Potential Impact of the Kwacha Appreciation on Zambia Agriculture

The rapid recent appreciation of the Kwacha has placed these gains at risk. The sudden strengthening of the Kwacha since November 2005 has reduced the Kwacha value of agricultural exports by 30%, forcing reductions in farmgate prices and eroding exporter profit margins. As in a classic case of Dutch Disease, large inflows of foreign exchange–whether from surging international copper prices, foreign aid or speculative financial inflows–have contributed to the strengthening Kwacha. The subsequent rapid appreciation of the Kwacha risks making much of Zambia’s export agriculture uncompetitive on world markets.


Subject(s):
Issue Date:
2006
Publication Type:
Report
PURL Identifier:
http://purl.umn.edu/54617
Total Pages:
6
JEL Codes:
Q18
Series Statement:
Food Security Research Project- Zambia, Policy Synthesis
13




 Record created 2017-04-01, last modified 2017-04-04

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