Kwacha devaluation okay-Scott

THE devaluation of the Kwacha against the United States dollar will benefit  farmers in Zambia, says former vice president Guys Scott.

“If you are a peasant farmer or farmer of any sort today I would be dancing in the fields,” he said.

Dr Scott said the price of maize in dollars in the region at the moment was about US$9 dollars  per 50kg bag and if multiplied by the exchange rate of about K7.60 it came to K65.00.

He said if Zambia had succeeded in stabilizing the Kwacha at K5, the price would only be K45 for a bag, adding that going back to the days of HIPC, the days of Mwanawasa monetary policy then, a farmer could only have received K27 for a bag of maize today.

“So the depreciation of the Kwacha has been a windfall for producers. It has been a blessing from heaven for those of us who run on fixed salaries and worry about the cost of living on the tummy. Yes we are the ones who are worried but the people who vote for us in the rural areas are the ones who are benefiting,” he said.

Dr Scott said depreciation did not destroy money but only transferred it around to other places.

“…It takes it from town and puts it in the bush. It takes it away from the centres of consumption and gives it to the people who are trying to produce and are trying to make a profit,” he said.

Dr Scott called on members of Parliament to understand and go back to the constituencies and ensure that the farmers understood.

“We have had occasions before where the rate of exchange has changed. I think we need to be careful so that farmers understand exactly what this is about,” he said.

Dr Scott said if farmers did not understand then they become part of people complaining “Ooh these are weak kwachas! Weak kwachas! Weak kwachas!

“…would you prefer 10 weak kwachas or five strong kwachas they look the same and they do the same job.

So I think that is something I have been worried about every time we get to the question of what are you doing about production. The market is trying to sort the problem of production.  We are trying to stop the cure for overvaluation. We are trying to bring the overvaluation with interest rates and things like that and I know the Minister of Commerce thinks we are afraid of borrowing money, me am terrified of borrowing money madam and the reason am terrified is that I have a lot of friends whose farms now belong to Barclays they don’t belong to them anymore because they borrowed at 12 percent and they ended up paying 30 percent and the ended up handing over their farms,” Dr Scott said.

He said there was need to get the economic policies of the current Government correctly in order for the producer to get their hands on money.

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