IF you bought the US Dollar 18 months ago when it was slightly pegged at K13.50 or thereabouts, then your investment has really done a good value in return sitting at approximately 62 percent outturn in profit margins, simply speaking that it is citing its value way slightly above today’s inflation rate.
And if you bought it some two years ago at K12, then your investment return is now a phenomenal story that everyone will seriously talk about, in which the marginal profit percentage is counted at 85 percent return on investment.
Even though, it widely known fact that this state of affairs taken this path, has a very profitable outlook to shrewd investors which actually poses a serious worry to most policy makers.
Moreover, this is one of the main reasons as to why although our copper exports have been so excellent since last financial year, despite the low transmission mechanism which have literally failed to give life to the Kwacha and this has been an obviously weak system for sometimes, a situation which has led to non-existent in terms of positive effects to the local economy.
If anything, our local economic structure has literally been made so worse such that the monies generated from the sale of copper does not even touch the national treasury points except in tax receipts and salaries for the miners which basically comes into our local banks.
However, with this narrative, our economic models and channels should positively be changed to empower Zambia’s main economic benchmark on the GDP right before talking strongly on diversifying the economy which also may require that we both upscale thoughts around manufacturing and the agriculture right at the same time in order to create “an agenda of symbiotic movements in resuscitating the local economy.”
Agriculture should feed directly into manufacturing as a way of fostering vertical integration system then with this case implemented, we will able to quickly see through positive economic shifts gravitating positively in this nation.
With regards to the local foreign exchange fundamentals, there are a lot of several factors for the kwacha’s continued depreciation but the current psyche of the dollar as an asset discussion must be factored in, as one of the panache in the Zambian trade and commerce case.
It’s not coming on the market from most perceived exports especially traditional goods on national imprint they often say, everybody today is now seeking for it on the local market to pull a combination of needs for business. As it’s no longer just a merely normal currency with perceived monetary value features but it’s now an attractive asset right now to complete going about trade and commerce across regions.
Talking it from the projected scenarios currently being undertaken, it will not a big surprise to get to see and understand that our domestic currency, will one day particularly in this material year cross over a K26 mark especially around fourth quarter by latest December, and perhaps all this is now telling us to start feeding into the fizz which makes it extremely risky and unbearable on the sides of local businesses at microeconomic level except for the few investors who are basically benefiting from this unstable currency fit taking shape today.
But the biggest question still remains to all of us today, to think on how best we can make good with this nation’s economic models especially that we are in an election year and we need to think beyond politics of favourite but politics of aspirations to make the nation great once more.