Zambia’s worsening shortage of foreign exchange as well as one of its worst droughts in recent memory saw the local currency drop to a record low of K27.3 to the dollar. As explained in the report, the kwacha has lost as much as 17% in the past six months. Forex Shortages: The Impact of Drought […]
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More Than 250 Zambian Students Attend Hackathon; Over 100 Earn Smart Contract Development Certification
More than 250 Zambian university students recently participated in an online boot camp and hackathon which saw over 100 earning certification in smart contract development. The students who complete their minimum viable products (MVPs) can apply for grants ranging from ,000 to ,000. Students Trained in Decentralized Application Development More than 250 students from St. […]
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Report: Zambian Currency Poised for First Quarterly Decline Since 2020
The Zambian kwacha, one of the best-performing currencies in 2022, is now expected to see its first quarterly decline in nearly two years. The Zambian leader Hakainde Hichilema claimed that stalled debt restructuring negotiations are adding to pressure against the local currency.
Zambia’s Debt Default
After ending 2022 as one of Africa’s best-performing currencies, the Zambian kwacha depreciated from 18 units of the local currency for every dollar on Jan. 1, to slightly more than 21 units per dollar by March 31. In addition, a report by Bloomberg has said the kwacha is set to realize its first quarterly decline since Q1 of 2020.
At that time, the kwacha’s drop versus major currencies was attributed to fears Zambia would become the first sovereign defaulter on the African continent. A few months later, Zambia, which was then led by Edgar Lungu, would become the first country from the continent to default. However, following Lungu’s departure in August 2021, the Zambian kwacha’s value surged from around 19.34 units per dollar (ZMW19.34:$US1) to 15.3:1 on Sept. 2, 2022.
As previously reported by Bitcoin.com News, the currency’s rebound was spurred by reports that the International Monetary Fund (IMF) had approved a bailout package for Zambia. However, since the beginning of the year, the kwacha has lost ground against the U.S. dollar and other major currencies.
In an op-ed published in the Washington Post, President Hakainde Hichilema seemingly blamed the “cumbersome and bureaucratic” debt restructuring process for causing delays in finalizing his country’s planned reforms. According to the Zambian leader, such delays “are putting pressure on the local currency.”
Meanwhile, the Bloomberg report suggested that a weakened kwacha and a resurgent inflation rate are likely to prompt another rate hike by the Zambian central bank.
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Zambian SEC Warns Investors About Scam Cryptocurrency Investments
The Securities and Exchange Commission of Zambia has issued a caution to the public to beware of scammers operating cryptocurrency investment advice services. The financial regulators received information about a company called KWAKOO that was pushing an initial coin offering with dubious future price predictions.
The nation’s SEC has stated that the firm is not registered with it and is therefore not qualified to give financial advice about securities. It reminds the public that only companies approved by the regulator may issue such investment advice.
Cryptocurrency Investment Advisers In Breach of Zambian Securities Act
The Zambian SEC has stated that KWAKOO’s promotion of the initial coin offering for the cryptocurrency Onxycoin was in violation of the Securities Act, No. 41 of 2016. According to a report in domestic news publication Lusaka Times, the company was advising clients to invest in various Onxycoin packages.
Those behind KWAKOO are believed to have told would-be investors to expect gains of 1,000 percent by June 2021. The head of the regulatory body, Philip Chitalu, told the publication that any person promoting or providing investment advice for assets deemed as securities must either be registered with the SEC or be exempt from the law as per the Securities Act.
Chitalu went on to state that the kind of presentations and advice provided by KWAKOO qualify as investment advice under the nation’s financial regulations. He added that since KWAKOO was not registered with the SEC, it fell foul of the Securities Act and was thus acting unlawfully in promoting the Onxycoin cryptocurrency.
Finally, Chitalu stated that SEC’s role was to protect investors from dubious claims such as those made by KWAKOO.
KWAKOO and Onxycoin themselves are closely tied. The CEO and founder, apparently Sir Anthony Saint according to Onxycoin’s Facebook page, posts many of the updates about the cryptocurrency on the social media site. However, that’s not all about Onxycoin that sounds more than a little dubious.
The project’s website is completely focused on how Onxycoin holders can make returns on their investments. There is little information about what makes the coin different from the thousands of other cryptocurrencies out there other than perks for investing early.
In terms of an overall project description the website’s landing page offers only:
“OnyxCoin is one of the most transformative technologies since the invention of the Internet. OnyxCoin stands firmly in support of financial freedom and the liberty that Bitcoin provides globally for anyone to voluntarily participate in a permissionless and decentralized network.”
The real red flag, however, is the referral bonus. An absolute hallmark of a classic ponzi scheme:
“OnyxCoin Affiliate program was structured provide value to all those who participate in our Public Sale. 35% of the money collected through our OnyxCoin Public Sale will be paid back to investors through our Referral and Binary Earnings. By leveraging your networks, you can get instant earnings with our platform.”
Related Reading: Is Largely Unbanked Africa Primed for Bitcoin Adoption?
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