Good afternoon. Here’s what you need to know
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Zambia’s Musokotwane Sees Commercial Creditor Deal In Months
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Zambia Seeks $900 Million as Drought Set to Halve Growth
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Russia to grow faster than all advanced economies says IMF
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Nigeria sees record inflation in March
In Local Business and Finance News
Zambia has made good progress in concluding a marathon debt restructuring and is confident of soon striking agreements with its remaining creditors. “We expect the deal to be done in months,” said Finance Minister Situmbeko Musokotwane. “I am very confident that we have made a lot of progress,” he said in an interview with Bloomberg Television Tuesday in Washington. Read more: Bloomberg
The International Monetary Fund -IMF- Managing Director Kristalina Georgieva has encouraged Zambia to remain on the path of economic transformation despite the challenges posed by climate change and other shocks. Ms Georgieva observed that Zambia will do great with the many reforms in place and is heading in the right direction. She said this during the meeting with Finance Minister Situmbeko Musokotwane in the Washington DC on the sidelines of the Spring Meetings of the IMF and World Bank Group. And, Ms Georgieva congratulated Zambia for reaching an agreement with bondholders, further indicating that the progress was a major milestone under the G20 common framework. Meanwhile, Dr Musokotwane said President Hakainde Hichilema has thanked the leadership of the IMF for massively supporting the country during difficult and challenging times as the Government strove to attain debt restructuring. Read more: ZNBC
In support of His Excellency President Hakainde Hichilema’s decision to accelerate deployment of mini-grids through the 1000 Mini-grid Initiative, the Zambian government have today unveiled a new financial mechanism to support mini-grid developers: the Demand Stimulation Incentive. Spearheaded by The Rockefeller Foundation with support from the Global Alliance for People and Planet (GEAPP) and Sustainable Energy for All (SEforALL), this first-of-its-kind, results-based incentive will help overcome the barriers for mini-grid deployment, increasing energy access to Zambians. The Demand Stimulation Incentive will support rural development by powering productive uses of energy in communities currently lacking access to reliable electricity. Read more: Africa
President Hakainde Hichilema says the country is in urgent need of more than K23.5 billion to respond to effects of drought. He said this during a national address on Tuesday, noting that to effectively implement immediate life-saving and life-sustaining humanitarian and recovery needs, a total of K23.5 billion or US$ 940.6 million was urgently needed. “Of this amount, K1.3 billion, equivalent to US$51.2 million, is available leaving a financing gap of K22.2 billion equivalent to US$ 889.4 million,” he told the nation. The Head of State said specifically K12.6 billion was required for immediate food assistance, out of which K28.3 million was available, leaving a gap of about K12.54 billion. “For the education sector, particularly in expanding the school feeding programme, a sum of K784 million is urgently required. In the health sector, K2.5 billion is required, out of which K51.7 million is available, leaving a gap of K2.45 billion,” he stated. Children under five and pregnant and new mothers’ nutritional needs would require a total of K532 million, adding that water resources development and management would require K3.02 billion. President Hichilema also noted that agricultural production, as part of early recovery and resilience building, would require K2.5 billion. Read more: Zambian Monitor
Zambia and other African countries lose US$29 billion in education finance due to excessively low tax rates, according to a new report by the Tax and Education Alliance. The report compiled by the Alliance said that this was also compounded by the aggressive tax evasion by the wealthiest companies and individuals. Under the report, it was also established that a staggering 18.8 million girls are out of primary school in Africa who can be put back into school using the lost money. The Transforming Education Financing in Africa: A Strategic Agenda for the African Union Year of Education briefing revealed that sealing loopholes used for tax abuse and ensuring fair taxation can raise an additional US$146 billion in Africa every year. Read more: Zambia Monitor
In International News
An influential global body has forecast Russia’s economy will grow faster than all of the world’s advanced economies, including the US, this year. The International Monetary Fund (IMF) expects Russia to grow 3.2% this year, significantly more than the UK, France and Germany. Oil exports have “held steady” and government spending has “remained high” contributing to growth, the IMF said. Overall, it said the world economy had been “remarkably resilient” “Despite many gloomy predictions, the world avoided a recession, the banking system proved largely resilient, and major emerging market economies did not suffer sudden stops,” the IMF said. Read more: BBC News
UK Inflation has fallen to its lowest level in two-and-a-half years, driven largely by slowing food price rises. Prices rose by 3.2% in the year to March, down from 3.4% the month before, according to official figures. The cost of some items including meat, crumpets, chocolate biscuits, furniture and household items fell. However, petrol and diesel prices rose. While the overall rate of inflation has dropped, goods in the shops are still much more expensive than they were two years ago. Read more: BBC News
The US economy’s standout performance will be a major driver of global growth this year but could make America’s inflation problem harder to solve, according to the International Monetary Fund. The IMF upgraded Tuesday its forecast for US economic growth to 2.7% this year — 0.6 percentage points higher than it predicted as recently as January.The move highlights how the United States is outpacing other advanced economies, notably the European economy, which has struggled to regain momentum after the pandemic, with high interest rates and the lingering effects of earlier rises in energy costs weighing on activity. The Washington-based IMF expects the 20 countries that use the euro to grow just 0.8% this year, a downgrade of 0.1 percentage points from its January forecast. Read more: CNN
US stocks wavered Tuesday after Federal Reserve Chair Jerome Powell said a “lack of further progress” on inflation means the central bank likely won’t cut interest rates at its upcoming policy meeting just two weeks away, keeping them higher for longer. Stocks seesawed after Powell’s comments, closing mixed Tuesday. The Dow rose 64 points, or 0.2%. The S&P 500 fell 0.2% and the Nasdaq Composite lost 0.1%. Meanwhile, the 2-year Treasury yield topped 5% on Tuesday before retreating below that threshold to about 4.96%. “The recent data have clearly not given us greater confidence” that inflation is headed toward the central bank’s 2% goal, Powell said during a moderated discussion hosted by the Wilson Center. Instead, he said, there are indications “that it is likely to take longer than expected to achieve that confidence.” Read more: CNN
Canada will ask the wealthy to pay higher taxes as Prime Minister Justin Trudeau’s government seeks to shore up flagging support among young voters ahead of an election expected next year. Minister of Finance Chrystia Freeland said in the annual budget announcement on Tuesday that the wealthiest Canadians should pay more, while billions of dollars would be invested in education, housing, jobs and mental health services. The budget proposes 53 billion Canadian dollars ($38bn) in new spending over five years, much of it directed towards Millennials and Generation Z in the form of affordable housing, student grants and loans, rent subsidies and work placement programmes. Under the proposals, capital gains over 250,000 Canadian dollars ($180,804) would be taxed at 66.7 percent, up from 50 percent, raising nearly 20 billion Canadian dollars ($14.5bn) in revenue over five years. Read more: Al Jazeera
Nigeria’s headline inflation rate rose 1.50% to 33.20% in March, the country’s statistics bureau reported on Monday. The figure is the highest in 28 years. The National Bureau of Statistics attributed the increase to soaring food and energy costs. Consumer inflation in Africa’s most populous country has been on an upward trend for 15 straight months, eating into people’s incomes and draining savings. It was at 31.70% in February. The agency reported that food inflation stood at 40.01% in March 2024. It was at 37.92% in February. The removal of a fuel subsidy by new President Bola Tinubu last June has seen prices skyrocket in Nigeria, leaving millions of people struggling to meet basic needs. Read more: Africa News
Ghana is yet to reach a definitive deal with international bondholders towards the restructuring of about $13 billion of its external debt. The office of the Finance minister reassured Ghanaians Monday saying an interim agreement had been reached and that negotiations with bondholders were ongoing. Reuters reported that Ghana was unable to secure a workable debt deal with two bondholder groups. Ghana and its creditors seek to arrive to an agreement that is consistent with debt thresholds under the IMF debt sustainability targets. The hurdle is a setback for Ghana more than a year after the west African nation defaulted on most of its $30bn external debt. Read more: Africa News
The OPEC+ oil producers coalition, having seen departures like Angola in recent times, is considering Namibia for potential membership. This move comes as Namibia gears up to potentially become Africa’s fourth-largest oil producer by the next decade, according to an African industry official. In recent years, TotalEnergies and Shell have found around 2.6 billion barrels of oil, getting Namibia ready to start producing by 2030, Reuters reported. In the long run, OPEC, along with Russia and other members of OPEC+, aims to have Namibia as a full member, NJ Ayuk, executive chairman of the African Energy Chamber stated, adding that his organization has been helping facilitate discussions between the two parties. Business Insider
High corporate valuations could pose a significant risk to financial stability as market optimism becomes untethered from fundamentals, the IMF’s director of the Monetary and Capital Markets Department said Tuesday. Financial markets have been on a tear for much of this year, buoyed by falling inflation and hopes of forthcoming interest rate cuts. But that “optimism” has stretched company valuations to a point where that could become vulnerable to an economic shock, Tobias Adrian said. “We do worry in some segments where valuations have become quite stretched,” Adrian told CNBC’s Karen Tso Tuesday. “It was led by tech last year, but at this point, it’s really across the board that we have seen a run up in valuations. There’s always this question, if a negative shock were to hit to what extent do we see a readjustment of pricing,” he said. Read more: CNBC
One of the International Monetary Fund’s top economists signals little risk of a global recession, despite the ongoing rumblings of geopolitical uncertainty. The Washington DC-based institute this week nudged its global growth outlook slightly higher to 3.2% in 2024 and projects the same rate in 2025. “When we do the risk assessment around that baseline, the chances that we would have something like a global recession is fairly minimal. At this point, it will take a lot to derail this economy. So there has been tremendous resilience in terms of growth prospects,” Pierre-Olivier Gourinchas, economic counsellor and director of the research department at the IMF, told CNBC’s Karen Tso on Tuesday at the group’s meeting in New York. The “set of good news” includes strong economic performance by the U.S. and several emerging market economies, along with inflation falling faster than expected until recently despite weaker growth in Europe, Gourinchas said. Read more: CNBC
Finally, Capital Markets News
In 128 trades recorded yesterday, 1,375,751 shares were transacted resulting in a turnover of K12,021,612.65. No price changes were recorded yesterday. Trading activity was recorded in AECI, CEC Zambia, Chilanga Cement, Real Estate Investments Zambia, Standard Chartered Bank Limited, Zambeef, ZANACO and ZAFFICO. The LuSE All Share Index (LASI) maintained its previous day close at 12,766.68 points. The market closed on a capitalization of K99,736,978,002.09 including Shoprite Holdings and 64,954,292,562.09 excluding Shoprite Holdings.
45 Govt Bond trades with total face value of K224,110,000 were processed yesterday, resulting in a total turnover of K160,192,870.
