April 10, 2012 – Officially even today in Zambia coins do exist. There are 1, 5 and 10 kwacha coins and 25 and 50 ngwee coins (1 kwacha equals 100 ngwee). But how should one make much use of these denominations when in Zambia due to the huge inflation of the last decades an average salary is of about 3 million ZKW (ca. 427 euros / US$562)? The coin material is much worthier than the irrelevant face value. Today in Zambia, they say, you can find coins only in tourist shops …
However, on January 23, 2012 Zambia’s Finance Minister Alexander Chikwanda announced plans to “rebase” the currency system. In fact the idea is to lop off three zeros. Chikwanda said, “the rebasing had to be done when all the fundamentals like inflation and GDP [Gross Domestic Product] growth were right and we think they are now right.”
New and old banknotes and the new coins shall circulate simultaneously until the older ones will be withdrawn.
Inflation is the country’s primary problem. And there are voices warning not to endanger the weak acceptance of the kwacha completely by introducing banknotes and coins which do not correspond to the actual purchase power and needs of the people.
When this “rebasement” and the introduction of the coins will take place is not clear, yet.
Read an article on this topic here.
A critical voice has been published in the Sunday Times of Zambia.