Good afternoon. Here’s what you need to know
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Debt servicing gulps K7.3 billion in May, as Zambia spends K14.4 billion on public finance
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Zambia sees KoBold spending $2.3 billion on giant copper mine
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Zambia needs 10m new jobs by 2050 to keep employment rates from declining
In Local Business and Finance News
Government, in May, spent K7.3 billion on debt servicing, taking up almost half of the money released to finance public service delivery. According to the May budget release issued on Sunday, government spent K7.3 billion to service its debt obligations, both domestic and external debt. This was from the K14.4 billion released by the Ministry of Finance and National Planning. “In line with the government’s commitment to reduce indebtedness, a sum of K7.3 billion was released of which, K4.1 billion went to the payment of external debt service while K3.2 billion was for domestic service,” the statement indicated. Additionally, government also spent a total of K3.9 billion on costs relating to the wage bill for various public service workers, including health, teaching and overseas allowances for diplomats in missions abroad. Read more: Zambia Monitor
Zambia and Angola have signed an agreement to develop a power project that will connect the two countries, aiming to reduce the electricity crisis. ZESCO Limited signed on behalf of Zambia, while Rede Nacional de Transporte de Electricidade (RNT) represented Angola. The agreement, sealed on Thursday in Lusaka, established the Zambia-Angola power transmission interconnector project and cross-border power supply to help address the power crisis. Zambia is expected to spend about $350 million on the project, which is anticipated to connect the two countries by 2027. The World Bank, African Development Bank, European Union, Swefund, and other partners have supported feasibility and environmental studies for the interconnector project within the Southern African Development Community (SADC) region. Read more: Zambia Monitor
KoBold Metals, the Bill Gates-backed mining exploration company, could spend $2.3 billion to build a major new copper mine in Zambia, President Hakainde Hichilema said, citing figures from the company. The firm aims to produce more than 300,000 metric tons per year at Mingomba — making it the country’s biggest such operation — and will begin sinking the mining shaft in the first half of 2026, according to company officials. Their meeting with Hichilema on Friday was broadcast over state television. Zambia is seeking to become one of the world’s largest producers of copper, which is crucial for green technologies like electric vehicles and wind turbines. The world faces predicted shortages of the metal in the coming decades amid the shift away from fossil fuels. Hichilema has previously said the Mingomba project could ultimately become one of the three-biggest copper mines globally. Officials from KoBold, based in the San Francisco Bay area, met with Hichilema and a group of heavyweight investors visiting Zambia this week to tour the firm’s activities in the country. They included senior representatives from Bill Gates’ Breakthrough Energy Ventures, Standard Industries, Equinor Ventures, Bond Capital and T. Rowe Price. Read more: Mining
The World Bank says based on Zambia’s population growth, the country needs to create over 10 million new jobs by 2050 to keep its employment rates from declining. Speaking during the launch of “Zambia Country Economic Memorandum”, World Bank Country Director for Zambia, Malawi, Tanzania and Zimbabwe Nathan Belete said the growth paradigm needed to change if the country was to maximise its full potential. “It is clear that Zambia is a land of opportunity. It is one of the most stable countries in Africa. It has substantial untapped natural wealth with great value-addition prospects. The country contains good arable land and a favourable climate. Its agricultural sector can become an engine of economic growth and poverty alleviation.” Read more: News Diggers
NRFA Board Chairperson Noel Nkoma says every month, the agency pays almost K400 million towards legacy debt and current road contracts. And Nkoma says he wants to run an NRFA which is devoid of any politics. Speaking when he featured on Radio Phoenix’s Let the People Talk programme, Friday, Nkoma said there was reckless borrowing in the last regime and as such, it would take a long time for the agency to clear K18 billion legacy debt. “One thing that you should also understand is the fact that there was reckless borrowing in the last regime, not just in one entity but everywhere so this is as a consequence of over contracting on roads.” Read more: News Diggers
In International News
President Vladimir Putin said Friday that the Russian economy is growing despite heavy international sanctions and the country has expanded economic ties with countries in Africa, the Middle East and Asia, as he sought to court investors. Addressing the leaders of Bolivia and Zimbabwe and business leaders at the St. Petersburg International Economic Forum, Putin said Russia “remains one of the key participants in world trade,” despite the fact that the country is under sweeping sanctions for sending troops in Ukraine. Read more: Africa News
Japan’s economy contracted less than initially reported in January-March on upward revisions to capital spending and inventory data, lending modest support to the central bank’s plans to raise interest rates again this year. Analysts expect the Japanese economy to have bottomed out in the first three months of the year, although a stubbornly weak yen and disruptions at major automaker plants continue to cloud the outlook for the current quarter. Japan’s GDP shrank a revised 1.8% annualised in the first quarter from the previous three months, Cabinet Office data showed on Monday, a smaller decline that economists’ median forecast for a 1.9% contraction and a 2.0% decline in the preliminary estimate. Read more: Reuters
With their forecasts stymied last year by faster economic growth and lower inflation than expected, and now by higher inflation and slowing growth, Fed officials of late have supplemented discussion of their outlook with the top alternate paths they think the economy may follow. Both a nod to what they don’t know and a way to keep public expectations more fluid, it’s a strategy Powell may well follow in his press conference after the end of a two-day policy meeting on Wednesday as a way to shift the center of attention from the new Summary of Economic Projections and its market-shaping plot of where officials think the policy interest rate is heading, with a focus on the median. Read more: Reuters
The gold mining industry is struggling to sustain production growth as deposits of the yellow metal become harder to find, according to the World Gold Council. “We’ve seen record first quarter mine production in 2024 up 4% year on year. But the bigger picture, I think about mine production is that, effectively, it plateaued around 2016, 2018 and we’ve seen no growth since then,” WGC Chief Market Strategist John Reade said. According to data from the international trade association, mine production inched up only 0.5% in 2023 compared to a year ago. In 2022, the growth was 1.35% year on year, the year before it was 2.7%, while in 2020, global gold production logged the first decline in a decade, sliding 1%. Read more: CNBC
Shares of Japanese automakers have largely plunged since the country’s Transport Ministry found false data used to certify certain models a week ago on Monday. The stock of Japan’s largest carmaker, Toyota, fell more than 5.4% last week, after the scandal broke on June 3, but is recovering on Monday. The automaker lost 2.45 trillion Japanese yen ($15.62 billion) in market value last week alone. Shares of Mazda, the country’s second-largest automaker, dropped 7.7% in the same period, and lost 80.33 billion yen in market capitalization last week. The wide-ranging inspection by the Ministry of Land, Infrastructure, Transport and Tourism also found irregularities in certification applications by other automakers Honda, Suzuki and Yamaha. Read more: CNBC
Finally, Capital Markets News
In 83 trades recorded on Friday, 213,090 shares were transacted resulting in a turnover of K1,141,231.44. The following price changes were recorded on Friday: K0.04 gain in CEC Zambia and K0.05 loss in ZANACO. Trading activity was also recorded in AECI, Airtel, Chilanga Cement, Real Estate Investments Zambia, Standard Chartered Bank Limited, Zambeef, Zambia Sugar and CEC Africa on the quoted tier. The LuSE All Share Index (LASI) closed at 13,101.48 points, 0.01% lower than its previous close of 13,103.09 points. The market closed on a capitalization of K101,314,425,073.84 including Shoprite Holdings and K66,531,739,633.84 excluding Shoprite Holdings.
7 Govt Bond trades with a total face value of K113,975,000 and turnover K70,290,3000 were processed on Friday.
