The Consumer Unity and Trust Society says the depreciation of Zambia’s currency to K10 against the major convertible currency will make it more expensive for the country to service debts accumulated in dollars.

CUTS Center coordinator Chenai Mukumba explained to News Diggers in an interview today that the devaluation in the local currency was likely to put a burden on the 2018 national budget because the country would be financing more than it borrowed.

“The depreciation of our currency in the last couple of weeks by over K10 against the United States Dollar is a very sad development and it’s now more expensive for us to purchase goods from outside the country than before. Importing is very good for foreign exchange because we need to import and export goods to strengthen our currency but if we don’t import then that means it is going to be difficult for Zambia as a country because this is only going to benefit those who want to buy things from Zambia and it will be cheaper for them to import, it will be too much cheaper for the external market to buy the Kwacha today given the current circumstances,” Mukumba said.

Mukumba said the devaluation of the Kwacha would place a burden on the 2018 national budget because the country would then be financing more than what it borrowed.

“What this means also is that all of the debt that we accumulated especially in Dollars will become much more expensive for us to service because the Dollar has become extremely expensive and this is going to be a burden on our 2018 budget because then we will be spending money in excess on things that were not budgeted for,” she said.

And Mukumba said she expected the general economic outlook to be difficult for Zambia under the current performance of the Kwacha.

“I think there is a number of very difficult things that are going to happen to the economy given the current state of the Kwacha. One of the things that are going to happen is that the economy is going to face a lot of difficulties, there will be less importation of goods and high exports which is going to benefit the foreign market highly and this will affect the local market and in the process trickle down to the consumers who will suffer the worst by purchasing goods at extremely high prices being the end users,” said Mukumba.