ZICA raises concerns over draft foreign currency regulations, warns of implications for economic stability (Video)

The Zambia Institute of Chartered Accountants (ZICA) has expressed some reservations on the proposed draft foreign currency regulations, warning that the policy could threaten economic stability.

On June 20, 2024, the Bank of Zambia initiated a consultation process on the draft foreign currency regulations through the Public Private Dialogue Forum.

ZICA President, Yande Mwenye, speaking at a media briefing, stated that the new currency rules should align with existing economic strategies and remain adaptable to global economic shifts.

Mwenye stated the importance of a cautious approach by the government, urging continued dialogue with all stakeholders before any policy implementation.

“The broad objective of the proposed currency regulations is to enforce existing laws and strengthen the implementation of monetary policy, which is more effective when domestic transactions are quoted and priced in Zambian Kwacha,” she said.

Mwenye acknowledged the intent to reinforce the Kwacha’s role in the economy but highlighted significant risks in the current approach.

She cautioned that displacing the U.S. dollar from local trade could destabilise sectors heavily reliant on it, potentially reducing their profitability and competitive edge.

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Additionally, she noted that this move could deter foreign investors, whose confidence in policy stability was crucial.

“We are disappointed that we were not included in the consultative process. Accountants play a vital role in businesses and organizations, making our input essential to the consultation,” Mwenye said.

She argued that the process should engage all relevant stakeholders to produce a policy framework that is enduring and avoids unnecessary business disruptions and negative international perceptions.

Mwenye reiterated that the draft foreign currency regulations were primarily aimed at enhancing financial sector stability.

“Furthermore, there is a strong emphasis on recognising the Zambian Kwacha as the nation’s legal tender, to the exclusion of other currencies,” she added.

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