It is happening much later than originally expected, but it is finally happening and the official date has now been announced – 1 January 2013 – the date when our currency will be rebased. This is not a bad thing.  In fact, it is a good thing and it is long overdue; like ten or fifteen years overdue.

Normally rebasing is done during periods of low and stable inflation. In our case, inflation has generally been in single digits for the last five years. Thus, at the end of last year, it was believed that the time had come to rebase our currency. We would agree with that except that with some of the changes and developments over the last few months, one hopes that our rebased currency does not become a debased currency.

There are many advantages of a rebased currency which we don’t need to point out to our readers.  Having said that, we can say with certainty that there will a great of deal of confusion amongst some of the lesser educated members of our society although we also know that the Bank of Zambia are conducting education campaigns around the country. Let us hope that they get into the deepest rural areas as this is where the most confusion is going to be found and these are the people that really need to be educated as they are most at risk of being ripped off by the unscrupulous.

The highlights of the rebasing of the Kwacha are that, with effect from 1 January next,:

– the last three zeroes will be dropped. Thus your fifty pin note will now become a fifty Kwacha note;

– what now costs one hundred and eighty pin will now cost one hundred and eighty Kwacha

– the code for the Kwacha will change from ZMK to ZMW. The ‘W’ is derived from the second letter of the word KWACHA Let us hope that there is not any confusion with the MalaWi Kwacha with the change to ZMW.

– the new currency (as per the samples printed here) will comprise notes and coins and we will start using Ngwee’s again

– commercial banks will be the main conduit through which members of the public will obtain the new currency. But as time progresses, new currency will be handed out as change etc. Where there are no commercial banks, Post Offices and other agents appointed by BOZ will take on the responsibility for distribution of the new currency

– the limit for over- the-counter currency exchanges will be limited to ZMK 25,000,000 / ZMW 25,000

– the transition period will be from 1 January until 30 June 2013. From that date until 30 June 2014, currency exchanges will only conducted at BOZ, commercial banks and designated agents. From 30 June 2014 until 31 December 2015, currency exchanges will only be done by BOZ.

– during the transistion period, businesses will price their goods with the symbol ‘KR’ which will be the rebased Kwacha value. After the transition period is over, we will revert to the use of the symbol ‘K’

– Effective 1 to 31 December 2012, businesses may display prices in both the old currency (K) and the rebased currency (KR). However, from 1 January to 30 June 2013 i.e. the dual display of prices by all entities will be mandatory.

– during the six months transition phase cashiers shall give change for all transactions in rebased currency. Where there is insufficient rebased currency, cashiers shall give first preference to the rebased currency followed by the old currency.

– amounts shown on ATMs will be expressed in the rebased currency, as will any statutory returns such as VAT etc.

– all cheques issued before 1 January 2013 will be in the old currency. All cheques issued before this date but only presented for payment after 1 January 2013 will be paid with the amount divided by 1,000.  Cheques dated 1 January 2013 and later shall be assumed to have been issued in rebased currency and will be paid on face value.

– from 1 January 2013, we can go back to using normal wallets or purses instead of having to carry about wads of notes

There is obviously much more that will be going on in the background by businesses, such as adjusting accounting programmes, but the above are the most important points that consumers need to know. Information that is required for businesses is available on the BOZ website (www.boz.zm)

We look forward to 1 January, the date when we will all have less money in our pockets.