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Zambia to secure $185.5 million from IMF
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Anglo-American keen to invest in Zambia’s mining sector
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Govt to recruit 4,200 teachers
In Local Business and Finance News
The International Monetary Fund’s board expects to meet by mid-December to conclude the fourth review of an Extended Credit Facility arrangement Zambia, after the IMF reached a staff-level agreement with the southern African nation. The conclusion of the fourth review will pave the way for the disbursement of $185.5 million under a 38-month IMF-supported program, the Washington-based lender said in a statement. The IMF revised downwards Zambia’s economic growth projections for 2025 to 6.2% from 6.6%, because of weak electricity output. “This outlook is bolstered by a recovery in agricultural and mining production and the completion of the debt restructuring and is underpinned by prudent policies and ongoing reforms,” IMF mission chief Mercedes Vera Martin said in the statement. The fund also said Zambia’s dedollarization plans “should be accompanied by market-driven incentives once macroeconomic stability is consolidated, hedging instruments to manage exchange rate risks are available to the private sector, and prudential regulation is in place to help internalize financial risks associated with dollarization,” the fund said. Read more: Bloomberg
Zambia’s worst drought in over a century is driving the kwacha toward record lows. The currency weakened for the past 13 sessions against the US dollar, its longest slide in six months. It weakened 0.1% to to 27.2843 per dollar by 4 p.m. local time on Monday, hovering around levels last seen in May, when it hit a record low of 27.4250. The drought has sharply increased Zambia’s reliance on food and power imports, draining foreign reserves and adding to the strain on a fragile economy. Agriculture, the lifeline for over 70% of Zambians, is reeling under the dry conditions, threatening food security and pushing annual inflation to a near three-year high of 15.7%, largely driven by rising prices for meat, maize, and cereals. “The drought increases Zambia’s power import needs and reduces export revenue from agriculture and copper,” said Gergely Urmossy, an emerging markets strategist at Societe Generale London Branch. Urmossy said that tight liquidity has made the FX market particularly volatile. Read more: Bloomberg
Chief Executive Officer, Duncan Wanblad,In a landmark meeting, President Hakainde Hichilema welcomed a delegation from Anglo American Corporation, led by the company’s CEO, Duncan Wanblad. This visit signifies Anglo American’s renewed interest in Zambia’s mining sector, marking a potential return after nearly two decades. With Zambia’s ambitious target of reaching 3 million tons of annual copper production, partnerships with major mining firms, including Anglo American, are considered essential to achieving this goal. President Hichilema expressed optimism about the company’s renewed commitment, emphasizing the critical role reputable international players like Anglo American could play in helping Zambia meet its mining production objectives. Read more: Lusaka Times
The Teaching Service Commission- TSC- will in the next two weeks start the recruitment of 4,200 teachers. In an interview with ZNBC News in Lusaka, TSC Chairperson Daphne Chimuka said the commission has since started the upgrading and promoting of teachers who are already in the system to create space for the recruitment. Ms. Chimuka further said details on the recruitment will be made available by the Ministry of Education. In 2023, 7,221 teachers were recruited to work in public schools across the country. Read more: ZNBC
The government has been urged to expedite the settlement of debts owed to suppliers of goods and services, which stood at K88.65 billion as of March 2024. This is in order to stimulate the economy. Andrew Chibuye, PwC Partner and author of a paper titled “The Latest on Zambia’s Debt Restructuring Journey,” emphasized that paying off these arrears would inject much-needed liquidity into the market. This, he expressed believe, was critical for economic stimulation. Chibuye stressed the devastating impact delayed payments have had on suppliers, many of whom borrowed to provide goods and services but have faced severe financial challenges due to the prolonged settlement period. He pointed out that addressing the debt owed to suppliers, which often receives little attention, is essential for economic recovery. “Quickly dismantling arrears will help stimulate the economy as more liquidity would be available,” he said. According to the Ministry of Finance and National Planning, the total arrears under the domestic debt dismantling strategy, covering the period from 2024 to 2029, amounted to K88.65 billion as of March 2024. Finance Minister Situmbeko Musokotwane provided an update in his budget speech, revealing that the stock of outstanding government bills had decreased by 18.3 percent to K79.8 billion as of June 2024, down from K97.7 billion in December 2023. Read more: Zambia Monitor
The Zambia Association of Manufacturers (ZAM) has urged the Energy Regulation Board (ERB) to implement mechanisms that enable manufacturers to access fuel in wholesale quantities, a measure they believe is essential for stable industrial operations. ZAM president, Ashu Sagar, suggested that ERB could alternatively establish dedicated bulk supply points for industrial users. In a statement issued in Lusaka on Sunday, Sagar highlighted that limited access to bulk fuel was hindering the manufacturing sector’s effectiveness and productivity. “These provisions would allow manufacturers to secure necessary volumes for uninterrupted operations, supporting both productivity and economic resilience,” Sagar said. He acknowledged ERB’s recent initiatives to address market challenges, as outlined in its November 1 press release, noting that these efforts reflect a commitment to maintaining fuel availability and managing price volatility. However, Sagar pointed out that limited bulk access had compounded the sector’s difficulties, particularly with ongoing load-shedding and power disruptions. “Manufacturers are increasingly reliant on diesel generators, but retail-only fuel access hampers efficiency and adds costs,” he stated. Read more: Zambia Monitor
In International News
December copper came under renewed pressure on Monday, falling some 1.7% to under $4.23 per pound ($9,320 per tonne) in afternoon trading on the CME in Chicago, bringing losses since a Trump victory became clear to close to 6%. The bellwether metal spiked at the end of September on optimism about Chinese economic stimulus, but is now down nearly 12% since then and is set to close Monday at a two-month low. Trump and the Republicans’ election sweep and the implications for commodities have brought volatility to metals markets and investors in major copper producers have taken a decidedly bearish turn. Stock in BHP traded down again in heavy volumes on Monday and has now fallen 6% since the US vote bringing the top listed producer’s decline year to date to over 21%. For the world’s number two miner Rio Tinto, the declines are 3% and 16%, respectively. Read more: Mining
Zimbabwe said it won’t grant further tax relief to mining houses from next January in a bid to force them to complete plants to process raw materials. The country’s platinum industry has already made progress in developing a base metal refinery plant, which is expected to come on line next year, the Ministry of Finance said Monday in a statement posted on X. Zimplats Holdings Ltd. has so far spent $29 million on the $190 million project. “Government has already introduced 5% beneficiation tax on the export of un beneficiated platinum, with a view to compel mining houses to invest in the requisite plants,” the Treasury said. “In addition, government removed customs duty on the importation of the equipment required in the setting up of beneficiation plants.” Zimbabwe President Emmerson Mnangagwa said last month the government would introduce incentives to encourage mining companies to process their output locally. The plan reflects a wider push across Africa to add value to natural resources before exporting them to reap greater economic rewards. Read more: Mining
The euro dropped to its lowest level in nearly seven months against the U.S. dollar on Monday, weighed down by investor worries about possible tariffs by a new White House administration which could hurt the euro area’s economy. The euro has edged lower since Donald Trump won the U.S. presidential election last week, sparking concerns about possible tariffs by his incoming administration. Several media outlets reported on Friday that Trump was lining up Robert Lighthizer, seen as a hawk on trade, to return to his previous post of running trade policy, which further weighed on the currency. Sources familiar with the matter said Trump has not asked Lighthizer to return to the agency overseeing trade policy. Read more: Reuters
Tesla’s market value closed above the $1 trillion mark in a sharp rally on Friday, on expectations that CEO Elon Musk’s companies will get favorable treatment under President-elect Donald Trump for his extensive support during the poll campaign. The electric automaker’s shares jumped 8.2% to $321.22, catapulting the company’s valuation above the trillion-dollar mark for the first time in more than two years. The stock gained 29% this week, adding more than $230 billion in market capitalization, its best since January 2023. “Tesla and CEO Elon Musk are perhaps the biggest winners from the election result, and we believe Trump’s victory will help expedite regulatory approval of the company’s autonomous driving technology,” said Garrett Nelson, senior equity analyst at CFRA Research. The billionaire could push for favorable regulation of autonomous vehicles that Tesla plans and also get the U.S. National Highway Traffic Safety Administration to hold off on potential enforcement actions involving the safety of Tesla’s current driver-assistance systems, a source had told Reuters. Read more: Reuters
The Dow Jones Industrial Average surged more than 300 points on Monday and closed at a record high above 44,000 for the first time, as the benchmark’s postelection rally pressed forward. The 30-stock Dow gained 304 points, or 0.69%, to 44,293.69. Both the S&P 500 and the Nasdaq Composite also closed at fresh records. The S&P 500 added 0.1% to end the day at 6,001.35, while the Nasdaq Composite inched up 0.06% to 19,298.76. JPMorgan Chase and Goldman Sachs popped 1% and 2.2%, respectively, to lead the Dow higher. Bank of America and Citigroup shares both closed up about 2%. The cohort has posted sharp gains since Donald Trump’s election win last week, as investors hope his return to the White House could lead to easier regulation of the banking sector. Read more: CNBC
Finally, Capital Markets News
In 77 trades recorded yesterday 7,480 shares were transacted resulting in a turnover of K51,358.72. The following price changes were recorded yesterday: -K0.01 in CEC Zambia, -K0.01 in PUMA and -K0.02 in Zambeef. Trading activity was also recorded in Airtel, Bata, Chilanga Cement, FARM, National Breweries, Standard Chartered Bank Limited, Zambia Breweries, ZANACO, Zambia Sugar a well as Pamodzi on the quoted tier. The LuSE All Share Index (LASI) closed at 15,987.87 points 0.04% lower than the previous trading day close. The market closed on a capitalization of K188,597,409,260.00 including Shoprite Holdings and K81,531,955,640.00 excluding Shoprite Holdings.
A total of 11 Govt Bond trades with a total quantity of K273,616,000 and turnover K267,422,430 were processed yesterday.
