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Alba Iulia
Tuesday, August 4, 2020

Investors overlooking Zambia’s Political Situation, Kwacha is Africa’s second-best performing currency

Headlines Investors overlooking Zambia's Political Situation, Kwacha is Africa’s second-best performing currency

Bloomberg website is reporting that that Investors are overlooking Zambia’s political risk and buying the nation’s assets as the price of copper, its biggest export, rises.

The yield on Zambia’s $1 billion Eurobonds due April 2024 have fallen 135 basis points this year to 7.55 percent on Wednesday. The southern African nation’s currency has appreciated 12 percent against the dollar in 2017, making the kwacha the continent’s best performer after Mozambique’s metical. Copper prices are at their highest in more than two years. The metal used in plumbing and electrical wiring accounts for about 70 percent of Zambia’s export earnings.

At the same time, the country’s main opposition leader, Hakainde Hichilema has been detained for over 100 days on treason charges. President Edgar Lungu this month imposed emergency measures and gave the authorities extra powers to detain suspects for more than 48 hours, after what he said was an arson attack at the country’s biggest market, and parliament approved extending this for three months.

“The drop in the yield of Zambian government bonds is 100 percent attributable to the copper price, as the political situation worsened over the course of the last months,” said Lutz Roehmeyer, a director at Landesbank Berlin Investment GmbH in Berlin, who helps oversee $2.6 billion including Zambian Eurobonds. “Politics have short legs and fundamentals are all that count.”

Political tensions in the country could jeopardize its negotiations with the International Monetary Fund over an economic program, Fitch Ratings Ltd. said July 17. Zambia is still on course to reach a staff-level agreement with the Washington-based lender this month to take to its board for final approval in August, Finance Minister Felix Mutati said this week.

Expectations that Zambia will access a loan from the fund has “allowed investors to put any concerns surrounding domestic political tensions to one side,” David Willacy, a foreign-exchange trader at INTL FCSTone Ltd. in London who monitors the kwacha, said.

“It wouldn’t be all that surprising that in the event the country scuppered its chances of a IMF deal because of political decisions, the kwacha gave up all of its 2017’s strength,” he said by email. “Investor confidence in the country and its economy is built on a fragile economic recovery, and as quickly as dollars have come into the country this year, they could as quickly be removed.”

Source Bloomberg
https://www.bloomberg.com/news/articles/2017-07-26/copper-trumps-politics-as-investors-take-shine-to-zambian-assets

81 COMMENTS

    • Basically another milestone and indicator of how President Lungu has proved a masterpiece of an elected leader.

      What is the point of election. My preference is a one state economy.

      Thanks

      BB2014,2016

    • Zambia is bigger than Hikainde Hacipuba! Zambia will always be peaceful and prosperous, I bind the evil powers of UPND and their evil minions

    • Only Kids can not remember that Kwacha under KK was much stronger than it is today. The only reason for that is forex controls which Lungu has directed the banks to observe or be punished. At the moment demand for forex has been artificially and politically suppressed, but how long before the consequences start to show, only time will tell.

      In a well performing economy, there no excessive money withdrawal controls like under Lungu. Lungu is just copying what Zimbabwe has done. Very soon Kwacha will be phased out and replaced with promissory notes like in Zim.

    • If you hate Lungu like I do and want him out by any means please give me a positive so we begin to send a clear message to this bunch of thugs that he is not wanted.

    • If all is well why constantly running to IMF then? There issome hidden agenda that PF minions can not see.

    • The Sa.tanic UPNdunderheads have once again been hammered by news that the nation under the God fearing PF has proven them wrong!!!!

      Didn’t we tell you in UPND that the currency would do better???!!!!

      Well done ba kateka however let’s not be complacent more work is needed! Let’s continue to give these sa.tanists High Blood Pressure and Depression with such great performance!!!! God guide and protect OUR Leader ONE ECL!!!!

      #2021 Vote PF

    • A Strong Kwacha with High interest rates is worthless to the economy. MMD-controlled PF regime needs to restore the low interest rates as Mwanawasa left them.

      Treasury bill, Govt Bond, Euro-bond buyers & are NOT real investors. We went through treasury bills & Govt Bonds with FTJ & we know it ends badly for the zambian common man.

      We need real investors opening up manufacturing plants, NOT these punters.

    • Which Kwacha is performing well ????

      This Roehmeyer says “Politics have short legs and fundamentals are all that count.”

      He obviously has short memories to match his short legs! The Kwacha is DOWN from K3.50 to the Dollar to now being K8.90 to the Dollar. Is that really “performing well” ?????

      Interest rates internationally are less than 5%. In Zambia they are 30% !!!!!! Mutati is begging for Budget support from the IMF.

      These are not signs of a healthy economy

    • @2020Vision
      Now everybody knows why Katondo Boys will be certifying someone dead on August 15
      @Kudos things are happening in Zambia
      In shona they say zirikuitika….Zirikufamba

      2021 Bloomberg news says vote PF ( Edgar)
      I thank you

    • Dununa Dununa iwe ayeeeee Dununa iwe Dununa reverse..ala bambi balimuchibe…ala bambi bola naikosa x2 via singing

      What more can i say

      August 15, 3:38 PM Rigor mortis time

      2021 vote PF ( Edgar)

      I thank you

    • Wanzelu, We from the ZISS are hunting for you. We will soon get you and you will die like Paul Tembo and the like. Watch your back.

  1. This is not the news UPNDonkeys would enjoy reading. All efforts to scandalise the country are falling on deaf ears … Kikikikikikikikikikik! You will die of bitterness!

  2. Since HH was arrested for causing trouble in our country the investors have shown more confidence in the Zambia’s economy.
    Copper prices have continued to soar and miners will be smiling all the way

  3. Any currency appreciation that does not register any corresponding appreciation in people’s lives is useless. The economy is so bad so much so that just a mild rise in forex earnings from copper sales sends the currency in a buoyant spin and Mutation thinks this is good! These are symptoms of a failed economy, period.

    • What do you attribute the fall of prices of essentials. Maize meal, chicken and other items are now cheaper. Please kindly explain to us laymen.

    • @4.1: Simple answer is – “Demand and Supply” determine the price of services and commodities. Few people have disposable income to afford three meals a day. The number of people involved in cross border trade has also significantly dropped hence less demand on the Us$.

    • At last someone that understands. Due to the huge amounts of taxes that are being paid and treasury bonds that mature the kwacha will remain stable or get stronger. Once that money has been spent and they dont have any other means of manipulating the exchange rate we will see the kwacha go back to what is was or get even weaker !

  4. Nkhani yabwino iyo. Zambian kwacha is performing well. Felix and the rest are doing fine. He seems to know what he is doing.

  5. Just before you around singing Dununa reverse nonsense, please note that this is not a Zambian economy story. This is a copper story that investors are chasing and Zambia and the Kwacha are being used as a proxy. I wouldn’t read much into this so called good news.

    Wouldn’t be surprised if this movie unfolding before us is similar to the one during our era under LPM. For me the real celebratory story will be if the diversification output starts trumping copper, which has really made Zambian leadership lazy from the time we got independence.

    So this shouldn’t be celebrated but looked at as the opportunity to diversify the economy away from copper. A copper story is temporal and we have seen this movie before. Spare us emotional roller coaster, we have had enough

    • The reason Kwacha is appreciating is because the importers are struggling to sell their goods. So it’s an issue of imports not being bought–therefore less demand for the $. Only way to improve economy is to export. Tell me besides copper, what do we export? Nothing to brag about. Food is cheaper because we just harvested and with the way ministers ran to Kenya, wait and see the scandals coming and soon there won’t be enough.

  6. As someone is trying hard to scare away the investors with childish pranks, the world is ready to help us.

  7. Translate this ECL to growth, development and prove them wrong. We don’t much time. 2021 is around the corner.

  8. Second-best performing currency!!But are the benefits trickling down to the poor villagers out there?It’s only the Minister of Finance and Bank of Zambia governor who are able to feel the benefits

    • The Kwacha is a Blocked Currency and Pegged by the Govt so it is not Floated like the Euro, US$, Pound and most Developed countries so they can change it to what the BOZ wants, if it was floated it would be thousands to 1 USD

  9. Well done PF govt and well done our beloved President ECL. Credit also goes to all peace loving Zambians. We only have one country to work hard for and may the good lord continue to bless mother Zambia.

  10. Lol, another masterpiece from a propaganda newspaper. People are suffering, the little left “investor” are looting whatever they can in Zambia and you f00ls are coming here with your lies? Yeah keep lying to the ignorant cadres. The hijacked PF regime is going down faster than a rabbit gets phucked.

    • What propaganda newspaper? This information is not from a Zambian newspaper purveying propaganda! It’s from a foreign nonpartisan publication called Bloomberg’s. You UPND guys seem so frustrated and enraged every time there is any good piece of information about Zambia. Do you hate this country this much? This is one very good reason I will not vote for UPND in 2021. I can’t vote for a party that detests a country I love so much!

  11. Good! Let the fuel prices and everything else follow, if that appreciation is real that is. Enough of cheap propaganda!

  12. I spent some time looking for this article on Bloomberg. I couldn’t find it. Anybody find it yet? Or was it written by one of our own and say Bloomberg did.

  13. kikik tell me now, has your shopping basket price reduced since this so called remarkable improvement in the kwacha? has your bus fare reduced? has the cost of basic needs reduced? please wake up bane. are you going to eat bloomberg report kikiki

  14. There many fundamentals one could talk about. What educated illiteracy is this? Taking 2011 as a base line we find K3.50 to a dollar and breakfast 50kg at K35. Now z Kwacha goes up to K15 to the $ then comes down K8 to the $. Question: has z Kwacha apprecicited? Against which baseline? Mealie meal goes from K35 to K120 and comes to K50/60. Has price of mealie meal reduced? Against which base line? Are zambians such dimwits?

    • You’re overthinking; the purpose of the article is to highlight that investors are bullish on the Zambian economy due to the increase in copper prices. The opposite will happen when copper prices start to drop.

    • @concerned citizen, understand that these “investors” are NOT people that have started businesses in Zambia, they are the FINANCE ORGANISATIONS that have lent money in the form of EUROBONDS to the Zambian GOVERNMENT.
      And they do not care if the economy improves or not, or wether people have jobs and food on the table. They only care that the INTEREST PAYMENTS on the KALOBA they have given ECL and his PF is making money FOR THEM. They will get back more than DOUBLE the money they put out when it is all paid back.

      That is what Bloomberg is talking about.

    • @Duno; simplistic way of thinking. Don’t confuse investors vs. government officials. Investors have a fiduciary responsibility to their shareholders, while government officials should “care whether people have jobs and food on the able”. In this article, investors have calculated that the financial rewards far outweigh the political risk; thus the following from the article, “Politics have short legs and fundamentals are all that count.” The fundamentals are the copper prices. Just wait until the price of copper goes down; things will go south quickly.

  15. It really sad to note that upnd is working so hard to scandalize our great nation and purport to have Zambia’s interest.
    Well time will tell, their alpha and omega had all planned, that he was going to be law less and ensure he brings mayhem but Our God does not sleep he is perfecting everything for us. No amount of propaganda will work. Watch the space.

  16. “Investor confidence in the country and its economy is built on a fragile economic recovery, and as quickly as dollars have come into the country this year, they could as quickly be removed.”

  17. The co-author of the article Taonga Clifford Mitimingi(?Bloomberg Country Correspondent-Zambia) is well known ZANU PF supporter in Zimbabwe.Just read all his articles on Zambia-pro PF

  18. @Nubian Princess, #1.3, I join you in binding the evil spirits of confusion, rumor mongering, unbelief, hatred, destruction, witchcraft, occultism, destabilization and selfishness.

  19. There is no political problem in the country! Zambia remains one of the few countries in Africa with no political refugee! Only one, but he is where he belongs because of illiteracy in the political arena. See the illiteracy in his supporters that is why he is Under Five.

  20. The blogger @Independent, (19) is a well-known tribal commentator on LT and Dog Watchers in Zambia. He belongs to a party that has been losing in 5 consecutive elections and cannot concede defeat. His peers are, JJ, NEZ, Nose demon, etc., all from UPND!

    • Kikiki mukose. Your own kids are walking around with dry lips natumutu toyuma and yet here you are ati Bloomberg.

  21. When the Kwacha was doing badly the other side of the nation was celebrating. When we had less rains, they again celebrated. When price of copper tumbled, they celebrated. They did not help us to pray

  22. What propaganda newspaper? This information is not from a Zambian newspaper purveying propaganda! It’s from a foreign nonpartisan publication called Bloomberg’s. You UPND guys seem so frustrated and enraged every time there is any good piece of information about Zambia. Do you hate this country this much? This is one very good reason I will not vote for UPND in 2021. I can’t vote for a party that detests a country I love so much!

  23. Well then fellow countrymen. Money talks louder than cheap Opposition politics. Zambia has economic potential, we should never trade it in for Agendas of Parties like UPND. Their attempt to destabilise Zambia so their Leader can rule Zambia outside of the ballot box decision has failed.

    Thanks to the tough stance of our gov’t under President Lungu, we have stayed afloat. We need to HANDLE IMF. They cannot bring their Agenda and bully us into accepting shabby politicians who think their personal ambitions are bigger than the will of Zambian citizens. We will not be told who our President is, should be outside the ballot box.

    • The only problem is we should be raking in the income had we not brought in Investor mine companies. We will only lick off the melted cream dribbling from the sides; as they keep the whole ice cream!

  24. Read between the lines; the bottom line from this article is Zambia needs to diversify its economy. This over reliance on copper is not sustainable for future prosperity and will create a lot of economic & political instability.

    • Haven’t you noticed that now copper accounts for 70% of the revenue? The country is obviously diversifying.

    • OneNation: Rule of thumb – provide the numbers for the last 10 years to compare the 70% number? What if the number’s been 70% the last 10 years?

  25. Some of you guys are really funny. Foreigners do not care about what we are doing against each other. They are in fact happy that there is only one Kapitao keeping all the natives under control so that they can rape Zambia to their best ability! They are raking the resources of this country while your fellow citizens are running scared of being arrested for doing nothing because up to date, no suspects have been arrested, thus there is no justification of jailing fellow citizens on falsehoods. This whole market fire is a local version of “9/11” where the state actually commits acrime and blame it on others so that it can go out there and destroy them.

  26. Zambians MUSt be in the driving seat of any diversification of our economy. We need to make citizens the masters of all economic activities. failure to doing this will continue to see Zambia become a source of immense wealth for foreigners who export our GDP to where they come from leaving Zambia with its current worn-out infrastructure in our districts. We MUST domesticate all critical GDP producuing activities. We must not allow foreigners take the driving seats. Trouble ofcourse is that our educational levels are very low, leading to incompetent manpower unable to be smart in the area of technological problem solving.

  27. Lusaka times you are the most ru-bbish paper ever and are so desperate for good news just like you sponsors PF- Foo-Ls. Zambia is fai-led state.How can being second performer become news splash? The Kwacha is Trading at K8,884.46. This is thousands not tens. How can a currency trading in thousands become best performer ? Have u gone bananas?

  28. This is the good news upnd followers hate.upnd celebrate a lot whenever something bad happens to mother Zambia.e.g;before 11/08/2016 HH predicted kwacha to reach K20 per 1 US$ ,fuel to be above K15 per litre,50kg of breakfast mealie meal to be above K150,copper prices to drop further,name it,if PF won 2016 elections.SADLY FOR HH,ONLY GOOD THINGS ARE HAPPENING TO ZAMBIA UNDER PF!!load shedding has almost ended,kwacha has gained,mealie meal prices dropped,inflation is below 8%,fuel prices dropped,etc.AT THE RATE THINGS ARE IMPROVING ,2021 MAYBE A WALKOVER FOR ECL’S PF!!plus the courts should help Zambia by locking up trouble makers such as HH because with them behind bars, OUR ECONOMY HAS STARTED BOOMING AGAIN!!

  29. @Alibaba:stop exposing your ignorance from wherever you stay looking after old white people!!
    Today the kwacha is at K8.85 per 1 US$!!!Thousands went in 2011 when late Michael Sata rebased our currency!!
    Come back home and add your vote to HH’s bantustan votes in 2021 because without your vote,HH will once more lose in 2021 especially that things are getting better by day under PF!!
    H.E.president Edgat Lungu,Hon.Felix Mutati (Minister of Finance) and Dr.Denny Kalyalya are doing wonders to our economy!!YOUR HH MAY END UP WITH NOTHING TO DECAIMPAGN PF ABOUT IN 2021,WATCH THE SPACE AND GET IT FROM US WHO LIVE IN ZAMBIA!!

  30. Wanzelu don’t compare the kwacha during kaunda to now..the wage bill then was far much lower the exports then were very superb as compared to now..the economy is growing alot of development is taking place and it’s been hectic for the kwacha to compete with the major currencies..let’s call a spade a spade and not dwell in the past and compare KKs time to now..it can’t work like that..remember we were coming from colonial rule and alot of mula was left in our reserves by the colonial masters..we are now taking care of ourselves and hustling hard as Africans..

  31. Meanwhile underfive gave up his claim as “economic manager” to settle down as a donkey with UPNDonkeys and corruption kingpins and swindlers like GBM and Mmembe.
    Imagine if underfive had miraculously won the 2016 elections, would such a resounding currency performance be possible with GBM as vice president?
    The mouth of UPNDonkey NEZ is today frothing with some dirty whitish stuff in envy.

  32. All good parents including Terrible know well to protect their children from naughty undisciplined uncultured lumpens like GBM and Mmembe, where are the parents of this underfive to guide the poor boy? Is it true tyat he has no father? No wonder!

  33. This rise in Kwacha value is 100% attributable to the rise in copper prices .Its has absolutely nothing to do with Lungu’s management of the economy.

  34. @ Njimbu
    You are the one exposing your ignorance. The currency was rebased to facilitate transactions because you were carrying a basket full of Kwacha to buy a loaf of bread .Therefore, this does not mean that the value of the Kwacha has all of sudden become K8.85. The value of the Kwacha remains in thousands . This is one of PF’s lies among many and you have religiously believed that the value is tens.The real exchange rate as toady is, K8,884.46. You must go back to night school maybe you will be able understand some of these economic issues better because this one is mainly above your head.

  35. @ Spaka like lilo
    Nangu usuminishe Nangu Utalike iyi ni time ya PF……..Kambwili will be your new sparing partner now….

    2021 ni Bloomberg news chabe

    Vote PF ( Edgar )

    I thank you

  36. “It wouldn’t be all that surprising that in the event the country scuppered its chances of a IMF deal because of political decisions, the kwacha gave up all of its 2017’s strength,” he said by email. “Investor confidence in the country and its economy is built on a fragile economic recovery, and as quickly as dollars have come into the country this year, they could as quickly be removed.”
    How is this a good thing? This is terrible. Mediocre at best.

  37. Can someone a bit more informed about the matter help shade more light on why zambia needs the IMF package? Would it reduce the price of meali meal further or in simple terms will it benefit an ordinary Zambian in areas where it really matters or it will simply avail more money for chewing for the few usual characters? Is it impossible for zambia to clean up without another loan or its a must we need to take on more debt? I genuinely need a bit of education on the matter.

  38. We have caged the spirit of HH and our economy is wonderful. We should keep him there until the bad spirit in him dies and he becomes born again.

  39. Even India wants to adopt the Zambian law that gives a day off to women having a period. It makes me happy that there’re positives in spite the numerous challenges the country is facing.

  40. After trotting all over scandalizing Zambia this is what you get? What a waste of time ,resources and energy. Now you know that the international community you were crying to has absolutely no respect for you. You have made Total fools of yourselves. They are seeing the very opposite of what you were telling them, Shame Shame, Shame .Your god HH must be burning with shame.

  41. #40 “Mulenga” Habalengwa! Thank you for supporting your country! I think Hazaluza Hagain! What do you think?

  42. @24, Jason, they can’t pray! They will never pray! Demons never pray! They only wish death on others! God help us!

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