Public Unaware of New Zambia Currency|
May 01, 2013
The good news is that Zambia has issued a new “rebased” currency system that includes coins for the first time in years. The bad news is that the public is generally unaware the bank notes now in use will be withdrawn and demonetized on June 30.
Somebody must be aware of the change in coins and bank notes. According to the March 8 Lusaka Times newspaper, one unnamed individual has been arrested for cutting out pictures of the new bank notes displayed publicly on postures, then gluing and laminating the front and back together, planning on spending the concoction.
But, while Bank of Zambia Public Relations spokesman Kanguya Mayondi has recently informed the press the central bank has withdrawn about 3.2 trillion kwacha (3.2 billion kwacha value at the value of the rebased new currency) there are indications the public is oblivious to what is going on, and that there is a shortage of the new coinage for circulation.
Mayondi told the press the central bank is on schedule to withdraw all of the older currency prior to its self-imposed June deadline. The older currency will be able to be redeemed through Dec. 31.
The public, unfortunately, isn’t fully aware of the changes taking place. In early March local newspapers reported Bank of Zambia officials visiting a district of Mumbwa, where a survey of markets and shops indicated the public is generally ignorant of the changes taking place.
According to the Lusaka Times, “Mumbwa Market Chairperson Humphrey Shamasale said although people in the [Mumbwa] township were responding well to the new cu
rrency they have no adequate knowledge on the conversion of smaller [bank] notes to coins.” The newspaper continued, “Mr Shamasale said traders are not conversant especially on the 5-, 10-, and 50-ngwee [coins] as they have problems to equate them to the old 500-, 100-, and 50-kwacha notes. Another businessman of Asian origin complained of inadequate supply of coins which makes the public to resist acceptability.”
The rebased kwacha currency system in theory will help alleviate inflation by removing three zeros from all bank notes, while re-introducing coins for the lowest denominations. The 2013 bank notes recently introduced are in denominations of 100, 50, 20, 10, 5, and 2 kwacha, while coins have been released in denominations of 1 kwacha and 50, 10, and 5 ngwee. It takes 100 ngwee to equal one kwacha.
Zambia’s currency was decimalized through the Currency Act of 1967. The Zambian pound was replaced with the kwacha, with the official rate equaling one half of the old monetary unit or one US dollar.
Zambia introduced coins in denominations of 1, 2, 5, 10, and 20 ngwee in 1968. A 50-ngwee coin was added to the mix in 1979, replacing a bank note of the same denomination. Production of the 1 and 2 ngwee ceased in 1983, followed by the demise of the 5 and 10 ngwee in 1987 and of the 20 ngwee one year later. In 1989 a 1-kwacha was introduced, but was short lived in circulation due to spiraling inflation.
There was an attempt to re-introduce coins in 1992, but as inflation continued this too became a short-term experience. The 1992 issue involved 25- and 50-ngwee and 1-, 5-, and 10-kwacha coins.
All of these past coins are still legal tender in Zambia, however the value of their metal content exceeds their legal tender face value. Sources indicate these coins are sold to tourists, but are never used in circulation.
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