The Economics Association of Zambia has projected that the Kwacha will remain relatively stable as the country moves closer to the August 13 general election. The currency has recorded strong performance this year and has been described as one of the best performing currencies globally in recent months. Despite this positive outlook, there are concerns that election related pressures could trigger short term economic shocks. However, economic analysts argue that the overall trajectory of the Kwacha remains steady due to improved macroeconomic conditions. The discussion highlights the balance between political events and economic stability in shaping currency performance in Zambia.
EAZ national secretary Nicholas Mainza said in an interview that the Kwacha has demonstrated strong resilience and consistency over the past year. He explained that the currency has managed to appreciate against major foreign currencies and maintain relatively stable trading patterns against the US dollar. According to him, this stability reflects improved economic management and stronger market confidence. He emphasized that the performance of the Kwacha has provided a more predictable environment compared to previous periods of high volatility. This predictability is important for both short term financial planning and long term economic decision making.
Mr Mainza further noted that currency stability has had positive effects on households, businesses and the wider economy. He explained that when exchange rates remain steady, individuals and companies can plan their expenses with greater confidence. Entrepreneurs in particular benefit from reduced uncertainty when importing goods or setting prices in local markets. At household level, stable currency conditions help families manage budgets without sudden increases in the cost of essential goods. He stated that consistency in the exchange rate supports broader economic stability and improves confidence across different sectors of the economy.
Looking ahead to the election period, Mr Mainza cautioned that general elections often bring what he described as internal economic shocks. He explained that while external shocks such as global conflicts or geopolitical tensions are beyond Zambia’s control, internal factors like elections can influence market behaviour. These effects are usually linked to uncertainty, government spending patterns and shifts in investor sentiment. He stressed that such pressures can be managed through careful fiscal planning and disciplined economic management. His remarks suggest that maintaining stability will depend on how well institutions manage public spending and policy expectations during the election cycle.
Mr Mainza also called on the Government and the Bank of Zambia to continue consolidating the gains that have supported the appreciation of the Kwacha. He emphasized the importance of sticking to approved budgets and avoiding unnecessary fiscal deviations. According to him, disciplined spending helps reduce pressure on the currency and supports long term stability. He warned that any departure from established budget frameworks could create avoidable strain on the foreign exchange market. His comments reflect a broader call for consistency in economic policy to sustain recent gains in currency performance.
In a separate interview, economic and financial expert Andrew Chibuye offered a similar but slightly cautious outlook on the Kwacha. He said that while some movements in the currency may still occur, sharp fluctuations are unlikely in the short term. He attributed potential minor changes to external factors such as geopolitical tensions, particularly those in the Middle East. However, he stressed that these developments are not expected to cause dramatic volatility in the near future. His assessment suggests that the Kwacha may continue to experience controlled movement rather than sudden instability.
Chibuye explained that current global conditions can influence currency markets, but their impact on the Kwacha remains limited at this stage. He noted that the combination of domestic economic performance and external pressures will determine the currency’s direction in the coming months. While appreciation or depreciation may still occur, he expects these changes to be gradual rather than abrupt. His remarks align with broader expectations that Zambia’s currency will maintain relative stability heading into the election period. This outlook provides reassurance for businesses and households that depend on predictable exchange rate conditions.
Overall, the Kwacha’s performance continues to reflect a period of improved economic management and cautious optimism among analysts. Both the EAZ and independent experts agree that while election related factors may introduce some uncertainty, the risk of major disruption remains limited. The focus now shifts to maintaining fiscal discipline and supporting policy consistency to preserve recent economic gains. Stability in the currency is seen as essential for protecting household purchasing power and encouraging business confidence. As Zambia approaches the general election, the performance of the Kwacha will remain a key indicator of overall economic resilience and investor sentiment.