Kwacha depreciation???

The kwacha has seen a fairly good beating against major currencies in the past months. Reasons of this beating unfortunately are hard to get a hold of. Therefore it is an interesting field to get in and see what had made this beating.

A look at the trend of related currencies tell a story that need great attention. We see the dollar rising faster than had ever done in the last 40 years. This therefore will obviously mean that the kwacha is expected to perform badly against the dollar. We see the Chinese economy slowing down, China being a major importer of copper will again result in an interesting beating on the Kwacha. But will all these stories add up to produce one of the worst falls of the kwacha in over 8 years?

That is a story worth looking at it. Unfortunately I have not been writing on this blog for sometime now due to a lot of personal issues that have literally killed my blog time. So I would want to look into all the issues that has brought in an interesting kwacha economy and issues that we need to be looking at in future to strengthen our kwacha. So I will let this be and prepare a full analysis in the time that I have. 

Further, to ensure I devote the little time that I have on a single blog, I have decided to merge my Africa perspective into kwacha economics to ensure the material does not make me stay on one blog and lose focus on the other. So you will see topics of African and specifically Zambia development perspective show up here. As usual, the political aspect is a lot more in development perspective than the kwacha economics. To ensure I stick to my direction, only general polity related issues will be embarked on. I hope people would stick to that too!

Lets see how this will work out!

Has The Kwacha Stabilized?

I would like to apologize as I have been out and about to blog on a few things that have been happening. Sadly, the kwacha was the main issue that has been happening and a blog with that name should surely have been providing the needed updates. Nonetheless, I will try and make up for the lost time.

There are many stories that surround the dive that the Kwacha took and many of these are close to the truth. Kwacha economics has a perspective which I feel is closer and need attention to all that are concerned.

To begin with, there are many factors that can lead to a currency to fail that quick in such a short time. Many of these can be explained not necessarily immediately but after careful analysis of the happenings. 

Monetary Policy and Only with Fiscal Policy

I am a firm believer that monetary policy and fiscal policy should work together to affect certain desirable positions in the economy. The Kwacha's fall once again proved that better than any text book would do. We all remember the amounts of dollars that were off-loaded on the Zambia markets, the effect they had on the falling is as good a guess as any. Check this [here], [here] and [here] Maybe a series of analyses can look into a it but we need to examine how things changed when the fiscal policy was called to the war.

So why was the offloading of dollars so ineffective? 

The simplest form of understanding exchange rate market (that some senior made me to believe way back), is that you have a basket of dollars (or any other foreign currency) and another one with Kwacha (or any local currency), and you are comparing the values. If there is less dollar than the local currency, the value of that foreign currency will appreciate as there will be more local currency than the itself at any value. So for every dollar that exist in that basket, more and more of the local currency will be needed to equalize the status quo. 

So from the above, a depreciated currency will entail there is a lot more of that currency that the foreign currency. So the two things that can happen is to flood the economy with the foreign currency - which the Bank of Zambia did, or suck out the local currency! I believe the two are better handled using the different policies of monetary and fiscal. Monetary policy can flood the economy with foreign currency effectively and efficiently while the fiscal policy can suck out the local currency very efficiently.

Our handling of the fall in the first few weeks was a 'flooding of economy with foreign currency' strategy which did little too late. The use of both flooding and sucking out worked!! Monetary policy and fiscal policy produced wonders!

Why this should be have been expected!

It is interesting that this was not expected! But having little history of this, maybe we should not expect people to realize what was happening. So lets look at the signs on the ground.

Zambia has not been in a position where they have invested so much in infrastructure development in long time. Lets just look at roads for the time being. I don't remember a time that so much money has been put in road construction. Specifically "Link Zambia 8000" or even Lusaka's "L400". Before these projects started, the only other "major" road construction was the election linked "Formula 1".

The two projects of "Link Zambia 8000" and "L400" have had a major cash injection for materials, equipment, employees, etc. The materials and construction equipment are imported. So no matter how much Kwacha is dished out, the contractors will need the Dollar to import the materials and equipment to be able to undertake the construction. So there is a leakage of Dollars and this is not in small amounts, but huge cash outflows from the Zambian economy. Such outflows will put a strain on the local currency and will serious lead to its depreciation. Its a simple demand and supply phenomenon.

Taking into account all such flows of money, the Kwacha was bound to be severely hit. 

So the counter measures to this scenario was to ration the disbursement of road construction funds or plan the release in such a way that the Fiscal  and Monetary policy worked on that issue together. Of course we have to remember that such happenings are new to everyone around and in institutions that are handling these policies. So a future happening can be handled much better.

If All Else Falls, Get Your Money Back!

The last kick in the system is when all else fails, the fiscal gets its money spread around in commercial banks back to the Central bank and let the invisible hand be helped with a loaded dice. It always works. No one can have more money that the fiscal machinery unless there is a sick economy arrangement or there is need to spend.

Sweeping of fiscal related accounts produces good results for the entire economy when there is need to control the exchange rate depreciation, but works against expansionary fiscal happenings. Banks will have no money to create more money with, and the fiscal can be assured of a greater demand for the local currency in a short time period that other methods. The opposite stands true when an appreciation is needed to be controlled.

The current arrest of a free falling Kwacha sums up the rules of the game - Monetary policy and Fiscal policy are different sides of the same coin. It just depends on which side you picked to start the tossing of the coin!

So now has the Kwacha stabilized for good?

Kwacha Depreciation

I have always looked at the way we handle the depreciation of the Kwacha and the panic that is associated with it in wonder. There is nothing wrong with an floating exchange rate to float! That is why it's called floating.

Let the Kwacha Depreciate

If it needs to, let it depreciate. However, just ensure that there is stability on this depreciation path. It's safe economics.

The worst thing that can follow such a move (which mostly has happened in the past in this country) is to come up with funny policy changes and falling into the trap of the people you had been trying to catch. There are a lot of theories on what can happen and why it is happening. The safest is to look at the decisions that need to be done and then work your way in ensuring that those do not negatively affect the economy.

I love it when there is so much work on the background by people affected by one measure and how they convince the world that is we do this, things would change. The interesting part is that, that same thing has absolutely nothing to do with the other. You feel like you are watching leverage season "Zambia".

Why is it Falling?

Why is the Kwacha falling? That is easier to find than MH370! We surely don't even need the satellite. There is tones and tones of statistics that can be used to gauge this. We even have SI 55 as a tool to use for extra input into our analysis. We just need people seating on it and working through. If there is nothing major but supported by the expected economics that we are bringing less and less of the dollar into the economy, we simply go out there and work our way into correcting that. That is how it works. If we see a policy not related to this and no major economic explanation, we may have used politics over economics - the worst possible way out of this.

Kwacha Economics will watch this unfold and will surely love to write on the outcome of this issue.

The Kwacha Dives!!!

This has been a sad week for this blog. The Kwacha has been given a serious beating. I have been running some analysis on how bad this has been. As usual, my analysis includes looking at data that has been provided around the environment of the Kwacha. To ensure I present only facts, I have to take my time and look at the details surrounding the issue. As usual it is not a good thing to be doing when you want quick answers. It still needs to be done properly.

All economic talk in Zambia has been on the exchange rate (Just to be on the same page - An exchange rate is the current market price for which one currency can be exchanged for another). The Kwacha has depreciated beyond all manner of psychological barriers. Currently selling at K6.0443 to a US Dollar and K10.1214 to a GB Pound (zanaco.co.zm - 7th March, 2014. Checked: 10.00hrs CAT). 

What are the causes is the biggest topic in this dive. The answers are still being looked at, but the politics associated with that "answer" are disturbing to say the least. Online media has done their "online analysis" and it has gone as far as looking at the appointments at the Central Bank. I like many friends of mine are hoping that Monday proves the online media houses wrong  and the appointed Deputy Governor is no way close to what they have been publishing. I don't think there will be anything to talk about if the seriousness that is required in the appointing of people charged with looking after the Kwacha and related to that, goes to levels of mere patronage. You can read some articles here and here. Many other online media houses have touched on this subject, but I have not linked some articles which I feel are not respecting the profession of giving information as it is and choose to take the political stand instead. Feel free look them up on google.

What really causes our currency to dive like this I still ask. I have written on this issue (in serious foras which I cannot quote), and I still believe the argument I have had still stands - we don't produce demand for our Kwacha. With a few in the lines of Maheu and Sweets exports, little value is sent to the world for them to demand our Kwacha. The mines would have been the best option, but the Swiss connection seems to take us out of the equation.

Over the past years, according to Trading Economics, the Kwacha against the dollar has been on a rather bad trend. One which should make us re-think our development agenda and encourage us to build what will make our Kwacha stable.

The trend has not been good against the dollar over the years. On average, the Kwacha is depreciating at an alarming rate.

Source: Trading Economics

That's a jump from around K4.7 to K6 in a period of less than four (4) years. The depreciation has been worse since 2012 on average.

I am alarmed to see that the dive in the past week is shockingly higher than any other time in the past three (3) years. I will monitor this and get information on the possible causes in the next few days for an update.

New K100.00 Note

The new K100.00 note is note a re-based K100.00 that we have had. People need to know this as the note may be subject to a lot of fraud activities.

The K100.00 is the highest note in the new Kwacha. It is roughly US $20.00 in value. Whilst the old K100.00 is about US $ 0.02. However, the note created did not take into account the problems the note would cause for the ordinary people. The similarity between the notes is not that great, but the difference are too little for the people who have not seen the notes before. If you have seen both, there is no problem. But failure to even be exposed to one will bring problems. 

Look at this:

The notes are way confusing for the ordinary people and the villagers. This is not a good if you know what I mean. But lets let the people judge and tell us what they think about the two notes.

I think the note should have a different colour, bigger than the old one and totally different from this.

Rebased Kwacha - K2.00

One of the new notes that was not previously in the Zambia economy. Not possible to compare with any other as its uniquely new.

I believe the new K2.00 will make some transactions simpler. But then I again, I may be wrong.

I expect this note to have very little if any problems at all since its a new entrant on the market. Maybe the women selling on the streets may be confused in the initial days but quickly adapt to the trend of new notes.

I have slowly been taken by the wash-out look of the other notes, but the K2.00 is uniquely  its own colour so maybe the wash-out will not be linked to this one.

Rebased Kwacha - K5.00

This is another one of our beautiful note simply re-based. The features are almost the same.

Very few people would be confused with this one. It simply looks like a wash-out of the old note. I am already falling in love with the "wash-out" looks. I believe I'm not the only one. Maybe we got used to the old notes.

Rebased Kwacha - K50.00

The once mighty ninja (K50.00) is back. This time dwarfed only by the introduction of K100.00.

So another one worth looking at is the K50.00 which is a re-based K50,000.00. Of course this just looks like the washed out note when you look at the colour. But I do love the new look and far better than the old one.

So the K50.00 note is the second highest note in the new Kwacha. It has to be one we should be familiar with at all times.

Rebased Kwacha - K10.00

I have just got news people have been demanding for the new kwacha like mad. So Kwacha Economics thinks you should see the different notes and see if they really live up to the "New Money Same Value" idea.

K10,000.00 has now become K10.00. Ideally, this is supposed to be of same value and the touch of looking similar just adds some good to it. Below are the front and back. 

I think it really is new money same value for this one. Anyone thinking otherwise?

Bank Holiday Pt. 2: Banks, ATMs will be closed

Bank Holiday

December 31st, 2012 has been declared a Bank Holiday. I have heard a lot of people missing this point and some think it is just an intention.

The holiday was declared and a statutory instrument issued to that effect. Moreover, the Re-domination of Currency Bill, was passed in Parliament and is now an Act. So the day is a holiday.

What to Expect on 31st December, 2012

All banks, ATMs and Other financial institutions will remain closed to the public. There will be of course their staff working as the day was declared a holiday for the transition to the new Kwacha (the Re-based Kwacha). All software need to be installed and launched will be done on that day and any short-comings rectified before 1st January, 2013.

So you wont use the ATMs. Of course strategic places like International Airports, Border points will have working ATMs and some banks, but the rest of the country will not. So if you will need money for the usual New Year Eve running around, make sure you have it in cash. For emergencies, run to the Airport! All ATMs will be loaded with the new notes (ZMW and not ZMK) in readiness for 1st January, 2013.

I'm not sure about swiping. You may have to find out on that issue. 

The good news at the moment is that most banks have already started implementing the new Kwacha (ZMW). What is interesting is that some banks (wont mention them) did not plan well on the issue and did not implement critical issues related to the change. Most businesses also did not know that this would actually cost them money to upgrade not only infrastructure but software as well. So the new Kwacha is here, but are we ready to start working with it just now? Coins, new kwacha scent, etc

Do counters have places to place the coins? Do you have machines to count the new notes? Do we have places to get vending machines from? 

Welcome come the new year with the new Kwacha! Kwachaecon will be there for the first notes and will upload as soon as it comes in.

Happy kwacha economy.

Bank Holiday - 31st Dec. 2012

With the re-basing of the Kwacha so close, there is need for strategic plans on the part of government and people/ organisations involved. Software has to be configured to enable the handling of the rebased currency. Coins have to be given special recognition as this has been missing from our economy for some time. All these calls for banks and other inancial institutions to be given time to run around and organise themselves.

Just imagine, if the rebase was to happen today, how many ATMs would cope? What currency would the ATM have? What will happen to the software in banks having to run with rebased and normal currency notes simultaneously?

These are critical questions to any rebasing and the banks and other financial institutions have a perspective which matters on this aspect. The bank system must be ready to handle all possible situations that may rise from rebasing. And that requires time. But then again, we seem not to have time.

So the government came with a statutory instruments to handle such a time that banks need. So 31st December is a full time bank holiday. No banks, ATMs or Financial institutions are supposed to open. They have to sort out their software, ATMs and any other matter that would make the rebasing a challenge. They can best do it without worrying about the clients in the bank or the ATMs. And by the time they finish, only rebased notes will be in the ATMs and that will be 2013!!!

So if you plan on having a good New Year's eve, please have your cash ready as no ATMs will serve you.

I think it is a great idea to make sure all things move smoothly. I know how unbearable things get when you are trying to sort out some items and some clients are on your neck. This should help with the rebasing and we could move smoothly to 2013 and ZMW currency!

Kwacha Redonomination (Rebasing)

The Committee stage of the RE-DENOMINATION OF CURRENCY BILL, 2012 (N.A.B. 8 of 2012) went through Committee Stage yesterday and will have Third Reading today 21st Nov. 2012.

So we can safely say, we have the ngwee to our Kwacha. Kwacha economics has taken another mile stone of maintaining the Ngwee part of it. As far as things look today, we have the ngwee coins in our pockets by 1st January, 2013.

What I like about this whole process is how much economic activity is expected as a result of rebasing. We are being given an opportunity to use the coin in various ways. The simple one coming to mind is the vending machines (typically, we could have been using the 'notes' only type), but I think the coin idea makes people feel comfortable and at ease on a vending machine than notes. But more so as a parking attendant.

What people excited about these prospects highlighted about forget is the economics of just that idea of vending machines - they cause unemployment! Why would a shop owner employ one more person to help with snacks and pay him minimum wage when he can plant a vending machine in the shop and attend to those customers doing other things not snacks? This point is unfortunately the evils of development. We reach a stage we do away with labour intensive Technics and employ machines. I actually think, it would be better to have machines in that way than shop attendants who bring inefficiency to getting a cold drink.

We have to guard against bad outcomes of this rebasing though. Many of our uninformed people will be cheated out of their hard earned kwacha through street "crook-dom". So education (not sensitization which is a word wrongly used in Zambia) has to be intense and to the point. People should know that the value of the kwacha is not touched. Just the face - make up so to say. Good make-up in this case.

So we need to prepare for the new notes and new activities in our economy. The Kwacha has taken a new face and new clothes.

Statutory Instrument No. 33 of 2012 - Yipppiiiieeee!!!!

The introduction of Statutory Instrument No. 33 of 2012 by the Bank of Zambia is a welcome move for any one interested in making our country Zambia better economically. I find this, an action worth celebrating over.

For starters, it was not making sense to have Kwacha which is ignored in most transactions within the republic as people preferred to trade in US Dollar. The fact that we have a legal tender, we should use it. Why should rental for housing be in US dollars and yet that house is in Zambia, in Zambian economy? There is no problem with one basing the rent on US Dollar, but that must be a good reason to do so. This action undermined kwacha and made it useless as everything was being backed by the dollar.

Dollarisation

This is a term used when citizens of a country use foreign currency (a US Dollar in this case) in parallel to or instead of the domestic currency as a medium of exchange within the domestic economy. So Zambia using any other currency to quote for prices or to demand payment of any services or goods is dollarisation.

Zambia was one country you could quote your goods and services in any currency with no shame. If there was a visit from Congo, they could have even bought in Congo currency.

But this brought with it many problems which are so severe in most cases it can even be damaging to the economy. A stop to this measure was not only needed, but was needed fast!

Benefits of S.I. 33 of 2012
There are so many positive effects that have been mentioned when issues are refered to the S.I. in question. But all in alll, I think there is only one positive effect that can be linked to this measure and the rest are merely as a result of this. This is the issue of controlling monetary policy of a country by the authorities that may be. There is no point in having monetary policy if at the end of the day, the monetary policy in the country is actually controlled from outside the country.

Zambia has a legal tender of Kwacha. So the authorities will defend and protect the Kwacha as it is the sole currency of the economy. Use of dollar or rand, will mean we tie our economic activities to another monetary authority and can even do away with some functions of the central bank. This is only useful in a country which is in a crisis.

So economic players should actually look at this measure and the great benefit it will come with.

Mis-Understandings
One common mis-understanding of the S.I. has been on the international trade. Most people expect the S.I. to block international trade and has thus brought an imbalance in the economy. Some "wise" people went as far as claiming we can't have the S.I. when Zambia is an importing country.

• Domestic trade is supposed to be conducted in the legal tender of the country. You can never go to the USA and expect to rent a house or buy a TV in Euros or Rands! But you expect this to be done in Zambia? But the problem has been that this dollarisation was left unchecked! So the S.I. simply reminds you of what currency you will use to trade in. It was shameful to walk into these "Real Estate" companies from South Africa even quoting in rands but never in Kwacha!
• International trade can continue and be conducted in any currency you wish. The only thing one needs to know is that the Kwacha is a convertible currency. That said, you can then simply pay even in Rupees as long as you use the bank system to send your money. They will in turn get your kwacha but send rupees. Simple like all other countries do.
• The bank system use will make sure the monetary authorities have control over the transactions and enable citizens buy things from anywhere in the world at no cost to our currency! Thats why when you travel out of the country, you get your usual ATM but with draw dollars or rands depending on which country you are in. The system is able to handle all transactions.
• We have a duty to protect our country and that starts with the currency. Parallel monetary policy has not helped the country at all. (Parallel in the sense that although we have our own monetary policy, it is controlled by currencies that have an embedded monetary policy of the country they come from. We had houses being sold and quoted in dollars leading to the weakening of the Kwacha every single day. Now we can concentrate on making Kwacha strong and viable in the world trade. That starts by making sure it is a legal tender for this country. I don't think I can go buy a car in South Africa with a Kwacha, why should we make possible for anyone else to come and use their currency in our country? 

This is one of the positive issues that economic players in the country should be happy about. After all, the benefits are for all the people around.

I think this measure has been one that has taken too long to be implemented and I'm one of those that think we can do a lot more to help the country prosper!

Well done for S.I. 33 of 2012!


I have heard talk about the problems of the S.I. Basically, the only "errors" the first "errors" I saw was reference to the wrong Act (the typo of year), but that would not injure the spirit of a good law. So we just need to correct that typo and a problematic paragraph and we are good to go. We need such progressive directions in this country to get something out.

Rebirth of Economic Reason ...

I have been been delighted with the sudden introduction of reasoning in our approach to economic matters of the country. For once we look at issues in the media and hear people talk using the best possible aspect of reason and economic understanding as possible. Talk is now based on issues and not tissues!

Look at how the issues of Zamtel, Debasing or the Kwacha, Corruption fight. We have as a country looked at these issues professionally and people who didn't know about them, have been educated. That's how we should handle matters that we face each day.

I hate the political talk that was all over Facebook with no logic on the matters at hand but behaving like total cadres. I think we could have done better with economic issues. We could have addressed the issues of weak tax revenues. Lack of employment and what can be done by those in authority to bring down the unemployment rate. Inflation rate (or has that now been pushed to the day we change to the debased currency?).

Infrastructure Development

What do we need to work on? I hate going to the airport which looks like its not the biggest airport in the country. Shouldn't we be thinking about building or upgrading our airports? Why not 3 terminals - at the least!

We badly need roads and this will boast our production and exports. Which roads should be first and why? We all know its expensive to maintain roads, so why not introduce toll-gates on roads to be constructed. Would actually encourage private sector to be involved in infrastructure development, especially when we eliminate the "public-ness" of some infrastructure like roads through introduction of toll chargers which will handle the issue of excludability even if there is still a non-rivalry element - all things equal of course :)!

Budgeting??

How come we have supplementary budgets all the time? Is it a failure to plan the budget? Are things being included with no budget line all the time? What has the constitution said about all this? Where are the laws and rules related to budgeting? I have not heard a soul talk about that. And I believe even the parliament over-sight on monies of the country should be strengthened further! Have we forgotten how money was used to construct and maintain roads which parliament was not told about? Is it such a short time that these issues have disappeared? We need a check on political hand in cash of the country, let them be involved in political direction. I really need to hear this as it will help our Kwacha economics in its movement and being!

Kwacha Backed

I know this issue is a thorn to some people but we need to address the kwacha. Not the political aspects as I never wish to divert to politics on this blog! But the economics of the kwacha. I believe this is the only thing that is important - to me anyway! If we work on making our Kwacha economics better, we will focus our attention on demand stimulating of kwacha backed goods (my attempt at making Zambian production a kwacha issue). The country will aim at being better in production, consumption of kwacha backed goods, getting a fair share of the mineral worth, etc. This is a way of addressing the weaknesses in our approach to economic issues and will make sure we put in place policies, infrastructure, rules and ideas to work for and produce kwacha backed goods! Proudly Zambia - that's Kwacha backing!

We need this rebirth of reason to be channelled to and focus on kwacha backed ideas, goods, services, policies, etc

Debasing the Kwacha ...

Kwacha Economics has really taken an interesting twist this week. We are now thinking about debasing and the merits or demerits associated with it.

So let me add my voice to the debate. Clearly to correct what I have read and is out of line.

I feel good when i read about people talk about economic issues which make my daily life these days (can't believe I felt the same joy about Computers and IT a couple of years back!).

Rebasing on the Zambian kwacha should be viewed from an Economist point of view! I have been shocked by mis-leading statements about this and people will in the end be lost totally. We need to understand the fundamentals that control this in straight line and not assume the economics that is being dreamt about.

Rebasing the currency is redenomination which is different from devaluation. Wikipedia would simplify it better:

"Revaluation means a rise of a price of goods or products. This term is specially used as revaluation of a currency, where it means a rise of currency to the relation with a foreign currency in a fixed exchange rate. In floating exchange rate correct term would be appreciation. The antonym of revaluation is devaluation. Altering the face value of a currency without changing its foreign exchange rate is a redenomination, not a revaluation."

(I have read sites which have confused the two! Here)

On our case, only the face has been changed by deleting the extra three (3) zeros such that K5,000.00 will become K5.00 - simple! If you look at our currency now, K5000 is written as 5ooo (small zeros). Could be design or not, but assume the zeros are eliminated. So the new currency which will be printed will trade at the different rates. Such that, your K50,000.00 will be equal to K50.00. Hard to understand? Think of it this way, K5,000.00 is equal to $1.00, right? Assume now Kwacha2 is such that K5.00 is equal to $1.00. It simply means Kwacha2 K5.00 will be equal to K5,000.00 of the old kwacha (which we are using now). Put even simpler, its like changing kwacha to MaKwacha which is 1000 times more than the old kwacha.

There is no change in value. Just change in the face of the currency. if you go get a bag of mealie meal for K25,000.00 and you have K50,000.00, the store man will either give you K25,000.00 of the old currency or K25.00 of the new currency!

Bacause of the value being the same, it has no effect on imports or exports (all things equal as we love to say!). This is a redenomination and not a devaluation. It should be easier for people who transact across borders. You can either go buy a car in dollars or rands in durban! The vehicle worth K25 million will be the same if you buy it in Rands or Dollars. Your money simply changes faces (I know the differences in exchange rates will lead to some profit or loss, that's the exchange rate issue). All in all if you carry a stable currency like Euro and Pound, that element of loss or gain in exchanging them will be no more!

So why do countries redenomination? Simple, take our case in point. We have over the years been around the exchange rate of K5,000.00 to $1.00 if may fluctuate to K5,200.00 or K4,700.00 once in a while but we are stable in that region! So a redenomination will simplify our currency (like someone said, reduce the wheelbarrow to carry the money to pay for a car!). Will now only need K5.00 for $1.00! And can even bring back coins which are irreplaceable in some transactions like parking or toll-gates! Ever wonder why we have to buy tokens to play pool? In other countries you use your money in coins! So coinage will be part of the transaction!

There is also the issue of the buried K2.1 billions! People with buried money will either dig it up (so they exchange it for the new "currency" or lose the loot as it will only be worth to light the fire with! So it will rejuvenate transactions as there will be money which has been buried being dug up. And I hope some more people will be arrested for hiding the loot!

That is a simple explanation of what we will expect with this redenomination!!!

No Romance without Kwacha!

'No Romance without Finance...
You need a J.O.B if you wanna get with ME'

Some interesting words from one of the world's famous oldies song. So can this be a good thing to start stating the obvious that Valentines and romance in particular has been commercialized? Gone are the days that you could link romance with such things as the river, sunsets, star-gazing, etc. Nowadays, believe this formula has an interesting truth

Romance + $$$ = Love

Can it really?

Lusaka woke up on an interesting note today. I saw alot of Red - shirts, dresses, gift boxes, wrappers, etc. Some one even exclaimed "How romantic!!!" This got me thinking...

How possible is it to think of love without a link to finances. I couldn't find a simple path to such bliss. Most things love included has been commercialized and really now depends on exchange rates, bank account balances, liquidity, currency, buying rates, etc! Love and romance are in a financial economy! You need so many things to conduct romantic activities, from movies, to romantic outings!

Looking at the way, moneys seems to be running all aspects of our lives, I believe the cyber space is one which makes money be a little out of the picture. Only cost is the connection charges and sometimes thats not much when u browse on mobile devices for blogs. So if money matters that much, in cyber space it should be that much. So how do we link the financial aspects of the cyber space and romance? We need to geek out a solution - as geeks are the noble citizens of the cyber space.

To my suprise, googling Valentines for geeks was an interesting result. I found many presents with interesting price tags, from a few dollars to hundreds of dollars! Geeks spend money on valentines. So what would be the financial returns in the cyber space valentine's day? How can we measure the magnitude of 'geek love'? If cyber space can link with normal world in romantic values of every day life and presents, we need to find a way to value this and tax it!

I miss the days I would go online to shut myself from everyday life and troubles and just be. Now, I have to watch out for adverts, phishing sites, malware, spy-ware, etc. I believe the economists must come up with a way to value such elements and give chance to the tax man to collect some Kwacha.

Anyway, thats a comic way of enjoying valentines day. I think you can have a laugh at some of these geek links:

http://www.mb.com.ph/articles/304260/a-geeky-valentine

http://www.thinkgeek.com/interests/valentines/

http://walyou.com/gift-ideas-for-him-her-valentines-day-2011/

http://www.geeksaresexy.net/2009/02/07/the-geek-guide-to-valentines-day-gifts/

http://www.coolest-gadgets.com/20090209/11-geeky-or-gadgety-valentine-gifts/

Kwacha Economics - The Dawn

Welcome to my new blog dealing with economics issues.

I set aside most IT issues that I have blogged on, and take my time to look at issues in the economics arena.

Why Kwacha Economics?
Lets start with the definition of Kwacha Ngwee, it self, the money unit of Zambia. As wikipedia simply puts it:-
The name derives from the Nyanja and Bemba word for "dawn", alluding to the Zambian nationalist slogan of a "new dawn of freedom". The name ngwee translates as "bright" in the Nyanja language.

Need I say more? This is my new dawn of economics blogs. Let my thoughts make my economics come bright as the morning sun of a new dawn...