By JIMMY CHIBUYE
THE Jesuit Centre for Theological Reflection (JCTR) says the convenience of transacting with a rebased currency should result in enhancing economic growth and development.
JCTR information officer Twaambo Kanene-Mwale said in a statement issued in Lusaka yesterday that enhancing economic growth and development under the rebased currency should be government’s ultimate focus.
“The convenience that comes with transacting with a rebased currency should result in enhancing economic growth and development. This should be the ultimate focus of government,” Mrs Kanene-Mwale said.
On Monday, Minister of Finance Alexander Chikwanda announced that government will rebase the Kwacha by slashing off three zeros from currency and introduce coins for lower value denominations instead of notes.
The largest note therefore will be K50 from the current K50, 000 while the lowest will be K1 from K1, 000.
Mr Chikwanda said the new currency will be introduced in the next six months during which period the old currency will be withdrawn from circulation.
But Mrs Kanene-Mwale said the transition should be managed in a way that will maintain people’s confidence in the currency by widely disseminating information on the rebasing exercise.
She said while currency rebasing is an acceptable economic exercise for countries, it is largely neutral on the quality of life of people because it does not change the buying power of the currency.
Mrs Kanene-Mwale said the rebasing exercise is also done to enhance people’s confidence in the currency and stabilise its fluctuations.
She said transacting using the current Kwacha notes has been a “nightmare” and that rebasing is inevitable.
Mrs Kanene-Mwale said it should be noted that rebasing is not an end in itself and will not bring about the meaningful development Zambians need.
She said currency rebasing is mainly done to make commercial transactions easier and reduce the cost of transaction by using fewer notes.
Mrs Kanene-Mwale said rebasing may enhance confidence in the currency in the short run, but it is important to realise that it may fuel inflation especially in the absence of other initiatives to tame inflation.
She said JCTR notes with concern that the rebasing exercise of the Kwacha was not provided for in the 2012 budget and resources will have to be redirected from other activities or government will have to borrow outside the budget.