On 12 June we learnt of The Bank of Zambia (Currency) Regulations, 2012, that were apparently passed on 7 May, came into effect on 18 May, and were posted on the BOZ website on 7 June. Despite the fact that our US dollar-based invoices have always included, according to previous law, a kwacha value (the other option on a foreign currency-based invoice is [or was] to include a conversion rate), it appears now that the mere mention of a foreign currency is illegal, and punishable by significant fines and/or jail terms.
Although NinerNet has clients in quite a number of countries around the world, in Zambia we operate through a locally-registered, turnover tax company named (believe it or not) “NinerNet Communications“. (Doing so significantly improves our ability to operate competitively in Zambia, and we have always been quick to point out to prospective Zambian clients that our invoices can be settled locally in kwachas.) As a result, our business in Zambia must be considered domestic, and so we are subject to this new law.
Unfortunately this news arrived too late for us to reconfigure and re-program our invoicing system in time for June’s invoicing. Therefore we will be adding prominent notices to our June invoice emails and the invoices themselves which indicate that, despite the presence of dollar amounts on the invoice, we “demand to be paid” in kwachas in accordance with section 4 of the new Regulations. To be clear, to comply with this law we can no longer accept payment in US dollars (or any other foreign currency) on “domestic transactions” in Zambia. In fact, we will be closing our dollar account in July.
By 1 July we will be issuing invoices denominated in kwachas only. We’ll also be adding a rates page for kwachas to our website, rather than simply referring clients to the US dollar rates. We’ll send a follow-up email to advise you of the new, fixed rates when they’re published. We have not finalised these yet, but we anticipate basing the new rates on an even exchange rate that hedges slightly against future variations. This will result in a price increase of about 87¢ … oops, I mean K4500 per month for those clients on our most popular hosting plan, with the benefit being that your invoice won’t fluctuate from month to month.
I welcome your feedback on this issue. The commenting system on this blog is not working (yet!), so please contact me through the contact form on the NinerNet website to let me have your thoughts. Thanks.