Zambian currency on the spotlight
By Staff Reporter
Last week, we looked at how the weak kwacha has affected Zambian entrepreneurs, specifically welders.
This week, we look at another group of entrepreneurs, the cross-border traders. Statistically, these would account for about 52 per cent of Zambian youths. And most of these have obtained high school education, while others are college and university graduates. Yet, in a country where unemployment levels are very high, most youths opt to trade. This means that the informal sector accommodates more Zambians than the formal sector.
And cross-border traders too have not been spared by the country’s weak currency, the kwacha. In my interaction with these humble citizens, I heard quite some moving sentiments.
‘’When I started cross-border business in 2000, the kwacha was far much stronger than it is now. I started by buying jeans trousers from Tanzania. That time if you carried US$2, 000 in your pockets it was enough money to come back with a lot of merchandise,’’ narrated 33-year-old Michael Sichizya.
‘’I even managed to buy a plot and build a house in Kabwata Site and Service after doing trips for four years. But now I have to struggle even to find dollars. And when we find them, they are too expensive to buy from the bureau de change. The exchange rate changes every day; you can’t predict it. And when you find dollars you need to have as much as $5,000 to $7, 000 for you to buy enough things for resale.’’
Victor Kapambwe, who deals in hardware, added his voice too. Like Sichizya, Kapambwe has also been caught up in this economic malaise. With his premises located in the central business district of Lusaka, Kapambwe has to contend with so many other costs.
‘’My shop is at town centre market right here in Lusaka. I used to go to Dubai for hardware material. After sometime my business grew and I started going to China. That time I could even pay rentals for my shop upfront by six months,’’ Kapambwe explained.
‘’ By then, I think in 2012, the kwacha was at just above 5, 000 to a dollar. At least we used to manage in giving our customers good prices. By then there were just a few of us dealing in hardware. But now we are forced to increase prices. And, also the fact that we are so many in this business, the sales have really gone down. People also don’t have money to buy hardware material. They have to choose between, for example, cement and food. So, it’s really difficult for us. I think the government should try to strengthen our currency.’’
Miriam Nyendwa, a dealer in beddings, expressed disgust at the government’s failure to strengthen the currency.
‘’I have been buying blankets from Botswana for the last 15 years. And it is from this business that I have supported my children in school. I have five children, two just graduated from college, but the other three are still in school,’’ she explained emotionally.
‘’I used to bring in sometimes 50 bales of blankets, but now I can’t manage. The [Botswana] Pula has become expensive because our kwacha is falling every day. So, blankets have become expensive to order, even to sell here. And when we explain these things to our customers they can’t understand; and you cannot blame them. I’m thinking of stopping this business, but I have not yet thought of what to do next.’’
These are certainly not the only affected enterprising citizens, there are others out there. According to experts, the government’s inconsistent policies have played a major role in weakening the currency, and, above all the economy. Whether there is hope for redemption is certainly doubtful. Nevertheless, we shall not preempt anything. Instead, we wait to hear from another business sector in the next article.