From Exchange Gains to Business Growth: How the Kwacha Is Changing Zambia’s Market”

By Alain Kabinda

Zambia’s strengthening currency is creating renewed optimism among businesses, with economists and market players pointing to growing opportunities for importers, retailers, and small and medium enterprises (SMEs) as the Kwacha gains value against the United States dollar.

Recent market analysis shows that the Kwacha has appreciated from approximately K22.19 to around K17.88 per US dollar, representing a gain of nearly 20 percent over the period under review.

Speaking to Daily News in a phone interview, Business Development and Marketing Expert and Co-Founder of CNC360 Consulting, Mr. James Chiwala, stated that the development reflects a combination of economic interventions and stronger foreign exchange inflows into the economy.

                                                                    (Mr. James Chiwala)

Mr. Chiwala also said that among the factors cited are improved earnings from Zambia’s mining sector, particularly higher international copper prices, alongside monetary interventions aimed at stabilizing currency markets and managing inflation.

For businesses that rely heavily on imported goods and services, the stronger Kwacha is beginning to reshape cost structures.

He added that Importers of machinery, industrial equipment, vehicles, electrical appliances, construction materials, clothing, footwear, and production inputs now require fewer Kwacha to purchase the same amount of foreign goods.

“This shift could create room for businesses to lower operational costs, expand inventories, and improve profitability,” Mr. Chiwala said.

For SMEs, which often operate with tight margins and limited capital, exchange rate stability offers an opportunity to recover from periods of high import costs and currency volatility.

Lower costs of importing equipment and raw materials could enable small businesses to reinvest savings into expansion, innovation, and job creation.

Mr. Chiwala noted that sectors such as retail, manufacturing, agriculture, transport, and construction stand to benefit significantly if the trend continues.

Vehicle importers and dealerships may also see improved purchasing power, potentially influencing the affordability of selected vehicle categories in the local market.

At the consumer level, expectations are rising that stronger currency performance could eventually ease pressure on prices. Although exchange rate improvements do not immediately translate into lower retail costs, sustained appreciation can gradually reduce import-driven inflation.

“Products already entering the country at lower exchange costs may become cheaper over time if businesses pass savings to consumers,” Mr. Chiwala said.

Mr. Chiwala also warned that exchange gains alone cannot solve broader structural economic challenges.

“Businesses are being encouraged to use the period of currency strength strategically rather than viewing it as a permanent condition. Investment in local manufacturing, productivity improvements, supply chain efficiency, and reduced import dependency remain critical for long-term resilience,” Mr. Chiwala said.

Mr. Chiwala further noted that maintaining currency stability will require continued coordination between monetary policy, export growth, investor confidence, and broader economic reforms.

For Zambia’s business community, the stronger Kwacha represents more than an exchange rate story—it is emerging as a test of whether lower import costs can translate into greater investment, competitive pricing, and stronger economic growth.

As companies adjust to changing market conditions, many will be watching closely to see whether today’s currency gains become tomorrow’s business expansion and consumer relief.

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