ZAMBIA’S STRONGER KWACHA REFLECTS IMPROVED ECONOMIC FUNDAMENTALS – HAABAZOKA Economist Lubinda Haabazoka says Zambia’s economy is showing signs of sustained recovery, attributing the strengthening of the kwacha and declining inflation to improved management of the country’s macroeconomic fundamentals and prudent fiscal and monetary policies. Speaking during a live interview on Capital FM 99.7 with Esther […]

ZAMBIA’S STRONGER KWACHA REFLECTS IMPROVED ECONOMIC FUNDAMENTALS – HAABAZOKA

Economist Lubinda Haabazoka says Zambia’s economy is showing signs of sustained recovery, attributing the strengthening of the kwacha and declining inflation to improved management of the country’s macroeconomic fundamentals and prudent fiscal and monetary policies.

Speaking during a live interview on Capital FM 99.7 with Esther and Farai, Prof. Haabazoka said confidence in Zambia’s economy had increased significantly, as reflected by the country’s foreign exchange reserves, which now exceed US$6.5 billion

“Our economy is becoming stronger because we have built confidence in the management of Zambia’s macroeconomic fundamentals,” he said.

He explained that the sizeable foreign exchange reserves had strengthened the country’s ability to meet demand for foreign currency while preventing speculative manipulation of the exchange rate.

According to Prof. Haabazoka, the appreciation of the kwacha has already translated into greater purchasing power for consumers, particularly for imported goods.

He illustrated this by noting that an item costing US$1,000 now requires substantially fewer kwacha than it did when the exchange rate was much weaker.

“The appreciation of the kwacha is already making a difference,” he said.

The economist, however, acknowledged that many households were still struggling with the high cost of living despite the stronger currency.

He explained that inflation, which had previously exceeded 20 percent and reached about 24 percent at one stage, had steadily eroded the purchasing power of incomes over several years.

“The good news is that inflation has now fallen to around 6 percent,” Prof. Haabazoka said.

He added that households would fully recover their purchasing power through sustained wage growth above inflation and the continued appreciation of the local currency.

Prof. Haabazoka also urged businesses to pass on the benefits of the stronger exchange rate to consumers by reducing prices on imported goods.

“I also believe businesses must pass on the benefits of the stronger exchange rate to consumers,” he said.

On the country’s foreign exchange reserves, he stressed that they could not simply be spent through the national budget because the law strictly regulates how government can access them.

“We must never play with the country’s monetary system,” he warned.

Prof. Haabazoka further cautioned against making unrealistic economic promises, saying recovery required patience and responsible policymaking.

“Sustainable recovery can only be achieved through prudent fiscal and monetary management,” he said.