For a jurisdiction as Zambia that has borne the brunt of fiscal fragilities costing it a favorable credit rating and waned sentiment, the United Nations General Assembly attendance in the United States is proving more beneficial for the copper producer than the Talibans. Asides Evergrande quagmire that roiled markets, a Lehman Brothers deja vu scare – that has now subsided, everyone this week has their eyes fixed on the 76th session of the UN General Assembly for global direction especially vis the SDG’s. The trip to Washington has for the Southern African nations lean delegation shown the importance of the foreign affairs ministry not only for economic diplomacy but what sideline activities could propel the red metal producer towards.
Barely 36 days post Hichilema’s ascension to power as Zambia’s 7th Republican President, the copper producers foreign policy got a significant boost after US President Joe Biden acknowledged the universal suffrage rights of youths in exercising democratic rights, that led to a change in government post the August 12 polls.
US President Joe Biden speaks at the 76th UN General Assembly in Washington DC.
“The young people of the land of Zambia harnessed their vote for the first time, turning out in record numbers to denounce corruption to chant a new path for their country, US President Joe Biden said at the opening of the United Nations General Assembly in Washington on September, 22. Zambia had its polls on August 12 that saw Hichilema victorious in a landslide outcome.
The Southern African nation of Zambia has since been on a fiscal mend following a widened debt burden with creditor classes from the east and west in a deadlock debt restructure negotiation that is tied to a successful International Monetary Fund – IMF deal. Market variables such as the currency, dollar bond prices and local government security yields have either appreciated in nodding Hichilema as head of state at such a time as this.
THE IMF AND WORLD BANK ARE JUST A BLOCK AWAY IN THE SIDELINES
Sources close to the matter have further revealed that the Zambian Head of State and his MinFin Head Dr. Situmbeko Musokotwane could be meeting the International Monetary Fund – IMF Managing Director Kristalina Georgieva and the Head of the World Bank David Malpas within the week. These landmark sideline sessions could be exactly the fuel that the currency and dollar bond markets need for another wave of revaluation as it sends a very strong signal around political will around restoration of fiscal fitness. Additionally, it will be the first time in history that a Zambian head of state would be courting multilateral chiefs on economic posture and possible collaboration opportunities given the copper producers current debt quagmire.
Zambia is in the labyrinth of a debt restructure whose precursor is successful attainment of a bail out in extended credit facility – ECF for balance of payment support. Ahead of the recently ended August polls, the IMF in a note on its website had confirmed agreeing a macroeconomic framework with the Zambian authorities and that the political will of the previous government would be the key determinant of the way forward.
Markets will been keen to picking hints towards timelines in conclusion of a deal which is critical for Zambia vis debt restructure.
Zambia’s 7th Republican President Hakainde Sammy Hichilema speaks at the 76th session of the UN General Assembly in Washington.
HICHILEMA’s SPEECH HAILS GREEN FINANCE AND INVITES PRIVATE SECTOR INVESTMENT
One can not divorce Sustainable Development Goals – SDGs from the UN General Assembly. With barely 9 years to go to the SDG2030 the world has seen a surge in green bond issuance to $227 billion 1H21 compared to $290 billion FY20. President Hichilema in his speech at the UN Assembly was alive to climate change effects which Zambia is not exempt and as such will support green finance initiatives.
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“Our new administration has established a ministry that is the first of its kind in Zambia, that of green economy and environment.”
“Zambia will dedicate its efforts to guarantee a stable and predictable environment that will attract and protect local, regional and foreign direct investment as well as enhance local participation in our economy.”
Zambia’s Republican President Hakainde Hichilema
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Zambia’s delegation to the 76th session of the UN General Assembly is being represented by President Hakainde Hichilema, MinFin Head Dr. Situmbeko Musokotwane and Foreign Affairs Minister Stanley Kakubo.
As at 12.33pm yields on Zambia’s dollar bonds were 35.637%/33.803% (2022), 20.179%/19.393% (2024) and 14.381%/14.012% (2027) while its currency for a unit of dollar traded for 16.308/16.634 in bid/ask respectively.
The Kwacha Arbitrageur