The kwacha is the currency of Zambia. It is subdivided into 100 ngwee.

Summary info

Summary information about Zambian kwacha

ISO 4217 Code:

ZMK

Currency sign:

ZK

Country:

Zambia

Subunit:

ngwee

Coins:

None

Banknotes:

50 kwacha, 100 kwacha, 500 kwacha, 1 000 kwacha, 5 000 kwacha, 10 000 kwacha, 20 000 kwacha, 50 000 kwacha

Central bank:

Bank of Zambia

History

The Kwacha (ZMK) is the current legal tender of the Republic of Zambia.The Zambian Kwacha (K) is divided into 100 Ngwee.

David Livingstone reached the upper Zambezi River in 1851, and emissaries of Cecil Rhodes and the British South Africa Company concluded treaties with most Zambian chiefs in the 1890s. Northeastern Rhodesia and North Western Rhodesia, which were administered by the British South Africa Company, were united as Northern Rhodesia in 1911. Northern Rhodesia became a British Protectorate in 1924 when the government took over administration from the South African Company. Zambia was part of the Federation of Rhodesia and Nyasaland (comprising present-day Malawi, Zambia and Zimbabwe) from August 1, 1953 until December 31, 1963. Northern Rhodesia became independent Zambia on October 24, 1964.

South African coins circulated between 1923 and 1933, and beginning in 1932 the Southern Rhodesia Currency Board issued coins for Zambia. British Pound Sterling (GBP) coins circulated in Northern Rhodesia and remained legal tender until December 31, 1954. Banknotes issued by the Standard Bank of South Africa, National Bank of South Africa and Barclays Bank DCO also circulated, though these banknotes were issued in Salisbury (Harare) rather than in Northern Rhodesia.

When the Southern Rhodesia Currency Board was established on November 1, 1940, these banknotes lost their legal tender status on March 1, 1942. The Southern Rhodesia Currency Board issued its own pound (RHSP) and Northern Rhodesia became part of this arrangement in 1943-1944. The currency board’s name was changed to the Central African Currency Board on March 12, 1954 and Northern Rhodesia (Zambia) and Nyasaland (Malawi) gained a larger role in the new currency board. Coins issued by the Currency Board then replaced the British coins that had circulated until that point. The Bank of Rhodesia and Nyasaland was founded on April 1, 1956 and became the Central Bank for the Federation of Rhodesia and Nyasaland, issuing the Rhodesia and Nyasaland Pound (RHFP).

Prior to independence, notes and coin in denominations of £10, £5, 10s and 5s, 2s-6d, 2s, 1s, 6d, 3d, and 2d circulated in the country as legal tender. After independence, the Bank issued the first Zambian notes and coin in similar denominations, although different in design. In order to allow for a smooth changeover, the two currencies circulated alongside each other until December 15, 1965, when the old currencies were withdrawn from circulation for subsequent demonetization, except for the 3d coin which continued to circulate, for a brief period. Together with the Zambian £. s. d. currency, a 5s proof coin to commemorate independence was issued. It was later followed by an ordinary 5s coin for circulation purposes.

In 1967, the Government decided in favour of decimalisation and designated the main unit as Kwacha comprising of 100 ngwee. The Kwacha was equivalent to the old ten shillings. The Currency Act, 1967 replaced the Zambian £. s. d. currency for new Kwacha notes, and ngwee coin. Thus on January 16, 1968, the Zambian Pound was replaced by the Kwacha with the new Official Rate equal to one half the old unit, or US$1.40. The £5 note became K10, the £1 note K2, then ten shilling note one Kwacha note and a new 50 ngwee note was introduced to correspond to the old 5 shillings, 2 shilling coin became 20 ngwee, one shilling coin became 10 ngwee and 6 pence became 5 ngwee. At the same time, the currency was decimalized.

Following the de facto devaluation of the U.S. Dollar on August 15, 1971, the Kwacha, through its link to the Pound Sterling fixed at K1.7094= £1.00, began to appreciate vis-a-vis the American unit, beginning August 23rd. On December 3rd, Zambia broke her currency's ties to the British unit and attached the Kwacha to the U.S. Dollar, thereby reestablishing the Official Rate of US$ 1.40, a de facto devaluation. In the wake of the U.S. Dollar devaluation on December 18th, the Kwacha gold content was reduced 7.89% on December 22nd, thus paralleling the American unit's devaluation and leaving the Official Rate unchanged. A 4.5% fluctuation range for the Kwacha was also introduced. With the dismantling of the Sterling Area on June 23, 1972, along with the floating of the Pound Sterling, Zambia relinquished the monetary privileges she had enjoyed as a member of the Area. Following the U.S. Dollar devaluation in February 1973, the Official Rate of the Zambian currency was realigned to US$1.555, effective February 15th, based on the Kwacha unchanged gold content. There are no minimum reserve requirements of gold and foreign exchange for the nation's currency. Again, a change-over period was allowed to complete the withdrawal of Zambia £. s. d. notes and coin from circulation and these ceased to be legal tender on January 31, 1974.

In commemoration of the Food and Agricultural Organisation Day (F.A.O.), the Bank also issued a 50 ngwee F.A.O. proof coin for numismatic collection. Later as the need arose to bridge the gap between 20 ngwee and the K1 note, an ordinary 50 ngwee F.A.O. coin and 50 ngwee coin of new design were simultaneously put into circulation towards the middle of 1971. A K20 note was also introduced during the same period.

With the advent of the One Party Participatory Democracy, the Bank issued a commemorative K1 note to join the rest of the nation in celebrating the birth of the Second Republic on December 13, 1973. Finally, the bank changed the colour of the 50 ngwee note in order to eliminate the confusion that appeared to exist between the 50 ngwee and the new K5 notes, hence the multi-coloured 50 ngwee note made its first appearance in April 1974.

Coins

In 1968, bronze 1 and 2 ngwee and cupro-nickel 5, 10 and 20 ngwee were introduced. These coins all depicted president Kenneth Kaunda on the obverse and flora and fauna on the reverse. A twelve sided 50 ngwee coin was introduced in 1979 to replace the 50 ngwee note and featured commemorative FAO themes.

In 1982, copper-clad-steel replaced bronze in the 1 and 2 ngwee. These two were struck until 1983, with production of the 5 and 10 ngwee ceasing in 1987 and that of the 20 ngwee in 1988. Nickel-brass 1 kwacha coins were introduced in 1989 and depicted "Bank of Zambia" on the edges. The period of circulation for this coin was brief as inflation rates skyrocketed.

In 1992, a new, smaller coinage was introduced consisting of nickel-plated-steel 25 and 50 ngwee and brass 1, 5 and 10 kwacha. The coins depict the national crest on the obverse and native fauna on the reverse. The coins were issued only one year and then discontinued as the economic crisis dragged on.

All these coins, both from the older and newer series still remain legal tender. However, the value of the metal in the coins is worth more than their irrelevant face value, so they are never seen or used in normal trade. The only place coins might be seen today is when they are sold as souvenirs to tourists.

Banknotes

The Currency Act of 1967 replaced the Zambian pound, shilling, pence currency for new kwacha and ngwee currency. Thus on 16 January 1968, the Zambian pound was replaced by the kwacha with the new official rate equal to one half the old unit, or US$1. The 5-pound note became 10 kwacha, the 1-pound note 2 kwacha, the 10-shilling note 1 kwacha, and a new 50-ngwee note was introduced to correspond to the old 5 shillings. At the same time, the currency was decimalized.

5 kwacha notes were introduced in 1973, the same year that the last 50 ngwee notes were issued. 50 kwacha notes were introduced in 1986, with the 1 kwacha note being replaced by a coin in 1988. 100 and 500 kwacha notes were introduced in 1991, followed by 1000, 5000 and 10,000 kwacha in 1992, when the 5 and 10 kwacha notes were replaced by coins and the 2 kwacha discontinued. In 2003, 20,000 and 50,000 kwacha notes were introduced.

Until 1991, all Zambian banknotes featured a portrait of President Kenneth Kaunda on the obverse. Since 1992, all notes have instead featured a fish eagle on the obverse. Since 1989, all the reverses have featured the Chainbreaker statue. In 2003, Zambia became the first African country to issue polymer banknotes. The 500 and 1000 kwacha are both printed on polymer.

Although the 20 kwacha note is still in circulation, such is the rarity of this note that most major retailers will round prices up to the nearest 50 kwacha when calculating a total. Most items in major supermarkets are displayed using 20 kwacha in the value (e.g., 1980 kwacha).

ZMK banknotes pictures gallery

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Useful links

About Bank of Zambia:

Bank of Zambia

List of currencies:

Currencies

Security and design features of ZMK banknotes:

ZMK banknotes

ZMK currency on Wikipedia:

Zambian kwacha

Official Website of Bank of Zambia:

www.boz.zm

Commemorative coins:

Commemorative Coins