SEC talk ‘green bonds’ and ‘technovation’, to unleash 10yr Master Plan for Zambian CM’s @AFMIndex launch

Despite downside risks in the African financial markets posed by disease pandemic, sustainability and resilience was observed in the period. The continent saw green bond issuances in Egypt and Kenya while usage of technology as an enabler could not be appreciated more. The East African market led the curve by using mobile money platforms as MPESA to purchase securities allowing retail investors place their liquidity is stocks and bills. Cost of capital continues to hurdle and constrain Zambian capital markets, this is because it is benchmarked to government securities whose yields remain elevated.

Speaking at the launch of the Africa Financial Markets Index 2020 in Lusaka, Securities and Exchange Commission – SEC Director of Market Supervision and Development Ms. Mutomboi Mundia said the regulator was in talks with the Ministry of Finance over a 10 year capital markets master plan.

“Given the perception issues Zambia faces the international capital markets may be a no go area. We will require solutions that will in the meantime leverage off the local market but this will depend on how well we package and ring fence them for investment safety to earn investor confidence,” Ms. Mundia said.

The SEC Market Development Head highlight the green bond framework that the commission had worked on last year aimed at attracting investment flows and would make it into the 2021 AFMIndex release.

Responding to the Director of Programs query on some of the innovations that were going on in the copper producers space, Ms. Mutomboi commented:

“We worked on a green bond framework last year to help attract funds such as those of a climate change nature. Zambia has the infrastructure and legal frameworks. The commission will be launching a sandbox regulatory framework to attract fin techs to help with intermediation by yearend.”

Ms.Mutomboi however acknowledged the challenges that come with bond subscription given Zambia’s current credit rating but stressed the need to package and structure these offering in an investment safe mode for attractiveness to potential investors.

Zambia’s highest score of 83 out of 100 was recorded in the legal enforceability of standard master agreement pillar of the AFMIndex.

The Kwacha Arbitrageur