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KWACHA OVERPOWERS THE SA RAND FOR THE FIRST TIME IN ABOUT 20 YEARS

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KWACHA OVERPOWERS THE SA RAND FOR THE FIRST TIME IN ABOUT 20 YEARS

..but DSTV, Shoprite, Pick N Pay, PEP etc are not aware

By Miles B. Sampa, MP (31.08.2022)

In past years when the Kwacha has operated freely and only influenced by market forces, it has consistently been weaker than the South African Rand. Today the Kwacha hit a 50 years high of 1.1 Rand per K1 or 90 Ngwee per 1 Rand representing a 60% gain in the last one year.

Zambia has continued to have good external sentiments arising from favorable outlook for global Copper demand and progress on the IMF programme. This has made the Kwacha to bully not only the USD (15:1) but all other major currencies namely the British Pounds, Euro and the SA Rand.

It’s the Rand however whose country SA represents the biggest trading partner for Zambia that has been pummeled to pulp. If it was in boxing a towel would have been thrown into the ring.

In June this year and for the first time in modern history, the Kwacha caught up and hit par (1:1) with the Rand. Two months later by end of the end August, the Kwacha is stronger than the Rand by R0.08 or 8 cents . This represents close to a 1 % strength by end of today and 60% gain in the last 12 months.

The Kwacha’s Muzala (fast pace) gain to the Rand is both sweat and ‘chileya’ (Bad) music to ears of majority ordinary Zambians. Sweat because most goods and services they consume are imported from South Africa and means they should become affordable comparatively on a year to year basis. It’s however Chileya music to their ears because the companies or providers and sellers of the goods and services from South Africa have refused to reduce their prices.

In the years when the Kwacha depreciated against the Rand, the same companies were quick to increase their prices. They would do it on a daily basis. “The Rand keeps gaining “ they would say to the the Zambian consumer abeit arrogantly. With the current opposite scenario when “ the Kwacha keeps gaining”, the owners of these companies are Zeee (quite).

I take the liberty to hereby ‘Name & Shame’ these greedy goods and services providers in Zambia managed from South Africa. They are DSTV (Multichoice), Shoprite, Pick N Pay, Game stores, Choppies, Mr Price, PEP stores and many others.

As for Shoprite, I remember them insisting feeding us imported potatoes and onions from South Africa when the exchange rate was in their favour (weak Kwacha). They would even lie that local farmers were failing to supply them specific quality produce for their standards and same could only be found in SA.

I now read in the press in SA that these companies are not reducing prices because the produce they buy from local farmers and suppliers remains expensive as they pay in the local currency (Kwacha). In that case one can argue that Shoprite may aswell continue bringing into Zambia their potatoes and onions if that will make them reduce prices by 60% as gained by the Kwacha against the Rand.

For simplicity, a Zambian now needs 90 Ngwee to buy 1 Rand. May this reflect on all prices for good and services from SA.

As a rider though, there is a twist to the tale due to Inflation differentials of the two Countries that then ignites issues of cost of living or quality of life for citizens. Thats some long article of another day however.

For today our eyes are on the ball. DSTV, Shoprite, Pick N Pay, Mr Price, PEP et al must reduce their prices in Zambia. They must do this soonest on their own otherwise they should be ‘cited’ for ‘obtaining money from Zambian citizens by false pretense’ vis a vis the real value of they goods and services they provide given the very weak Rand against the Kwacha.