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Potential Impact of the Kwacha Appreciation on Zambia Agriculture

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Author Info
John Fynn
Steven Haggblade (Department of Agricultural Economics, Michigan State University)

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Abstract

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.

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File URL: http://www.aec.msu.edu/fs2/zambia/ps13.pdf
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Publisher Info
Paper provided by Department of Agricultural Economics, Michigan State University in its series International Development Collaborative Policy Briefs with number ZM-FSRP-PB-13.

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Date of creation: 2006
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Handle: RePEc:msu:icpbrf:zm-fsrp-pb-013

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Related research
Keywords: food security food policy Zambia appreciation impact

Find related papers by JEL classification:
Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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