There are plenty of articles stating that while in Zambia it was common to accept USD as currency, this is no longer true, and instead now everyone has to use the local currency ZMW.

None of the articles I've managed to find, however, explains neither why did Zambia chose to enact such a policy, nor how are they enforcing it.


  1. other than "having dual currencies is generically bad", is there a more specific reason? (official, semi-official, or speculated by educated sources)

  2. what is someone trading USD (or other currencies) facing? a fine or jail or worse?

  3. are there additional limitations for Zambian citizens, like in Argentina?

1 Answer 1


Zambia stopped accepting any foreign currency when The Bank of Zambia (Currency) Regulations (PDF) came into effect on May 18, 2012. The core requirement of these regulations is that all invoices must be in kwacha. There appears to be no issues with selling or purchasing foreign currency, provided the transaction happens through an authorized foreign exchange dealer.

A new set of regulations was announced on May 5, 2013. It allows for tighter monitoring of the inflow and outflow of goods, services, and money:

In relation to outflows, the Bank of Zambia shall monitor:

a) the value of any imported goods;
b) the value of any imported services, including management services;
c) any amounts remitted out of Zambia whether unrequited (gratuitous) or otherwise;
d) the amounts, if any, deposited abroad but generated by a person resident in Zambia from the supply of goods produced or services rendered in Zambia;
e) loans granted to non-residents;
f) trade credits from non-residents;
g) investments made in the form of equity outside Zambia by persons resident in Zambia; and
h) investments made in the form of debt securities outside Zambia by persons resident in Zambia.

In relation to inflows, the Bank of Zambia shall monitor:

a) the value of any goods or services exported out of Zambia; b) profits or dividends received in respect of investments abroad; c) borrowings from non-residents; d) trade credits to non-residents; e) investments in the form of equity from abroad; f) investments in the form of debt securities from abroad; and g) receipts of both principal and interest on loans to non-residents.

The Bank of Zambia shall also, in relation to international transactions, monitor:

a) the value of imported or exported manufacturing services or goods to or from non-residents;
b) the net cost effect of telecommunication services;
c) the value of international transport, courier and postal services;
d) the value of accommodation and other hospitality services to or from nonresidents; and
e) international money transfers into and out of Zambia.


The primary motivation for these regulations seems to be a desire to put an end to the enormous capital flight Zambia has suffered in previous years:

Almost $9 billion was illicitly siphoned out of Zambia, Africa's top copper producer over the last decade, according to a report by a U.S. anti-graft watchdog, which highlights how resource wealth is often squandered in the developing world.

The amount is almost half the size of Zambia's current gross domestic product and much of the money would have been channeled to offshore banks and tax havens, draining one of the world's poorest countries of badly needed capital.

The Zambian government said the report was in line with its own findings and vowed to crack down on culprits.

Source: Zambia loses almost $9 bln in capital flight in past decade, Reuters

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