• The Kwacha has been experiencing an unusual decline since introduction of the Export Proceeds Tracking framework on 1st January.
• New framework has been met with resistance from major exporters with speculation that exporters are withholding foreign currency.
• The local unit is expected to hit K15 to a dollar between April and December, 2024.

An Economist says the Kwacha has been experiencing an unusual decline since Bank of Zambia’s introduction of the Export Proceeds Tracking framework on 1st January this year.

Under the Export Proceeds Tracking Framework, all export earnings will be reflected into an account at a bank domiciled in Zambia in a bid to strengthen foreign exchange management, and combat money laundering activities.

Yusuf Dodia told Money FM News in an interview that the new framework, which is designed to monitor and manage export proceeds, has been met with resistance from major exporters with speculation that exporters are withholding foreign currency as a form of protest against the government’s policy.

Mr. Dodia noted that throughout January 2024, the country’s export earnings have reportedly failed to bolster the economy or stabilize the Kwacha despite the effectiveness of the new tracking system.

“Clearly there is more to expect as we go forward but as we know the Export Proceeds Tracking Framework has a window of 90 days in which export earnings are expected to be brought into Zambian banks.”

“I am confident that by the end of March 2024, we should be able to see that US$20 million to US$30 million coming in everyday and that should strengthen our Kwacha significantly and sustainably,” Mr. Dodia stated.

He added that the local unit is expected to hit K15 to a dollar between April and December, 2024 once the Export Proceeds Tracking framework starts yielding positive results.

“I expect the Kwacha to hit the value of K15 to a dollar between April and December, 2024, meaning that the cost of doing business in Zambia and commodity prices will come down. It means the interest rates in the banks and inflation rate will also come down, he added.

The Kwacha has continued to lose strength against the United States dollar and other major convertible currencies.

It has opened the market today Monday 25^th March 2024 trading at K26.41 and K26.93 after closing Friday trading session at K26.24 and K26. 76 on the bid and offer respectively.