Zambia Fires Back at EU: Diplomatic Storm Brews Over Parliament's Resolution!

A recent resolution by the European Parliament concerning Zambia's post-election situation and the killing of former minister Mutotwe Kafwaya has elicited a strong response from the Zambian government and ignited debate regarding its potential economic implications for the national currency, the kwacha.

Zambia's Foreign Affairs and International Cooperation Minister, Mulambo Haimbe, stated that the Government considers serious determinations concerning a sovereign state should be based on verified facts and informed by engagement with the concerned Government. Lusaka expressed its view that the resolution was adopted under an urgency procedure without prior engagement and before the publication of the EU Election Observation Mission’s final report. Consequently, Zambia has formally requested the EU Delegation in Lusaka to convene a partnership dialogue with the European Commission and European External Action Service. Regarding the August 14 incident involving Mutotwe Kafwaya, the Government clarified that investigations remain ongoing under police oversight and the Human Rights Commission, deeming it premature to characterize specific incidents as murder before the conclusion of investigations. Furthermore, allegations of arbitrary detention were rejected, with the government maintaining that opposition figures facing criminal charges are entitled to due process, legal representation, and fair trials, with judicial matters such as bail and trial dates falling under the purview of the courts, not the Executive. Despite these disagreements, Zambia reaffirmed its unwavering commitment to its longstanding strategic partnership with the European Union, highlighting continued cooperation in areas such as trade, investment, development, and critical raw materials.

Amidst the diplomatic developments, a significant argument has emerged on social media suggesting that the European Parliament’s resolution could weaken the kwacha. Financial Analyst Shadrick Lusambo, however, urges a clear distinction between political concerns and economic causation. He noted that while the resolution adopted on September 17, 2026, is a significant diplomatic development, it is economically irrelevant at this point, emphasizing that a parliamentary resolution does not automatically translate into a weaker currency.

Lusambo provided five key reasons why such a resolution does not inherently lead to kwacha depreciation. Firstly, the resolution does not create demand for US dollars. Currency depreciation occurs when demand for foreign currency strengthens relative to its supply, such as when Zambian companies need more dollars for imports or foreign investors withdraw capital. The European Parliament's vote does not directly trigger such foreign-exchange transactions. Secondly, the resolution has not imposed economic sanctions on Zambia. It is a political and human-rights resolution, not an announcement of Zambia being cut off from European markets, foreign investment, trade, development finance, or international banking. Sanctions, which would have material economic consequences, are not part of this resolution.

Thirdly, the kwacha is supported or pressured by much larger economic fundamentals. Data from the Bank of Zambia for the first quarter of 2026 showed a 14.8% appreciation against the US dollar, primarily due to strong foreign-currency inflows from the mining sector and foreign financial institutions. Major forces influencing the kwacha include copper export receipts, mining-sector dollar inflows, foreign investment, import demand, interest rates, international reserves, and market liquidity—forces far more impactful than a standalone EU parliamentary resolution. Fourthly, Zambia currently possesses important external buffers. As of the IMF’s May 2026 assessment, gross international reserves had risen to approximately US$6.4 billion, equivalent to about 4.4 months of prospective imports. Additionally, Zambia recorded a K4.1 billion trade surplus in July 2026. These robust economic indicators, driven by the country's ability to earn and attract foreign currency through exports and investment, cannot be nullified by a single EU resolution.

Finally, Lusambo highlighted that the real risk is not the resolution itself, but rather what could potentially follow it. While the resolution alone is unlikely to materially depreciate the kwacha, political developments can evolve into economic ones. Potential scenarios that could affect the kwacha include substantial foreign investors withdrawing capital, important development financing being suspended, serious deterioration in Zambia’s access to international financing, major damage to investor confidence, reduced foreign direct investment, or significantly weaker relations with major economic partners. In such cases, the depreciation would stem from these economic consequences, not directly from the initial political resolution.

In conclusion, it is crucial not to conflate every political headline with an exchange-rate forecast. While the European Parliament resolution warrants serious discussion regarding its allegations and Zambia's responses, from an economic perspective, it is distinct from sanctions, capital flight, a fall in copper exports, or a foreign-exchange crisis. The kwacha’s performance will ultimately be much more responsive to developments in copper prices, exports, foreign investment, reserves, government finances, inflation, interest rates, imports, and overall economic confidence. Therefore, while monitoring political events, one must 'follow the money' when analyzing the kwacha, as political headlines may influence sentiment, but money flows are what truly move currencies.