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Production is game changer for Kwacha – Economist

AN economist says Government needs to invest in long-term measures such as production to stabilise the exchange rate
Maambo Hamaundu said production will result in job creation, availability and affordability of goods and services and also an increase in gross domestic production (GDP) among others.
In an interview, Mr Hamaundu said despite the Kwacha’s appreciation, there has not been significant production happening in the country.
“I believe nothing much has changed in terms of production. The lending rates in the banks remain relatively high. Therefore I cannot say that there has been investment of money in the economy that could have led to improved production,” he said.
Mr Hamaundu said, however, that there is an improvement in terms of inflow of foreign exchange (forex) which he speculates is as a result of external injection of substantial amounts of money into the economy.
He said this appreciation of the local currency may not continue unless it is production driven.
Mr Hamaundu attributes the Kwacha’s gain to an event which has resulted in significant inflow of forex.
He said forex can come into the country when the government borrows money or when there is an event that has attracted people to come into the nation.
“But when this forex is consumed or utilised by demand, we might begin to see the Kwacha moving back to double digits. This is why I believe Government needs to employ long-term sustainable measures for the Kwacha’s stability,” he said.