Good morning. Here’s what you need to know to start your day.
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Kwacha Depreciation Could Trigger Fuel Prices to Rise by 3% in March
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Eskom CEO Quits a Month Early After Censuring South Africa’s ANC
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World Bank Opens Nominations for Malpass Successor Thursday
Story of the Day
Bonds continue to be a key instrument of choice for many governments to raise money. They are extremely vital in assessing the health of a country’s economy. In 2022, the combined wealth created by the primary and secondary market was approximately K19 billion, according to the securities and exchange (SEC) report for the year. Currently, the yield rates in Zambia are beginning to ease in the primary market. However, last year on the primary bond market, the country experienced the lowest and highest bond face values and turnover in July and September respectively. According to Zamstats, the inflation rate between this period went from 9.7% as of July 2022 and 9.9% in September 2022. As of January 2023, annual inflation is currently sitting at 9.4% compared to 9.9% in December 2022 with this being the lowest inflation rate recorded since August 2019. Read more
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As the global inflationary quagmires exacerbate, Africa’s second largest hotspot Zambia has not been spared from price pressure effects. One such key driver of rising input prices is the local currency, the Kwacha, which has been on closing streak as debt restructure protracts. In the February petroleum price review, the Southern African nations energy regulator could hike fuel prices by 3.4%. Read more: The Business Telegraph
President Hakainde Hichilema says Government will ensure that investment pledges in the energy sector are implemented. The President says Zambia also targets to increase its energy generation capacity to export the surplus to other countries. He was speaking in Lusaka today when he met a delegation of eight UK energy investors at State House. The President has also praised the Copperbelt Energy Corporation for expanding its energy mix that now includes solar. And British High Commissioner to Zambia Nicholas Woolley says the investors intend to pump in over $2 billion to generate over 1,500 mega watts of power in Zambia over the next few years. Mr. Woolley adds that the UK Government’s Development Finance Institution, the British International Investment is also looking to expand its investments to support electricity production and transmission in Zambia. Read more: ZNBC
Zambia Revenue Authority (ZRA) is expected to recover over K22m after the Economic and Financial Crimes Court verdict that has found two Copperbelt Companies liable for tax evasion. And the courts has also fined Santorin Investments Limited Company over K1.2m while Junsheng Company has been fined Over K6.5m. Santorin Investment Director Victor Mwansa has been slapped with a nine month jail term having been found liable of tax evasion together with his company. The Economic and financial Crimes Court made the verdict during its circuit sittings in Kitwe today. Read more: ZNBC
A U.S. Congressional delegation along with the U.S. Ambassador to the United Nations Agencies in Rome Cindy McCain this week visited Zambia to witness how the U.S. government, in partnership with the Government of Zambia and UN agencies, is investing in Zambia’s greatest resource – its people. The delegation of leaders from the U.S. Senate Committees on Appropriations and Foreign Relations included Senators Lindsey Graham, Bob Menendez, Chris Coons, Martin Heinrich, Chris Van Hollen, and Mark Kelly. The delegation, accompanied by U.S. Ambassador to Zambia Michael Gonzales, met with Minister of Foreign Affairs Stanley Kakubo and Minister of Tourism Rodney Sikumba to discuss the Zambian Government’s commitment to improve accountable and responsive governance, inclusive economic growth, and the delivery of services. Read more: Lusaka Times
An agreement meant to enhance competitiveness and performance in the Special Economic Zones (SEZs) has been signed in Lusaka between the Zambia Development Agency (ZDA) and Charter Cities Institute (CCI). The Memorandum of Understanding (MoU) is meant to attract investments, create jobs and accelerate inclusive growth aimed at achieving sustained economic growth. This would be done through devolved governance and partnerships with the private sector, according to a statement issued in Lusaka on Tuesday. Read more: Zambia Monitor
In International Business News
Eskom Holdings SOC Ltd. said its chief executive officer will leave the beleaguered state-owned South African utility more than a month before planned, a day after he censured the government and the ruling African National Congress over corruption. Andre de Ruyter excoriated state officials’ conduct and commitment to fixing the nation’s energy crisis in an interview aired on Tuesday by e.tv, a Johannesburg-based broadcaster. “Eskom’s losing 1 billion rand ($55 million) a month to graft and theft committed by people often affiliated with the ANC” he said. Read more: Yahoo Finance
The World Bank on Thursday will open a five-week period for nominations to succeed President David Malpass, days after he announced his early departure from the anti-poverty lender, and expects to select a new chief by early May. The executive board met Wednesday to discuss the selection process and will accept nominations through March 29, the institution said in a statement. Executive directors, who will decide on a shortlist of up to three candidates and conduct formal interviews, said they strongly encourage the nomination of women. Read more: Yahoo Finance
The International Monetary Fund (IMF) has raised concerns about the inflation index of Nigeria, calling the weights and basket used by the National Bureau of Statistics (NBS) for the monthly consumer price index extremely outdated. In a report titled “Nigeria: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Nigeria,” the IMF emphasized the need for the NBS to use new weights from the 2018 National Household Livings Standards instead of the 2003/04 National Consumer Expenditure Survey. Read more: Business Insider
Federal Reserve officials at their most recent meeting indicated that there are signs inflation is coming down, but not enough to counter the need for more interest rate increases, meeting minutes released Wednesday showed. While the Jan. 31-Feb. 1 meeting concluded with a smaller rate hike than most of those implemented since early 2022, officials stressed that their concern over inflation is high. Inflation “remained well above” the Fed’s 2% target, the minutes stated. That came with labor markets that “remained very tight, contributing to continuing upward pressures on wages and prices.“ Read more: CNBC
The first European Union-Kenya Business Forum concluded this Wednesday in the capital, Nairobi. The forum brought together for two days more than 500 participants ranging from politicians, business executives, experts and diplomats. On Tuesday, Kenya’s president, William Ruto, participated in the signing of an EU funding package for TradeMark Africa to facilitate a five-year programme that will boost Kenya’s exports and support the government in creating a positive business environment. The funding package is worth $27 million dollars bringing together both the public and private sectors of Kenya alongside European financing institutions with the overall aim of achieving a sustainable growth of exports, including transport and logistics. Read more: Africa News
Europe’s banks, which enjoyed a stellar fourth-quarter that yielded a surge in earnings growth to 15-year highs, are still looking cheap and could have more room to rally. Economic data hasn’t been as bad as many had feared. The euro zone is expected to stagnate rather than contract, while cost of borrowing is still rising. STOXX 600 financials are expected to have had the highest earnings growth rate of any sector in the last quarter of 2022, and brokers and investors have taken note, responding with a flurry of upgrades to the sector as well as inflows. The STOXX banks index has climbed almost 20% so far in 2023 to five-year highs, and along with auto, travel and leisure stocks, is a contender for best-performing sector. Read more: Reuters
On Tuesday, February 21st, Tanzania approved building a $3.5 billion East Africa Crude Oil Pipeline (EACOP). The 1,443-kilometer (900-mile) pipeline would transport crude from large oilfields being built in Uganda’s Lake Albert to a Tanzanian port on the Indian Ocean. The pipeline required clearance from both nations, and Uganda granted the project operator, the East African Crude Oil Pipeline, a license last month (EACOP). At the event to receive the approval certificate, the Tanzanian General Manager for the East African Crude Oil Pipeline, Wendy Brown noted that the project approval marks yet another milestone for the East African Crude Oil Pipeline. Read more: Business Insider
Finally, Capital Markets News
In 30 trades recorded yesterday, 17,012 shares were transacted resulting in a turnover of K59,506.00. A share price gain of K0.01 was recorded in CEC Zambia. Trading activity was also recorded in Zambeef and Zanaco. The LuSE All Share Index (LASI) closed at 7,261.31 points, 0.05% up from it’s previous close at 7,257.57 points. The market closed on a capitalization of K72,538,851,056.34 including Shoprite Holdings and K37,756,165,616.34 excluding Shoprite Holdings.
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