A Zambian High Court on February 26, ruled against an energy statute pronounced in 2020 declaring the state power utility as carrier of carriers. Energy Minister, Matthew Nkhuwa had signed a Statutory Instrument No.57 making ZESCO Ltd a ‘carrier of carriers’ in a move that was seen as disadvantaging Lusaka Securities Exchange listed Copperbelt Energy Corporation (ZM:ISIN0000000136). In a judgment delivered by Judge Elita Phiri Mwikisa, relief was granted to CEC Plc prohibiting the energy ministry from implementing SI.57 and that all provisions the statutory instrument came with will be rendered illegal. Read also: Energy price risks the biggest downside…
Author: The Editor
The central bank in Africa’s second largest producer, Zambia has continued to observe increased interest in one year treasury bills despite narrowing premiums in the wake of spiraling inflation. The Southern African nation recorded a 59-month high of 22.2% last headlined at this level in March 2016. In a T-bill sale held on February 25, with K1.3billion on offer, the Bank of Zambia sold slightly under two yards in Kwacha terms absorbing demand in excess of K2.2billion. Read also: Negative real yields on Kwacha T-bills widen as ‘inflation sprint’ persists for February Yields were unchanged with the 3m-9m still underwater…
Real yields on Kwacha treasury bills just widened 70 basis points in the negatives following a further spiral in February inflation headline to 22.2% as cost push inflationary effects from a weakened currency persist. Zambia Statistics Agency (ZSA) on February 25, announced that inflation for the month accelerated 0.7% to 22.2% from previous months 21.5%. This has widened the food basket for a family of (5), as measured by the Jesuit Centre for Theological Reflection (JCTR), in Africa’s second largest copper producer, Zambia. Read also: At 57month high, inflation spiral drowns Kwacha T-bill yields further, rate hike signs in the…
As risk appetite claws back into the global markets given vaccine breakthroughs, return of China from the lunar holidays and above all, a Joe Biden supported stimulus package on the horizon, copper has had a fairly bullish streak. Coming from March 2020 COVID induced lows of $4,343/MT, the red metal has since recovered over 107.2% having to crossed the $9,025/MT mark on February 22. Many players are nonetheless still of the view this rally in price is highly speculation driven and will steam out. Read also: As copper flirts with new highs of $8,000/MT, Zambia looks to mining to expedite…
As appetite for sovereign paper dithers, Kwacha long dated fixed securities (bonds) continue to bear the brunt of Zambia’s deteriorated credit rating. A risk theme furthering from the COVID year 2020 has extended to this year with more interest in shorter tenured assets such as treasury bills given duration risks. The central bank sold K453.3million worth of government bonds in a deeply undersubscribed debt sale with an 80.0% skew towards the 2-year paper housed at 32.0%. This is the second subscription haircut recorded in 2021. On offer was one and half yards in Kwacha terms with bids in excess of…
Amidst a currency rout and spiraling inflation, Zambia faces a cost of living quagmire in a disease pandemic suppressed environment. In the last rate decision meeting held between February 15-17, the Monetary Policy Committee (MPC) raised rates 50 basis points to 8.5%, the first rate hike since November 2019. The central bank communique cited upside risks emanating from a Kwacha depreciation which has fueled cost push inflationary effects scaling prices higher. Market expectations in the buildup to the rate decision meeting, skewed towards remedies or cures to not only arrest the slide but build an effective sustainable reserve buffering mechanism.…
The telecommunications regulator in Africa’s red metal producer Zambia has announced the entrance of a fourth Mobile Network Operators (MNO) Beeline Telecommunications Limited. This development will push Zambia’s telecoms market structure a notch away from oligopoly but one step closer to perfect competition as the offering landscape widens. According to a press release dated February 19, the Zambia Telecommunications and Communications Authority (ZICTA) announced the awarding of an international network and national service license with associated resources including but not limited to frequent spectrum and numbers to Beeline Telecoms. Read also: The Economics of Telco reg fines that perpetuate complacent…
The central bank in Africa’s second largest copper hotspot, Zambia has hiked the benchmark interest rate by 50 basis points to 8.5%. This was contained in a briefing by Governor Christopher Mvunga. This will be Zambia’s first rate hike in 6months. Amidst a ‘currency depreciation’ induced cost push inflationary environment, the Monetary Policy Committee (MPC) decided to raise the interest rate whose quantum was nonetheless hampered by a suppressed business ecosystem fueled by disease pandemic effects. The rate decision was achieved by balancing price and financial sector stability in the face of a COVID19 pandemic situation. Read also: With an overvalued…
First National Bank and Zambia National Commercial Banks at the banking square on Arcades shopping mall on the junction of Thabo Mbeki and Great East roads.
Bank of Zambia Governor Christopher Mvunga speaks at the Economics Association of Zambia dinner gala on 11 December 2020.