Copperbelt economist Manase Siwila has attributed the weakening of the local currency, the Kwacha, to a notable decline in production within the mining sector.
The Kwacha faced a significant drop on Thursday, breaching the K23 mark, fluctuating between K23.00 and K22.57 against the US dollar.
Key mining entities like Konkola Copper Mines, Mopani Copper Mines, and Chambishi Metals have operated below full capacity for over three years, contributing to the economic strain.
Expressing concern over the Kwacha’s depreciation against major currencies, particularly the US dollar, Siwila highlighted the indication of a struggling local economy.
Siwila emphasized the need to boost exports and curtail the outflow of funds by foreign investors to stabilize the Kwacha. He pointed out the notably low productivity levels in the mining sector, which traditionally serves as a significant source of foreign exchange for the country.
Highlighting the imbalance between imports and exports, Siwila stressed that excessive imports in contrast to limited exports have significantly contributed to the weakening of the Kwacha. This, in turn, escalates the cost of living due to increased externalization of funds.
In conclusion, Siwila underscored the necessity to enhance production levels as a pivotal strategy to counter the Kwacha’s decline. Encouraging a boost in foreign currency inflow, he advocated for measures to attract more foreign investments to strengthen the economy.