It has often been said that African financial market depth is constrained by a limited array of assets. Zambia, the continents red metal hotspot just had its capital markets master plan approved by cabinet. This will provide for clear listing rules for green bonds on the local bourse the Lusaka Securities Exchange.
This follows years of strategizing by the regulator the Securities Exchange Commission, Ministry of Finance and Financial Sector Deepening Africa working in conjunction with various market stakeholders. This comes at a time that the worlds decarbonization drive has strengthened given the need to urgently intervene in a climate crisis. This has seen global players commit to net zero emissions between 2030 and 2050.
The Zambian estimate of revenues and expenditure for 2023 provides for a 9.3% increase in allocation towards environmental protection to slightly over a yard. This will be to fund initiatives that will aim to slow the fast deforestation rate the Southern African nation has been cited for.
Zambia signed a green growth compact worth £1 billion with the UK Government to enable the participation of project developers in the carbon market through the United Nations Framework Convention on Climate Change, Government. This will facilitate foreign direct investment from the United Kingdom in renewable energy, urban planning and trade connectivity, among others.
Finance Minister Dr. Situmbeko Musokotwane announced a zero withholding tax on interest from investment in green bonds on the local bourse. This intervention is aimed at stimulating green investments as lower capital raising avenues.
Zambia signed economic protocols with the Democratic Republic of Congo that will see the two nations lead battery manufacture for electric cars. The Africa Development Bank has committed $250 million financing into Zambias first ever battery plant currently at feasibility study level.
The Kwacha Arbitrageur
