During the UNIP rule, Zambia had very few millionaires; in fact, people almost worshiped anyone who crossed the million kwacha mark. Today, a million means nothing more than a shopping fling at Arcades or Manda Hill and usually it’s not enough to cater for the needs of the normally large Zambian families.
Next month, the country will again have very few millionaires when the government rebases the Kwacha. Millionaires will be very rare when three zeros bid farewell to our currency. The biggest note will be K50, the equivalent to what we now know as the 50 pin.
To make a million, one will need the equivalent of a billion kwacha. The million as will know it will be reduced to a mayor one pin. But don’t despair, that one pin will definitely take you shopping and pay for your expenses as its value will still correspond to K1, 000, 000.
Actually worrying about having three zero figures in one’s account is misplaced. The worry should be more on what the rebasing of the currency will do to the economy, in particular its effect on inflation.
The Jesuit Centre for Theological Reflections (JCTR) addressed that concern in its position paper on the topic.
“It should be noted that rebasing is not an end in itself and will not bring about the meaningful development that Zambian’s need,” JCTR stated.
JCTR notes that while currency rebasing is an acceptable economic exercise for countries, it is largely neutral on the quality of life of people as it doesn’t change the buying power of the currency.
“Rebasing may enhance confidence in the currency in the short run, but it is important to realize that it may fuel inflation especially in the absence of other initiatives to tame inflation. People always have an illusionary feeling that they have lost buying power and thus tend to increase price of goods and services. The transition must therefore be managed to maintain people’s confidence in the currency by widely disseminating information on the rebasing exercise.”
And reacting to information that the exercise of rebasing the kwacha was not budgeted for in the current fiscal year, JCTR. is demanding an explanation from the government on the total cost of the project and also to advise the country on the source of funding.
“If the country fails to instill discipline in the way we spend public resources, the three zeros that we are knocking off from the currency now will soon resurface,” JCTR warned.
