Foreign currency law worries farmers

The re-introduction of Statutory Instrument (SI) no. 33 on currency regulations which restricts the use of foreign currency for local transactions will disadvantage farmers, says Zambia National Farmers Union (ZNFU) president Dr Evelyn Nguleka.

She said in an interview that ZNFU held a meeting last month with Government officials from Ministry of Finance, Bank of Zambia and Ministry of Commerce, Trade and Industry at which the issue was raised.

She said in the meeting, ZNFU opposed the re-introduction of SI 33 on Currency Regulations because it restricted the use of foreign currency for local transactions.

Dr Nguleka said the union was still awaiting Government’s response to the amendment proposals made after the meeting.

“The SI which has come for the second time was discussed when I was out of the country. It has gone back to Government for some amendments and they have not gotten back to us yet. We have not heard anything from them yet,” she said.

According to Dr Nguleka, the union hoped to influence changes to the draft SI in order to safeguard economic growth and development by attracting more investments into the agriculture sector.

In the meeting, ZNFU representatives said 85 to 90 percent of inputs used in the agricultural sector were imported, hence allowing farmers to reference prices in US dollar.

ZNFU suggested that farmers should be allowed to receive dollar payments in Kwacha for all commodities that were priced in foreign exchange as they were for the export market e.g. tobacco.

The union also suggested that Government should allow current contracts to run their full term so as not to disadvantage farmers in the middle of a growing season as most farmers had just signed dollar contracts.

ZNFU further asked Government to allow transactions for short periods to be in Kwacha and those that were long term to be in dollars.

Government officials later noted the above concerns and promised that they would present them to the Minister of Finance so that ZNFU could be accommodated in the SI on currency regulations.

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