Tonse Alliance and National Reconciliation Party for […]

Tonse Alliance and National Reconciliation Party for Unity and Prosperity – NRPUP Presidential candidate Brian Mundubile’s call to prioritize citizens’ welfare over holding of about US$6.5 billion in foreign exchange reserves by the Zambia Government has raised one of the biggest economic debates as the country approaches the 13 August 2026 general elections.

Speaking during a campaign rally in Nyimba District of Eastern Province, Mundubile who has now emerged the the Opposition’s front runner questioned the value of growing and holding huge amounts of cash in reserves while ordinary Zambians continue struggling with high living costs and living in squalor.

“Our focus will be on Zambians, we won’t prioritize reserves, that will come later on but first let the Zambians get full, the issue of nshima and mealie meal first,” he said.

Meanwhile, responding to Mundubile’s remarks in a statement seen by the Zambian Business Times – ZBT, former Finance Minister and ruling UPND Parliamentary candidate in Western Province, Dr. Situmbeko Musokotwane argued that foreign exchange reserves are a country’s first line of defence.

“His latest statements about foreign exchange reserves and inflation is like a medical doctor who tells the patients that the readings of their blood pressure, blood sugar and body temperature are not important,” said

Dr. Musokotwane.However, former Patriots of Economic Progress – PeP President & now aspiring Roma Constituency Independent Parliamentary candidate, Sean Tembo countered that reserves alone cannot create prosperity.

“Foreign reserves are to a country what savings are to individuals, however, savings are not an end in themselves because you cannot grow your wealth through savings,” said Tembo.

Musokotwane further warned that rapidly spending the reserves would expose Zambia to severe currency instability, stating that if Mundubile comes to implement his ideas of quickly spending the reserves, it will not take long before the exchange rate gets to K40 per US dollar.

Meanwhile, Tembo dismissed that argument by claiming that much of the reserve money is sitting in foreign banks instead of supporting local businesses, saying that when Zambia deposits US$6.5 billion in New York banks, what we are basically doing is creating jobs for US citizens at the expense of Zambian citizens.

The former Finance Minister explained that reserves exist to guarantee uninterrupted imports during global crises, saying that when the reserves are adequate, imports can be paid for without creating shortages as was the case in the 1990s.

However, Tembo argued that he would rather redirect almost half of those reserves into productive investment.”If I was Zambia’s Minister of Finance, I would rather use US$3 billion of that money to set up a local Development Finance Institution which would extend reasonably priced finance to the local private sector,” he said.

Musokotwane also pointed to ongoing global fuel supply disruptions as evidence that strong reserves protect ordinary citizens, saying Zambia has avoided serious shortages because it has adequate foreign exchange reserves to absorb external shocks.

Meanwhile, Tembo maintained that the country’s reserves paint an incomplete picture because government continues accumulating un-paid obligations, stating that the government has been failing to settle its financial obligations for goods and services supplied by the private sector while domestic arrears have continued rising.

Just the raise in domestic arrears has been massive leaving most local suppliers businesses destroyed.

Using a household analogy, Dr. Musokotwane indicated that a family usually grows enough food which they store in their granary, and for the wise family, the granary must never be allowed to become empty stating that the same applies to foreign exchange reserves.

However, Tembo countered with his own household analogy, arguing that at personal level, your savings would only be real if you are able to settle your liabilities adding that the money might exist in your savings account, but it is a fallacy because you are basically insolvent.

Dr. Musokotwane went even further by questioning Mundubile’s understanding of economic management, saying his statements demonstrate that he has no clue about even the basic things that are required to make a country prosper, and to the contrary the country will run aground under his leadership.

Meanwhile, Tembo questioned whether the reserves should be celebrated at all.”The current Government has borrowed a total of US$18.1 billion and increased foreign reserves by US$3.5 billion, is that a commendable job? I don’t think it is because Zambia’s US$6.5 billion foreign reserves are not necessarily evidence of good economic management,” he said.

The discussion about the US$6.5 billion reserves has become far more than an economic statistic because they now represent two competing campaign messages, with Dr. Musokotwane arguing that the money is Zambia’s insurance against future shocks while Tembo believes part of it should be unlocked immediately to finance domestic production, settle obligations and stimulate jobs creation.

Now, as Zambians head to the polls on 12 August, should the country protect its reserves for tomorrow, or spend part of them to ease the economic pain being felt by citizens today?

Article by Phillip Sinkala