Following a big week in the market, today we will summarize a few key metrics in the latest Zambia Statistics Association Report.
The Ministry of Finance K2.7 billion injection
The Minister of Finance, Dr Bwalya Ng’andu has announced a joint donation effort led by the World Bank, British and American government to support the Ministry of Health fight against COVID. The total amount raised is K2.7 billion and it shows good faith in a minister who has increased the transparency of the Ministry of Finance, much to the praise of the IMF.
During the COVID-19 global crisis, China has attempted to adopt the role of world leader, giving mass donations of test kits, medical advice, and aid to the world’s most heavily affected. In response, America announced a $2 trillion global fund to maintain their global reputation. There have been substantial issues with the Chinese donations with India returning thousands of ‘faulty’ test kits and Tanzania’s President Magalufi declaring a proposed $10 billion as having “terms only a drunkard would accept”.
Inflation Reaches 15%
The annual inflation rate has seen a 14% increase over the period of March 2020, with food inflation being particularly highlighted with a 15-17% increase. This comes after we were declared the second-worst performing currency of 2020 by Bloomberg during the Kwacha freewill to K18 per $1. This tends to be one of the key indicators as business owners with dollar loans have seen real income halved.
The monthly inflation rate has also received sharp growth at 2.2% (from 1.2% in February). This is likely the result of increasing market speculation as lockdowns were being enforced worldwide from mid-march. Lusaka recorded the highest annual inflation of 18%, Northwestern and Western Province recorded a slow 0.5% increase over the same time period.
Zambia Reports a Trade Surplus
Zambia reported a trade surplus of K181.5 million over the trading period of March 2020. This comes following a 10% increase in the value of exports due to the high levels of copper trade. During the same period dropped by 8.9% after the Chinese border lockdown was initiated in January (China still accounted for 21% of export and is our second-largest trade export market).
Switzerland remains our largest export market with 39.9% of trade. This is due to the Swiss company Glencore ($200 billion mining giant) who are the owners of Mopani Copper mine. The company declared its intention to suspend the mine in March, causing the government to threaten the revocation of their license in mid-April. The future of one of the countries oldest mines remains in the balance.
South Africa accounts for 29% of imports, this is attributed to “minerals and chemical fertilizers” in the report. China comes at second with 17% (due to the presence in the construction industry) and UAE is third with 13.5% (due to petroleum supply).