As the global inflationary quagmires exacerbate, Africa’s second largest hotspot Zambia has not been spared from price pressure effects. One such key driver of rising input prices is the local currency, the Kwacha, which has been on closing streak as debt restructure protracts. In the February petroleum price review, the Southern African nations energy regulator could hike fuel prices by 3.4%. READ: Kwacha Slide and Energy Woes Could Exacerbate Price Pressures and Interest Rate Risk The copper currency slid 4.21% with international crude prices trading 0.09% bullish in the February period translating to potential K0.92 price effect per litre the…
Author: The Editor
(This article has been reposted and corrected. Earlier it was cited that the Securities and Exchange Commission censured Madison Financial Services. This has been corrected to Lusaka Securities Exchange.) The Lusaka Securities Exchange (LuSE) in Africa’s red metal hotspot Zambia, on February 17, privately censured Madison Financial Services Plc for disclosure inadequacies concerning credit risk exposures and failure to provide financial statements. The decision taken by the securities regulator follows an investigation into a matter concerning the group triggered by breaches after the asset management arm of the business defaulted on repayment obligations to retail investor classes. The liquidity crunch…
As Africa’s second largest red metal producer Zambia grapples with a protracted debt restructure quagmire, investors propensity to redeploy liquidity in Kwacha assets is fading. Zambia’s central bank in its sophomore bond offering of the year held on Friday February 17, sold 25% of assets on offer, the weakest performance in 26 months. Of the K2.7 billion on offer, the Bank of Zambia recorded slightly over K645 million in proceeds, a deep undersubscription reiterating ambiguity and uncertainty in the Southern African market. Yields across the curve were unchanged save the 2 year which rose 50 bps to 18.0%. Risk skew…
The central bank in Africa’s red metal hotspot hiked rates 25 basis points to 9.25%, the first rate adjustment in 1 year as price pressures exacerbate. This decision comes barely a fortnight after the Bank of Zambia widened its statutory reserve ratio by 250 bps to 11.5%, the first monetary tightening since December 2019. Zambia was one of the emerging market economies that seemed to have tamed inflation for a over a year compared to its peers supported by a rallying currency as sentiment gushed into the Southern African nation post August 2011. Governor Denny Kalyalaya announced the benchmark rate…
Zambia’s January business activity levitated to expansionary territory after four months in the doldrums. According to a Markit Economics report, the Southern Africans January Purchasing Managers Index headlined 50.6 from 48.3 in the previous month when the private sector grappled with lack of money and persistent energy induced price pressures. Output rose in the agribusiness and services sectors while manufacturing, construction and wholesale decreased. Fifty (50) is the benchmark of expansion (>50.0) and contraction (<50.0). In the labyrinth of a debt restructure, Zambia’s private sector continues to be marred by currency depreciation and price pressures as petroleum prices soar. Energy…
Commercial banking bad loan stock for the year 2022 ebbed to a historical low of 5% according to Bank of Zambia sector financial statements. Non-performing loan stock in nominal terms infinitesimally fell by 0.76% to K2.6 billion year on years. The improvement in bad loan inventory was as a result of a central government bailout by the central bank of fiscal induced credit risk in accumulating arrears in the period 4Q20 to 3Q21. This intervention was step taken to absorb credit risk pressures in unpaid arrears to suppliers which deprived the market of liquidity. The de-risking saw the dismantling of…
Africa’s second largest red metal hotspot Zambia continues to dominate the Cape Town Mining Indaba with not only representation from local authorities but key financial players. One such entity is the Southern African nations systemically important bank, the largest by both asset and profitability size, Zambia National Commercial Bank Plc. The Lusaka Security Exchange listed commercial bank has continued to be a key partner in Zambia’s economic growth and has pledged support to the mining sector. READ ALSO: Zambia’s Largest Bank is at Africa’s Mining Indaba, Pledges Support to Unlocking Africa’s Mining Investment Speaking during a panel discussion on supply…
The time this week is ‘mining o’clock’, all roads lead to the annual prestigious event held in Cape Town, the Mining Indaba to run from the February 6-9th. This summit is one of the most critical platforms to set the tome for mining not only as a sector that drives growth for attending nations, but more importantly for the electric vehicle and renewable energy boom. With strong global decarbonization in response to heightening climate change threats, metals are expected to rally in price as demand swells to support the energy and automobile industry. Zambia’s largest bank by asset size and…
Africa’s second largest copper producer Zambia has seen rapid financial transformation in its payment system with mobile money exceeding 1 billion in the year 2022. This is according to retail payment statistics released by the central bank. The report reveals that retail payments rose 49.4% to K591 billion in the year 2022 with 50% of the volumes supported by mobile money transactions accounting for K295.8 billion while Electronic Funds Transfer (ETF) ranked second at K115.2 billion (20%), Point of Sale (POS) in third place at K111.5 billion (19%), Automated Teller Machines (ATM) housed K59.4 billion (10%) while cheque payments were the least utilized at…
Africa’s red metal hotspot Zambia could soon be joining the global score board of rate hikes as inflationary pressures persist. The central bank on February 01 issued a circular prescribing a 250 basis point statutory reserve ratio for both foreign and local currency to 11.5%. This is the first hike since December 2019 when the ratio was widened 400 bps to reign in on currency slide induced price pressures. The copper currency has been on a steep 83 day losing streak starting September 2022 to date whose effects are breeding price pressures in various sectors of the economy. This is…