Liquidity crunch hits market after election overspending

Southern Africa Cross Border Traders Association SACBTA […]

Southern Africa Cross Border Traders Association SACBTA Secretary General Jacob Makambwe has emphasized the need for the country to shift from a foreign exchange-dependent economy.

\Speaking in an interview with Zambian Business Times, ZBT Makambwe noted that even though the 1% depreciation of the kwacha against the US dollar has minimal impact on the economy, the country needs to strike a balance in the money market.

 “We need to have an economy that is not going to be dependent on how the exchange rate is doing but rather have an economy that should balance what happens in the money market because whatever happens in the money market depends on the out-in flow of currency in business activities within the country,” said Makambwe.

He added that part of the reason behind the depreciation of the kwacha is due to the central bank losing liquidity due to the election activities.

 “As you know, we are coming from an election period, and much of the impact on the foreign exchange depreciation might be attributed to the central bank losing In terms of allowing the flow of currency or liquidity, so that it can cater for election activities that were witnessed,” said He observed that following the conclusion of the election the country now needs to experience real economic growth in all sectors.

“We now need to see the real economic growth where government priorities are even as we look forward to the 2027 national budget; government needs to address the major issues of growing the economy by investing in sectors and people for meaningful growth,” said Makambwe.

He added that for the country to attain sustainable economic growth, individuals need to have access to financing to be able to contribute to the economy. “For the country to achieve sustainable economic growth, businesses and individuals need to have access to financing and productive resources such as electricity, water, and land to be able to have an input into this particular economy,” said Makambwe.

Article by Justine Phiri