected on top of what is already circulating, then it would have raised the total money supply without matching economic growth. But that’s not the case here.”

The new Kwacha notes have already entered circulation, introduced by the Bank of Zambia with improved security features and enhanced durability. While the physical design of the notes is new, what remains steady is their value and role within the monetary system—an important distinction in a climate where inflation remains a key concern for households and businesses alike.

Kayumba also highlighted that this move is aligned with a broader shift in policy being championed by the Ministry of Finance and the Bank of Zambia. The upcoming changes will see the Kwacha reinforced as the sole legal tender for all domestic transactions. According to him, this step is critical in addressing the longstanding issue of dollarization within the Zambian economy, where the use of foreign currencies—particularly the US dollar—has often undermined the strength and relevance of the Kwacha in local markets.

“There will be restrictions on the use of foreign currency for local transactions,” he said. “This will reduce demand for forex and help support the Kwacha’s strength.”

For years, sectors such as real estate, mining, and luxury retail have conducted a significant number of transactions in foreign currency. The planned tightening of legal tender regulations is expected to gradually shift this behaviour, increasing confidence and demand for the Kwacha in the process.

The government’s economic team has been working on several macroeconomic strategies to stabilize and strengthen the national economy. From fiscal discipline to debt restructuring and domestic revenue mobilization, there is a concerted effort to rebuild trust and resilience. The introduction of the new banknotes, although largely symbolic in appearance, plays a functional role in this larger picture.

Jito Kayumba’s message is clear: there is no cause for alarm. The new banknotes do not represent a change in economic fundamentals, nor do they threaten price stability. Instead, they mark a moment of modernization, national pride, and policy clarity—reaffirming the Kwacha’s role at the heart of Zambia’s economy.

As the country moves forward, the success of this transition will depend on clear communication, consistent implementation, and a collective belief in the strength of the nation’s currency. For now, Zambians can rest assured that the change in notes is not a disruption, but a thoughtful renewal.