Good morning. Here’s what you need to know to start your day.
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Zambia seals $6.3 billion debt restructuring deal with its official creditors including China, India, Saudi Arabia & Paris Club
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Africa continues to fight against the use of the dollar as Tanzania bans pricing in dollars
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Zambian Breweries Expansion project worth $80m has reached advanced level and will be completed this year
Story of the Day
We are living in a time which is facing the dual challenges of climate change and increasing inequality. We understand that to achieve the global goals of low carbon and sustainable inclusive development, every part of society and especially businesses will need to play a role. As a financial services institution we believe we have a responsibility to partner with our clients, our regulatory bodies and industry experts to achieve greater sustainability and to develop solutions that unlock positive social and environmental outcomes. The Environmental, Social and Governance (ESG) topic is critical today. The inclusion of ESG in the evaluation of non-financial metrics is an important approach to understanding the risks and opportunities, beyond financial metrics, of a business’s future performance. The integration of ESG into the assessment of the viability and sustainability of businesses is relatively new in Zambia, but its application is increasing. It is an evolving landscape, but our aspiration is for businesses of all sizes to deliberately consider ESG factors through their operations and across their value chains with the intended outcome of long-term business resilience in a fast-changing world. Read more
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Zambia has clinched a deal to restructure more than $6 billion in debts owed to other governments, a French official said on Thursday, in a long-awaited breakthrough to ease pressure on the southern African country’s strained public finances. Zambia in 2020 became the first African country to default on its sovereign debt during the COVID-19 pandemic and has struggled since in protracted negotiations to agree a deal on the $12.8 billion of external debt it was trying to restructure. “We have reached an agreement on the outline of a debt treatment, we’ve reached the end of the negotiation,” the French official, who did not wish to be identified, told journalists. Zambia’s public sector creditors agreed to reschedule $6.3 billion, including $1.3 billion in arrears, and private sector creditors are expected to do the same on the $6.8 billion owed to them, the official said. “We’ve already spoken to representatives of the private sector and they know what to expect, that they will have to restructure and make a comparable effort,” the official added. The agreement calls for Zambia’s debt to be rescheduled over more than 20 years with a three-year grace period during which only payments on interest are due. The restructuring agreement with official creditors paves the way for Zambia to receive another $188 million tranche of money from the International Monetary Fund, part of a $1.3 billion package approved in August 2022. Read more: Reuters
Zambia on Thursday confirmed it had agreed a debt restructuring deal with its official creditors, adding it would now seek a quick agreement with its private creditors as well. The deal was announced earlier by a French official, who said Zambia’s public sector creditors had agreed to reschedule $6.3 billion of payments and that private sector creditors were expected to do the same on $6.8 billion owed to them. Zambia’s President Hakainde Hichilema wrote on Twitter that the deal would help attract investment and create jobs. Zambia’s finance ministry said in a statement that official creditors had agreed that local-currency debt would be excluded from the deal. It also said the terms of the agreement with official creditors could be adjusted if Zambia’s debt-carrying capacity improved, potentially leading to faster principal reimbursements and higher interest payments. “This agreement marks a crucial milestone in Zambia’s ongoing efforts to strengthen its economy,” the statement said. Hichilema was one of about 40 leaders attending a summit in France on Thursday and Friday aimed at easing the debt burden on some of the world’s most vulnerable countries while freeing up billions of dollars in new funds for climate finance. Read more: Reuters
Following the announcement of an agreement being reached by Zambia and its official creditors under the Group of 20 Common Framework, Ms. Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), issued the following statement today: “I warmly welcome Minister of Finance Situmbeko Musokotwane’s announcement that the Zambian authorities have reached an agreement with their official creditors on a debt treatment, consistent with the objectives of the IMF-supported program. This unique and innovative agreement specifies both a baseline and a contingent treatment that would be automatically triggered if the assessment of Zambia’s economic performance and policies improves. “I want to thank the official creditor committee, especially co-chairs China and France and Vice-Chair South Africa, for all their work to reach this agreement. This is a significant milestone for the G20 Common Framework under which China, India, Saudi Arabia and Paris Club creditors joined forces to agree deep debt relief for Zambia. “This agreement paves the way for the completion of the first review of Zambia’s three-year Extended Credit Facility Arrangement, which is helping put Zambia on a path toward sustainable economic growth and poverty reduction. Read more: IMF
President Hakainde Hichilema has expressed his desire to establish a similar innovation hub to Rwanda’s Norrsken House in Zambia. During a visit to Norrsken House in Kigali, President Hichilema was impressed with the achievements of local and international startups operating within the hub. He challenged Rwandan officials to extend the concept of Norrsken House to Zambia, emphasizing the importance of south-south cooperation. Norrsken House Kigali, established in 2019, provides a platform for Rwandan startups to exchange ideas, generate innovative solutions, and support their business growth. The hub has seen startups raise over $30 million in funding during the first quarter of 2023, despite a global reduction in startup funding. President Hichilema believes that technology is essential for all sectors and emphasized the need for Zambia to embrace it. Read more: Lusaka Times
In its effort to increase the participation of smallholder farmers in market-integrated and nutrition-sensitive value chains in Zambia, the European Union funded program has under the 4th round awarded six Zambian agri-businesses a total of EUR 2.4 million about (K45.6 million) in grants through the Enterprise Zambia Challenge Fund – EZCF. The companies have also pledged to invest EUR 2.9 million about (K55.1 million) into their projects in an effort to create market access for over 7,300 Zambian smallholder-farming households and create full time and part-time jobs, mainly for women and youths in rural areas. The Enterprise Zambia project is jointly implemented by Self Help Africa, an Irish NGO, and by Imani Development Limited from the United Kingdom and seeks to integrate 150,000 smallholder farmers and producers into the development of sustainable value chains and help them to be part of the transition towards greener and more sustainable agri-food systems. The project aims to create over 8,000 new jobs, focusing particularly on women and youth, during the coming five years. Read more: Zambian Business Times
Government says it has currently enrolled 5,920 youths in its youth training centres across all 10 provinces of Zambia to assist them with entrepreneurial skills. This is after it said it had empowered 854 graduates last year with start-up kits at total cost of K3.5 million from the youth resource centres that held their graduation ceremonies. The claims were made by Youth, Sport and Arts Minister, Elvis Nkandu, in Lusaka on Wednesday when he received a K1 million cheque from Zanaco meant to support youth empowerment programmes countrywide being undertaken by government. “Governments desire is that the trained youths walkout of the resource centres equipped with suitable equipment to enable them set up enterprises and become self-employed,” he said. Read more: Zambia Monitor
A trade gateway has been launched in Accra between the African Export-Import Bank (Afreximbank) and the African Continental Free Trade Area (AfCFTA). The Africa Trade Gateway (ATG) is a suit of five digital platforms that have been designed as a single window to enable the bank better deliver on its mandate of providing critical services to support and promote African trade. Furthermore, it covers the implementation of the AfCFTA. Afreximbank Executive Vice President, Intra-African Trade Bank, Kanayo Awani, said the digital evolution was part of its deliberate strategic response to address Africa’s key challenges to accelerate the pace of development and foster economic prosperity for Africans using and applying business models. “Each one of our digital interventions is designed to address clearly identified challenges and barriers for those seeking to engage in African trade and investment,” Awani said at the launch in Accra on Tuesday. Read more: Zambia Monitor
Bank of Zambia Exchange Rates
Currency | Buying | Selling |
---|---|---|
USD | 17.4702 | 17.4572 |
GBP | 22.1576 | 22.2300 |
EUR | 19.0905 | 19.1523 |
ZAR | 0.9395 | 0.9430 |
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The Bank of Tanzania (BoT) has instructed firms in the country to stop pricing products and services in dollars, stressing that doing so is against regulatory requirements and will relieve pressure on the local currency. The Tanzanian shilling continues to be the only legal money in the nation, according to central bank governor Emmanuel Tutuba. In August 2007 and again in December 2017, the Tanzanian government outlawed the usage of the US currency. “The government’s directives issued are still valid and should be adhered to at all times,” the central bank said in a notice dated June 20. “Tourists and non-residents who pay in foreign currencies must provide their identification documents such as passport and certificate of incorporation for companies for proper capturing and classification of statistics,” as seen in the notice. Recent months have seen an upsurge in the demand for foreign exchange, particularly in the real estate, healthcare, transportation, and educational sectors as companies seek to protect themselves against a depreciating local currency. Read more: Business Insider
French President Emmanuel Macron has opened the Summit for a New Global Financial Pact in Paris that seeks to find financial solutions to the interlinked global goals of tackling poverty, curbing planet-heating emissions and protecting nature. In his opening remarks, Macron on Thursday told delegates that the world needs a “public finance shock” – a global push of innovation and financing – to fight these challenges, adding the current system was not well suited to address the world’s challenges. “Policymakers and countries shouldn’t ever have to choose between reducing poverty and protecting the planet,” Macron said. Read more: Al Jazeera
President Joe Biden hailed a new era in the US-India relationship, after rolling out the White House red carpet for Indian Prime Minister Narendra Modi on Thursday, touting deals on defence and commerce aimed at countering China’s global influence. The partnership is “stronger, closer and more dynamic than at any time in history”, Biden told reporters at a joint press conference with Modi, and the economic relationship is “booming”, with trade more than doubling over the past decade. “A trade and investment partnership between India and America is important not only for our two countries but for the global economy as well,” Biden said. “We have decided to resolve long pending trade-related issues and make a new beginning,” he added. Modi touted “a new chapter” to the countries’ “strategic partnership” after the two leaders emerged from Oval Office talks where the countries’ differences on Russia and human rights were on the table. Read more: Al Jazeera
The Bank of England raised interest rates by half a percentage point Thursday, after data this week revealed surprisingly stubborn inflation. The move will pile pain on people with mortgages and put more downward pressure on house prices. The decision in favor of a 13th consecutive hike takes the main borrowing cost for commercial banks in the United Kingdom to 5%, the highest since April 2008. “The economy is doing better than expected but inflation is still too high and we’ve got to deal with it,” Bank of England Governor Andrew Bailey said in a statement. “We know this is hard — many people with mortgages or loans will be understandably worried about what this means for them. But if we don’t raise rates now, it could be worse later,” he added. “We are committed to returning inflation to the 2% target and will make the decisions necessary to achieve that.” Read more: CNN
More prime working age women are employed in the United States now than ever before. The labor force participation rate for women between 25 and 54 years old set a record high in April and then again in May, rebounding from the pandemic “she-cession” and returning to its pre-pandemic form of making progressively historic labor market gains. That could all change with AI. Generative artificial intelligence technologies like ChatGPT have the potential to transform the labor market, exposing the majority of the nation’s jobs to automation, Goldman Sachs economists have projected. The technology can create new content — such as text, images, audio, video, and code — from training data that includes examples of that desired output. However, recent research shows that although outnumbered by men in the US workforce, women could be disproportionately affected by businesses’ adoption of generative AI: One recent analysis estimates that 79% of working women (nearly 59 million) are in occupations susceptible to disruption and automation. That’s compared to 58% of working men, according to research from the University of North Carolina’s Kenan-Flagler Business School. Read more: CNN
Zambian Breweries Expansion project worth $80m has reached advanced level and will be completed this year. Zambian Breweries Country Managing Director, Michelle Kilpin says through the expansion project, the company will meet the growing demand of alcoholic beverages on the local markets and will also explore export opportunities. Speaking during the Launch of the diversity, Equity and inclusion program by Vice President Mutale Nalumango, Ms Kilpin explained that the company has also prioritized local sourcing and empowerment of small scale farmers through the growth schemes. And, Ms. Nalumango praised Zambian breweries for putting measures in place that do not only support the female folk to participate in the manufacturing sector but also aligned to government policies. She said Government understands the role that the private sector plays in ensuring that the country attains development and will continue to put policies in place that enable the private sector to thrive. Read more: ZNBC
In 34 trades recorded yesterday 99,437 shares were transacted resulting in a turnover of K221,276.06. Trading activity was recorded in CEC Zambia, Chilanga Cement, Standard Chartered Bank Limited, Zambeef and Zanaco. The LuSE All Share Index (LASI) maintained its close at 8,236.96. The market closed on a capitalization of K76,785,651,359.06 including Shoprite Holdings and K42,002,965,919.06 excluding Shoprite Holdings.
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