Authors: Katongo Auxillia
Abstract: The depression of the Zambia kwacha against major affiances directly raises operational costs for Small and Medium Enterprises (SMEs) because most are imparted even and must pay more kwacha for raw materials, goods, fuel, and equipment which erodes profitability and straits working capital. Using Kasama based SMEs as context, the study identifies the currency depreciation primarily increasing operating costs as cross border traders see capital eroding with profits per unit dropping sharply when they can no longer afford to travel to Nakonde border for stock. This is because weaker kwacha increases imparted costs, forces price adjustments, disrupts financial planning and pushes up transport expenses and contributing to job cuts. Repayments are harder especially for SMEs with USD – denominated debts and high interest rates triggered by currency volatility leading to slow business activity sometimes leading to closures.
DOI: https://doi.org/10.5281/zenodo.19862491
