The Bank of Zambia recently proposed a de-dollarization policy aimed at strengthening the local kwacha, the sole legal currency for domestic transactions. The proposed guidelines require that all public and private transactions in Zambia be conducted in the local currency. Violators could face up to 10 years in prison or a hefty fine.
The new currency rules are still in draft form and under negotiation, but concerns are growing in the tourism industry.
In response to the initial draft regulations, tourism organization Africa's Eden has published a document clarifying the impact of the policy on the sector. It is noteworthy that the draft regulations include specific exemptions for tourism.
• Foreign tourists can continue to pay for tourism services in foreign currency.
• Tourism businesses registered under the Tourism and Hotel Industry Act are exempt from restrictions on receiving foreign currency payments.
• The Company may continue to quote prices in U.S. dollars when dealing with international companies.
Africa's Eden urged tourism businesses to stay informed of the legislative process and adapt where necessary, but stressed that there were no immediate changes to current practices and that Zambia remained open and welcoming to international visitors.
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The proposed dollarization policy reflects a broader trend across African countries to strengthen their currencies and reduce their reliance on the US dollar.
