By ZBT Editor – April 14, 2016 0 2944

A check in Lusaka the capital as at Financial Markets close of business today 13 April 3.30pm (SA time) the Kwacha traded for 9.2/9.3USD on bid and offer. Mixed feelings for local entrepreneurs were observed.

“I pay for my equipment in dollars and this just came at a time when I was about to transact,” Steven Mbali CEO of Stekals Construction Company said.

“I honestly haven’t felt any effect on this move as I buy my vehicles from South Africa whose rand is also strengthening,” Dalitso Zulu a Lusaka business owner said in an interview with ZBT.

Just a few months ago online news platforms misconstrued the declaration of prayer and fasting on 17 Oct 2015 by Africa’s second largest copper producer Zambia’s Head of State. This was to seek the Almighty Gods intervention and wisdom amidst economic hardship in Zambia. Most International media houses mocked this move citing it as futile as the Kwacha still continued depreciating post 17 Oct 2015.

The very stone that the builders rejected has now become the corner stone.
Not a single day would pass without International online business platforms tagging the Kwacha as worlds worst performer. There was overwhelming negative news on Zambia. Today the Kwacha is the best performing currency in Africa according to Bloomberg, posting 12% appreciation of which most of this has been in the last fortnight. This is due to demand and supply fundamentals in the tax season. In articles entitled, “Kwacha bullish run explained,” and “Kwacha appreciation an autopsy of constricted economic activity” published this week the rally is explained in detail.
Performance of African currencies year to date from Bloomberg with Kwacha and Rand taking the lead.
Performance of African currencies year to date from Bloomberg with Kwacha and Rand taking the lead.
When we succeed we remember our friends too.
The South African rand has also emerged second best performing currency with a 5% year to date appreciation. Just a few months ago the rand took a beating after political risk factors which include the Finance Minister replacement saga and the issues around constitutional court finding. SA was on the brink of a sovereign downgrade to junk status. In the twink of an eye sentiment changed as Africa’s most industrialized and second largest economy by successfully issued a $1.25billion dollar 10yr bond at 335bps above US treasuries of similar tenor. The bond appetite was good. It’s gave a barometric indication of investor sentiment that seems to suggest the downgrade expected in June is highly unlikely.

Sustainability of this appreciation
Sustainability and resilience of these two African currencies is another story and cannot be predicted but one thing for sure is God is all powerful and can turn around the mess most nations are in, into an awesome miracle, ZBT Executive Director said in a note. This however doesn’t mean we have arrived. A lot of work needs to be done especially to diversify the economy to make it lesser prone to stress shocks that arises from drop in commodity prices such as copper. One of Zambia’s God given assignments is to be the regions bread basket. This speaks to agriculture potential which is a diversification avenue from mining. God has given us the wisdom to diversify even in energy as there has been over dependency on hydro for power generation. He has given us coal, wind and the sun that can be used to generate power. We continue to live in energy poverty eras not because it didn’t rain much this season but that we didn’t utilize wisdom to diversify into other sources hence the load shedding predicament we are in. The world clearly lacks wisdom today.

“We take the declaration of Zambia as a Christian nation seriously. When we petition God, he listens and he answers prayers irrespective of how long it takes. He is not man that he should lie, his word never returns to him void. Zambia has a special place in Gods heart. If there had not been a famine in Egypt, Joseph would have never been recognized. Maybe we needed this economic turbulence, to be noticed on the continent in fact the world,” Helen Sakala said from Blessing Centre Bread of Life Church this afternoon.

Different stakeholders have given views ranging from austerity measures, supply demand fundamentals and economic activity slow down. Most Zambians on the ground are more skewed to believing there’s an invisible hand at play. God works in mysterious ways that even Chartists and the best traders on the globe will ever comprehend. He is God over everything including markets.