Kwacha Dominates Domestic Transactions

At the tail end of 2025, the Bank of Zambia introduced new Currency Directives requiring that domestic transactions be settled in Zambian Kwacha, with a defined list of exemptions.

For the property sector, this was a significant shift. Real estate in Zambia has operated with dollar pricing for many years — largely as a way to manage inflation, long development timelines and dollar funded projects.

As an industry, we didn’t sit on the sidelines. Through the Zambia Property Owners Association (ZAPOA), a formal submission was made to the Bank of Zambia outlining practical concerns and lessons from past experience.

Now that the final regulations are in place, it’s useful to step back and look at:

• what the industry raised,
• what the final directives addressed,
• what wasn’t fully dealt with,and what early signals might (and might not) be telling us.

What the Property Industry Raised as Key Concerns

The concerns raised weren’t about resisting change. They were about how change plays out in the real world, especially in a sector that depends on long-term planning and investment.

In summary, the industry flagged the following:

• We’ve been here before
  Previous currency controls (like SI 33) led to short-term currency gains, followed by volatility, higher inflation and reduced foreign investment.
  
• The wider economic context was already fragile
  Drought conditions, load shedding, rising food prices and forex pressure were already affecting both households and businesses.
• Foreign investment matters to property
  Many major developments are funded in dollars due to lower interest rates. Forcing Kwacha-only income without addressing dollar loans creates real risk.
  
• The sector is still recovering
  Property hasn’t fully bounced back from COVID-19. Vacancies rose, rents softened, projects were delayed and recovery has been gradual.

The industry asked for either a delay until economic conditions improved, or for the property sector to be treated differently, given its structure and funding realities.

What the Final Currency Directives Addressed

When the final Currency Directives were issued, some important points were clarified.

In particular:

• Contracts can still be denominated in foreign currency, but settlement must happen in Kwacha
• Payments are converted using the market exchange rate, or the Bank of Zambia mid-rate if there’s a dispute
• Existing foreign-currency liabilities with banks and regulated financial institutions are recognized
• Penalties were more moderate than earlier proposals

This helped bring clarity around how transactions are meant to work in practice, which was a key concern for many businesses.

What Was Not Fully Addressed

At the same time, some of the core issues raised by the property sector weren’t fully resolved.

• Real estate was not included on the exemption list
• The mismatch between Kwacha income and dollar debt remains
• There’s no clear transition framework for long-term leases or multi-year payment plans
• The potential impact on future foreign direct investment hasn’t been directly addressed

In simple terms, a lot of the risk hasn’t disappeared — it’s just shifted onto developers, landlords, tenants and buyers.

Early Signals: A Stronger Kwacha — But Let’s Pause

In just the first month of the year, the Kwacha has strengthened by around 12%.

On the surface, that looks positive — and in some areas of the economy, it may well be. But property doesn’t respond overnight.

Real estate is a slow-moving sector. Decisions around land, construction, financing, pricing and affordability play out over months and years, not weeks.

A stronger Kwacha could help reduce imported construction costs.
It could also create uncertainty for investors who need long-term stability to commit capital.

Right now, the honest answer is this: it’s too early to tell.

What This Means for Diaspora Buyers

If you’re in the diaspora and thinking about buying or building back home, this isn’t a moment for panic — or for rushing.

Policy changes like this take time to settle. They affect how prices are structured, how payment plans work and how developers manage risk.

What matters most hasn’t changed:

• Understand how pricing is being set
• Be clear on currency exposure
• Ask questions until things make sense
• Work with professionals who understand both the rules and the reality on the ground

Clarity is still your best protection.

Taking the Long View

The intention behind reinforcing the Kwacha as legal tender is clear. Whether these regulations ultimately strengthen or strain the property market will depend on how they interact with economic conditions over time.

For now, the most responsible approach is to watch carefully, unpack the effects properly and avoid jumping to conclusions based on early movements.

At Diaspora Connect, that’s exactly what we’re doing — staying close to the detail and helping our clients make informed decisions without the noise.

This conversation is not over. It has only just begun.