The Kwacha, The Peace Corps, and My Rising Debt

Peace Corps is a volunteer organization and I never lose sight of that, however just because Volunteer is in my title, doesn't mean that I don't constantly consider and think about what I get paid... excuse me, what my "volunteer living allowance" is.

Currently my allowance is roughly 2,500 Zambian Kwacha per month for my serving as a Peace Corps Volunteer.  That's not a lot of money and with current exchange rates (7.3 Zambian Kwacha to one US Dollar) that is about the equivalent of $342 per month, plus or minus a few pennies - sometimes a few dollars.  Again, that's for the ENTIRE month.

This screen shot shows the Kwacha over the past few weeks.  The spike is when the Kwacha was tumbling.  It's come down a bit since, but it's still far removed from the better exchange rate that was in place when I first came to Zambia (K4.9 to $1).

When I first started as a Peace Corps Volunteer in 2012 things were very different.  We didn't get paid as much as we do now.*  At the time I was paid the regular volunteer rate of something like 1,500 Kwacha per month, except at that time the Kwacha was very different - there were multiple zeroes at the end.  We were paid 1,500,000 per month and it will surely be the only time in my lifetime that I'll make over a million per month.  That all changed on Jan. 1, 2013, when the Zambian government dropped three zeros and I went from being a millionaire to making less than two thousand per month.  

But also at this time the exchange rate from Zambian Kwacha to American Dollars was vastly different.  The going rate was something like 4.9 Kwacha for one United States Dollar - a greenback.  I was doing okay.  I was making $50 less than I do now, but with a lack of things to spend money on in the village I was putting a lot of it away.  (Although I still managed to run out of money twice, and it wasn't until I learned to live within a budget in a foreign country was I then able to actually save my money and live like an adult should, which - to me - meant saving that extra money for vacations).

Time has passed, my job has changed, the Kwacha has dropped, and I'm getting paid 1,000 extra Kwacha per month.  As a third year extension volunteer I now live in a city, and that allows Peace Corps to make my stipend a bit larger as I have "urbanized" expenses, but the Kwacha keeps dropping so I really don't get to enjoy the extra money in its entirety.

It used to be that a stack of cash like this was a good bit of money.  My, oh my, how times have changed with the dropping Kwacha.

Now, the Kwacha is trading at about 7.3 to 1, and there doesn't seem to be any real relief or good news on the horizon, so even though I make more - I don't make so much more.  Does that make sense?  I hope so.

With student loans coming due and their holding companies wanting to know where their money is I think it's a good thing that Peace Corps will be ending sooner rather than later, as I don't think I can run away from my loans any further than I already have to Zambia.  And if I stay here much longer the Kwacha may continue its free fall, which - it turns out - is not fun for all.

*I am paid more now because of my new position that has me placed in Lusaka (the capital).  Things are expensive here, so to survive I'm paid slightly more.  Additionally, Peace Corps has adjusted our pay a time or two since 2012, mainly due to shifts in the price of living and the fall of the Kwacha on international currency exchange markets.  It's all very complicated, or so I'm told, and I only understand parts of it - but that's effectively the reason for an increase in pay over my three years.