Originally, the Kwacha — meaning "sunrise," so-named to celebrate Zambia's independence — was tied to the US dollar, so conversion was simple. However, in the late-90's, the kwacha was floated and devalued rapidly. Since mid 2005 the Kwacha re-appreciated strongly, due to the international debt-relief and the boost of the copper prices. As of April 2011, the Kwacha is hovering around $1 = 4755ZMK, â¬1 = 6924ZMK.
U.S. dollars are still commonly used for larger purchases although it's illegal and will be accepted by anybody dealing with tourists. It is not unusual to see all printed prices at a hotel restaurant in local currency, and then receive a bill in U.S. dollars. If you bring US$, in Zambia only the "big heads" new notes are accepted in banks and bureaux de change, small heads are not accepted if you are lucky you can change them in Livingstone. U.S. $50 and U.S. $100 notes are the best to bring, for smaller nominations you will get a poorer rate at the bureaux 5-10% less.
Changing Euros is a difficult thing to do especially up country, bureaux are giving a very poor rate 25% less then the market rate!. International banks will accept, but with commission charge. Finance Bank, Arcades shopping Centre Lusaka, is known to accept Euro's at a good rate and without commission charge. Bureaux and Banks will only change a maximum of 1000 US$ or equivalent per person per day! Watch the rates as they can change overnight, fluctuations of 3-5% per day are common.
South African Rand are exchanged relatively easily in major centres. Other second tier currencies like the Australian dollar are not worth bothering with. Expect blank looks from the locals, and a mocking laugh from those in the tourist trade.
If you want to sound like a local, refer to 1000 kwacha as a pin, so for example 10,000K is "ten pin". In the '90's, the kwacha devalued so rapidly that the government didn't have time to produce new, larger bank notes. To pay for things, Zambians often had to bundle — or "pin" together — large numbers of small bills. Notes are now available in denominations of up to 50,000K, but hang on to small change if you can because there are occasional shortages.
ATMs may be found in major cities, but you should not depend on them to be functional. Most of the ATM's accept only VISA. Other international credit cards like MASTERCARD and AMEX are generally a problem. Maestro is definitely a problem in Zambia and very few ATM's accept Maestro. Some shops and restaurants might accept debit or credit cards, as do practically all high-end hotels and safari lodges, but surcharges of 5-10% are common. ATMs only dispense local currency.
Although using forms of payment other than cash is growing in popularity, you should not depend on credit to get around the country. Traveler's cheques are almost impossible to process in Zambia, most chance you will have in the Lusaka international banks Stanbic, Standard Chartered, but even then you will get a very poor rate, a high commission charge and it will take you a couple of hours, if you are lucky. If you prefer to take the risk and use Traveller's cheques, the only ones who will be accepted if you are lucky are the ones from American Express Thomas Cook's are currently not accepted!.
Most shopkeepers advertise fixed prices and are unwilling to negotiate, but this is not a given. On the other hand, most "freelance" salesmen — vendors selling curios; taxi drivers; etc. — who do not post their prices are usually willing to negotiate. As a very general rule of thumb, assume the first price they mention is at least double the amount they will accept. You should not be afraid to barter — after all, Zambians bargain among themselves — but try not to get carried away with saving a few pennies.
Tipping is not required — indeed, it was at one point illegal — but often expected. Porters expect US$0.50 or so per bag, and better restaurants typically add in a 10% service charge or expect an equivalent tip.
Finally, keep in mind the Zambian custom of mbasela em-buh-SAY-la — giving a freebie when more than one item is purchased. If you buy a few small items, do not be shy about asking for your mbasela.
Zambia is comparitively expensive compared to its neighbors. A bare-bones budget traveler will be looking at a minimum of US$40/day just for a bed and three meals, and transport is again, comparatively expensive, in part due to the great distances involved. Foreign currencies just don't go as far as in other developing countries, and often prices in Zambia are the same as what one would be paying in America. At the other end of the spectrum, all-inclusive safari lodges or Lusaka/Livingstone's five-star hotels will take care of all your needs but charge US$200/day and up for the privilege. Finding a middle ground between these two extremes can be difficult but there are safari operators who will offer 'DIY' camping for around US$5 to $95 and above - it pays to look around see below.
Zambian safaris are amongst the best available in Africa; they offer top quality viewing experiences with the continent's top guides. Zambia's national parks are not 'commercialised' as in other countries e.g. Kenya and South Africa and one will not see the ridiculous zebra striped game viewing buses, Land Cruisers etc.