A good New Year to one and all! As a Mission Partner you are expected to turn your hand to many things. We have been busy recently compiling our annual financial reports. Reading Fergus Macpherson’s “North of the Zambezi”, you realize how little things have in essence changed in 70 years. On arrival in Mufulira in 1946, shortly before Christmas, he was presented with 3 tomes - “There you are, your cash book, your ledger and your journal!”
Macpherson had operated a cashbook before at an Edinburgh Boy’s Club, but the word ledger had, and still has, a faint sulphuric tang of Scrooge about it and he had copies of David Livingstone’s Last Journals in his books. This task is often overlooked in the tales of Mission you hear, or the dreams you have of the work.
In an earlier blog this year we mentioned the fact that many Zambians, since banks were closed to them, were being forced to borrow money from private microfinance companies who were little more than legalized loan-sharks at exorbitant interest rates. A number of hospital workers and school colleagues had got themselves into trouble by these rapacious pay-day predators. They are called often ‘caterpillars’ here., because of the rate at which they ‘eat’ your money and the destruction they cause.
The good news is the Bank of Zambia has now introduced a cap on the effective annual lending interest rates that licensed non-bank financial institutions can charge their customers. A similar recent measure was introduced for commercial banks as well. This has been done to make borrowing more affordable and equitable especially to the more vulnerable micro-borrowers. The maximum effective annual lending interest rate for them should not exceed 42%. The rate for other non-bank financial institutions should not exceed 30%. These caps had been arrived at by multiplying the commercial bank rate of 18.25% by agreed factors. These rates would be revised periodically in response to the prevailing financial climate.
Hogmanay was a bank-holiday in Zambia this year, as staff prepared for the first day of the rebased Kwacha. A series of new bank notes and coins have been introduced bringing the value of the Kwacha in line with neighbouring countries. Three zeros have been removed from present denominations.
The Kwacha is subdivided into 100 ngwee. The Zambian Kwacha is one of the most stable currencies in Africa. Kwacha and ngwee come from the Nyanja words for “dawn” and “bright” respectively.
In 1968 four years after Independence, the Kwacha was introduced at the rate of ZMK2:GBP1 and ZMK1.20:US$1.00 During the late eighties and early nineties in the severe economic crisis, the currency suffered from very high inflation and by 2006, the exchange rate was ZMK4800 to US$1.00. Throughout 2012 it has remained around ZMK5000:$1.00
The new rebased currency appeared from ATMs on New Year’s Day, 1 January 2013 with the new Zambian Kwacha being introduced at a rate of 1000 old Kwacha = 1 New Kwacha. The old notes will remain legal tender alongside the new kwacha notes until the end of June. New coins have also been introduced for 5, 10, 50 Ngwee and 1 Kwacha.
During the period of the UNIP one-party state all coins and banknotes depicted President Kenneth Kaunda on the front and Zambian flora and fauna on the back.
With inflation and the Movement of Multiparty Democracy winning the election in 1991, 100 and 500 kwacha notes were introduced, followed by 1000, 5000 and 10,000 kwacha in 1992, and a decade later in 2003, 20,000 and 50,000 kwacha notes were introduced.
These notes all feature our national bird, the fish eagle, on front and on the back you find the Freedom Statue of the Zambian breaking his chains. As an aside, Zambia also became the first African country to issue polymer notes made in Canada . The 500 and 1000 kwacha were both printed on polymer. You still find the old green K20 note, which some people have as a keepsake in their purse or wallet. Below are images of the new notes and coins.
Some new exchange rates:
ZAR1.00 ZMK0.60 (60Ngwee)
PULA1.00 ZMK0.64 (64Ngwee)
CNY1.00 ZMK0.81 (81Ngwee)