Zambia’s national prayers have been answered—it’s currency, the kwacha, is now the world’s best performer.
Late last year, president Edgar Lungu had been at his wits end with the kwacha in free-fall losing 45% versus the dollar in the year to October. In fact he felt the currency was under so much pressure he asked his country men and women to rally round and pray for its recovery.
“Our God has heard our cries, he has forgiven us our sins and we are sure he will heal our country (as) we face serious social-economic challenges,” said Lungu, a christian.
Well, it looks like their God did hear their cries.
The kwacha is back. It’s outperforming silver, gold and counterparts like the Brazilian real, to be the world’s best currency with a rise of 19.9% in value in 2016, according to analysis quoted by Bloomberg.
The kwacha is also benefiting from anticipation that Zambia’s main export, copper, is expected to see prices start to recover after several years of decline. There’s also increasing hope that a long mooted IMF loan will soon materialize to help the country meet its obligations.
There are still other challenges ahead though. Zambia is one of several southern African impacted by a drought in the region which is hurting its food supply. And the drought also severely impacts the country’s power supply because water levels in Lake Kariba are too low for its hydroelectric powered grid.