THE Bank of Zambia (BoZ) should with immediate effect criminalize the quotation of goods and services in foreign currencies, says ActionAid country director Pamela Chisanga.
Ms Chisanga said her organization has recommended to the Minister of Finance Alexander Chikwanda to take action against houses and individuals quoting in dollars for their goods and services to ensure that the Kwacha remained the only legal tender for Zambia.
‘The order should be religiously followed with enough political will.This will reduce pressure on the local currency immediately,” Ms Chisanga said.
The recommendation came from a recently held public forum titled “Impact of the depreciating Kwacha on Tax Revenue collection and service delivery” at Mulungushi International Conference Centre.
Ms Chisanga also recommended that the continued weakening of the Kwacha, Government would require more than the budgeted K2.4 billion to service external debt.
“Government should focus more on raising domestic revenue unlike relying on foreign borrowing which has high cost implications in terms of debt servicing,” she said.
Ms Chisanga observed that recently, Government raised external debt borrowing ceiling from K35billion to K65billion.
“Therefore, Zambia’s external debt is likely to increase given the increase in external debt ceiling. Huge debt levels imply increased debt servicing,” Ms Chisanga said.
“Debt servicing is becoming expensive and a drain on the treasury. In 2015, Government budgeted K2.4 billion to service external debt obligations,” she said.
And Ms Chisanga observed that the weak Kwacha adversely affected the most vulnerable in society, adding that women and children in Zambia were the most affected.
“Women and children form a section of society that is most vulnerable and thus they are among the ones who bear the heavy brunt of a poorly performing currency and economy in general,” she said.
Ms Chisanga said any interventions by Government therefore needed to focus on poverty reduction strategies that had a multiplier effect on the vulnerable and marginalized in society.
“In this regard sectors like agriculture, tourism and health will require more pragmatic strategies that will be all-embracing and empowering,” she said.