Good morning. Here’s what you need to know
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EU, UN sign K125 million cooperation agreement for Zambia’s drought response
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Govt invites stakeholders to contribute to 2025 National Budget
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Ghana Secures $360 Million IMF Funding After $4.7 Billion Debt Restructuring Deal
In Local Business and Finance News
European Union (EU) and UNICEF have signed a cooperation agreement for a total value of about K125 million or EUR4.5 million to prevent severe nutrient deficiencies in some of the districts most affected by the drought. The beneficiary districts include Zambezi, Shang’ombo, Kalabo, Mongu, Choma and Monze, which are among the most affected by the drought. Speaking at the signing of the agreement, United Nations (UN) Resident Coordinator in Zambia, Beatrice Mutali said with this significant contribution, about 89,741 women and children in the four target districts will receive food assistance, cash transfers, nutrient supplements as well as treatment of severe wasting, the deadliest form of malnutrition. Ms. Mutali stated that this boost to the Government-led drought response comes at a crucial time, when people in 84 districts of Zambia are grappling with the severe impacts of drought amid the projected consequent rise in nutrition-related illnesses. Read more: Money FM
Finance Minister Situmbeko Musokotwane says the government is implementing fiscal reforms to control the country’s debt. Dr. Musokotwane says the homegrown economic reform program has successfully passed each review, underscoring government’s determination to restore fiscal and debt sustainability. Dr. Musokotwane said this in a speech read on his behalf by Secretary to the Treasury Felix Nkulukusa at 14th Debt Management Facility-DMF stakeholders’ forum in Livingstone. He said the government is committed to ensuring that the country’s debt management strategies support national development priorities, promote economic growth, create jobs, and reduce poverty. The Finance Minister said in recent months, the country has achieved significant milestones by reaching agreements with its bilateral creditor group and bondholders, covering about 75 percent of the debt within the restructuring perimeter. Read more: ZNBC
Finance and National Planning Minister, Situmbeko Musokotwane, has encouraged stakeholders to make submissions towards the 2025 national budget. Musokotwane said the budget would focus on restoring macroeconomic stability, achieving fiscal consolidation and ensuring debt sustainability. Speaking during a consultative meeting for the preparation of the 2025 national budget and the 2025-2027 Medium Term Budget Plan on Tuesday in Lusaka, in a speech read on his behalf by the acting Secretary to the Treasury, Sandy Manza, the Minister outlined the government’s priorities. Musokotwane stated that the budget would also aim to enhance economic efficiency and boost private sector-led economic growth through increased investments. Additionally, the budget would focus on building resilience into the economy to ensure that economic activity, especially in agriculture, withstands climate change and other shocks. Read more: Zambia Monitor
President Hakainde Hichilema has announced that US$90 million has been secured for the 300 Megawatts Maamba Collieries Phase II power plant project. He stated that the project would soon be launched once all modalities are met by the company. The President made this announcement during a media briefing at State House in Lusaka on Tuesday, where he also addressed several other issues, including his directive that hospitals should not be subjected to load shedding. Recently, Energy Minister, Peter Kapala, mentioned that Maamba Collieries was seeking government’s participation in sourcing US$300 million towards the phase two expansion of its power plant. “Major steps have been taken to address the energy crisis in the country, such as working on a lifeline power supply for small businesses in communities negatively affected by energy insecurity caused by the El Niño-induced drought,” President Hichilema said. Additionally, Hichilema reiterated that the government expected companies selling solar products to reduce their prices because the government has zero-rated tax on solar equipment. Read more: Zambia Monitor
In International News
Ghana has finalized a significant debt restructuring agreement, securing a $4.7 billion reduction from Eurobond holders, representing 37% of its $13 billion debt load. This move paves the way for the country to receive the next tranche of $360 million in funding from the International Monetary Fund (IMF). Debt Restructuring: A Crucial Step in Ghana’s Economic Recovery After extensive negotiations, Ghana’s institutional bondholders have agreed to a 37% cut in their principal and extended bond maturities until March 2027. This debt restructuring, a crucial step in Ghana’s economic recovery journey, comes at a time when the country is striving to overcome the challenges of defaulting on most of its $30 billion external debt in 2022. The agreement offers Eurobond holders two options: the ‘DISCO’ bond option provides a 5% interest rate on new bonds until July 2028, increasing to 6%. This option involves a haircut, which means bondholders will receive less than the face value of their bonds. Alternatively, the ‘PAR’ option offers a 1.5% interest rate on bonds without any haircut. This means bondholders will receive the full face value of their bonds, but at a lower interest rate. The choice between these two options depends on the bondholders’ risk appetite and their long-term investment strategy. Read more: NewsGhana
He’s had his critics over the last eight years, but you could never really fault Akinwumi Adesina for a lack of passion and resilience. The newspapers have called him Africa’s optimist-in-chief; surely, the Nigerian would have been a poor president of the AfDB if he were a pessimist. This is Adesina’s valedictory year and he will be circling the globe talking to investors and world leaders with his brand of pragmatism blended with irrepressible optimism. Within a week of this fleeting trip to London he was at the G7 Leaders’ Summit, shaking hands with world leaders including US President Joe Biden, India’s Prime Minister Narendra Modi and the Pope. Read more: African Business
The South African rand weakened in early trade on Wednesday, as markets awaited the announcement of President Cyril Ramaphosa’s cabinet expected soon, with uncertainty over key appointments in the executive. At 0639 GMT, the rand traded at 18.31 against the dollar , about 0.45% weaker than its previous close. The ANC lost its parliamentary majority in an election last month for the first time since the end of apartheid three decades ago, forcing it to share power with smaller rivals. Financial markets wait with bated breath over the make up of Ramaphosa’s new cabinet, after 10 political parties signed up to form a government of national unity. The pro-business Democratic Alliance is a market favourite. “Appointments from the Democratic Alliance could bolster the rand, while familiar ANC names might have the opposite effect,” said Zain Vawda, market analyst at OANDA, on Tuesday. Read more: Reuters
Asian stocks stuttered in choppy trade on Wednesday as markets braced for a key U.S. inflation reading, while the yen lurked just shy of 160 per dollar level, keeping traders on alert for another round of intervention by Japanese authorities. Risk sentiment was also capped as hawkish comments from Federal Reserve officials kept near-term U.S. rate cut expectations in check in a boost to the dollar. A jump in Australian consumer inflation to a six-month high in May lifted the Australian dollar to its highest in two weeks. MSCI’s broadest index of Asia-Pacific shares outside Japan struggled for direction and was flat at 566.53, not far from the two-year high of 573.38 it hit last week. Japan’s Nikkei and Taiwan stocks rose, led by chipmakers, tracking the rally in tech heavy Nasdaq on Tuesday, with surging over 6%, snapping out of a three-session tailspin that had erased about $430 billion from its market value. Read more: Reuters
Finally, Capital Markets News
In 47 trades recorded yesterday, 25,548 shares were transacted resulting in a turnover of K146,439.00. The following price changes were recorded yesterday: +K0.05 in CEC Zambia, +K0.01 in Zambeef and +K0.03 in ZANACO. Trading activity was also recorded in Real Estate Investments Zambia, Standard Chartered Bank Limited, Zambia Breweries, Zambia Sugar and CEC Africa on the quoted tier. The LuSE All Share Index (LASI) closed at 13,872.06 points, 0.21% higher than its previous day close at 13,843.63 points. The market closed on a capitalization of K113,466,820,543.83 including Shoprite Holdings and K69,988,463,743.83 excluding Shoprite Holdings.
7 Govt Bonds trade with total face value of K9,893,000 and turnover K6,778,280 were processed yesterday.