By Angela Moonga
Africa News has analysed that Zambia’s risks remain despite the debt restructuring, economic growth and the stabilised economy, as several private commercial lenders are yet to give the country debt treatment, in the process keeping the country’s borrowing costs high.
Africa News analysed the economic tests looming for the next administration in Zambia.
“Zambia has managed to stabilize its economy after becoming the first sovereign to default on its debt obligations during the Covid-19 pandemic. It has since negotiated restructuring deals with the majority of its creditors and successfully concluded a $1.7 billion funding program with the International Monetary Fund (IMF),” Africa News stated. “The economy is projected to expand 5% in 2026, driven by investment in copper mining and a bumper maize harvest.”
But Africa News added that risked remained.
“Several private commercial lenders are yet to give the country debt treatment, keeping Zambia’s borrowing costs high. Fuel price rises linked to the Iran war have jolted the central bank’s efforts to rein in inflation and a potential drought next year could stifle power generation,” stated Africa News.
They hosted Zambia National Commercial Bank’s chief risk officer Mutisunge Zulu, who painted a positive outlook for the country as the depreciation of the Kwacha was now history as the local currency was now trading at 20 percent stronger to the United States Dollar.
He said the markets seem to have already priced in the political risks from the elections due on August 13.
He said what investors could be focussed on is the budget, whether it would be a budget of continuity or another regime would take over.
Zulu said the 3 million metric tonnes production of copper was ambitious but a step in the right direction, as anything closer to that target would be a success.
“You aim high,” said Zulu.
He said he anticipated a significant jump when the investments poured into the mining sector start to see a return on the investment.
