Zambia cuts projects to reduce debt exposure
Zambia cuts projects to reduce debt exposure

Zambia cuts projects to reduce debt exposure

Zambia’s gross international reserves declined by US$117.7 million in the fourth quarter to US$1.2 billion.
Jo-Mare Duddy Booysen
Chris Mfula - Zambia has scaled back, postponed or cancelled projects to reduce the southern African copper producer's debt exposure as it holds talks to secure a programme from the International Monetary Fund, the central bank governor said yesterday.

Zambia, which became Africa's first pandemic-era sovereign default late last year, began discussions with the IMF last week and has requested debt relief under a new common framework from the Group of 20 major economies.

"Our understanding is that actions are being taken to scale down and reduce the debt exposure of the country, if not stop it for now," Bank of Zambia governor Christopher Mvunga told journalists, adding that discussions with the IMF had been "cordial".

"If I look at the disclosure of the debt portfolio, it's not moving upwards other than probably existing disbursements. So my reading of that is that the matter is being addressed," he said following a meeting of the monetary policy committee.

CENTRAL BANK

The bank raised lending rates by 50 basis points to 8.5% yesterday, saying it was ready to tighten policy further to tame rising consumer inflation driven by "cost-push" pressures and a sharp depreciation in the currency.

Mvunga said annual overall inflation accelerated to a four-year high of 17.6% in the fourth quarter of 2020 from 15.7% the quarter before. Inflation is projected to deviate further from the 6% to 8% target range over the next eight quarters, he said.

The partial easing of Covid-19 restrictions, meanwhile, saw a softer deterioration of private-sector business in the second half of 2020.

"Indicators of domestic economic activity point to a less severe contraction, but weak recovery is projected in the medium-term," Mvunga said.

Gross international reserves declined by US$117.7 million in the fourth quarter to US$1.2 billion, or the equivalent of 2.4 months of import cover, caused mainly by foreign exchange interventions and debt service.

The Bank of Zambia said in December it would begin buying gold from Canadian miner First Quantum Minerals and the state mining firm as it resumed holding the precious metal as part of its foreign reserves.

Mvunga said the bank had purchased 47 kilogrammes of gold from state mining investment firm ZCCM-IH's Zambia Gold Company and aimed to buy 21 000 ounces in 2021.

It will also buy 25 200 ounces of London Good Delivery Gold this year from First Quantum's Kansanshi mine, which produces gold as a by-product of its copper production. – Nampa/Reuters

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Nam 2.22 SAME | Oryx Properties Ltd 12.1 UP 1.70% | Paratus Namibia Holdings 11.99 SAME | SBN Holdings 8.45 SAME | Trustco Group Holdings Ltd 0.48 SAME | B2Gold Corporation 47.34 DOWN 1.50% | Local Index closed 677.62 UP 0.12% | Overall Index closed 1534.6 DOWN 0.05% | Osino Resources Corp 19.47 DOWN 2.41% | Commodities: Gold US$ 2 208.02/OZ UP +0.79% | Copper US$ 3.97/lb DOWN -0.0034 | Zinc US$ 2 444.40/T DOWN -0.49% | Brent Crude Oil US$ 87.34/BBP UP +1.11% | Platinum US$ 899.07/OZ UP +0.47% Sport results: Weather: Katima Mulilo: 19° | 37° Rundu: 17° | 33° Eenhana: 18° | 33° Oshakati: 20° | 31° Ruacana: 19° | 33° Tsumeb: 17° | 29° Otjiwarongo: 16° | 28° Omaruru: 18° | 31° Windhoek: 17° | 28° Gobabis: 17° | 28° Henties Bay: 16° | 19° Wind speed: 24km/h, Wind direction: S, Low tide: 10:54, High tide: 04:57, Low Tide: 22:58, High tide: 17:16 Swakopmund: 15° | 17° Wind speed: 29km/h, Wind direction: SW, Low tide: 10:52, High tide: 04:55, Low Tide: 22:56, High tide: 17:14 Walvis Bay: 16° | 22° Wind speed: 33km/h, Wind direction: SW, Low tide: 10:52, High tide: 04:54, Low Tide: 22:56, High tide: 17:13 Rehoboth: 18° | 29° Mariental: 22° | 32° Keetmanshoop: 21° | 34° Aranos: 21° | 31° Lüderitz: 15° | 29° Ariamsvlei: 23° | 34° Oranjemund: 15° | 21° Luanda: 27° | 30° Gaborone: 20° | 32° Lubumbashi: 17° | 24° Mbabane: 15° | 23° Maseru: 12° | 28° Antananarivo: 16° | 27° Lilongwe: 17° | 29° Maputo: 20° | 28° Windhoek: 17° | 28° Cape Town: 17° | 23° Durban: 21° | 25° Johannesburg: 18° | 28° Dar es Salaam: 26° | 32° Lusaka: 18° | 30° Harare: 15° | 31° Economic Indicators: Currency: GBP to NAD 23.93 | EUR to NAD 20.49 | CNY to NAD 2.63 | USD to NAD 18.99 | DZD to NAD 0.14 | AOA to NAD 0.02 | BWP to NAD 1.33 | EGP to NAD 0.39 | KES to NAD 0.14 | NGN to NAD 0.01 | ZMW to NAD 0.74 | ZWL to NAD 0.04 | BRL to NAD 3.8 | RUB to NAD 0.2 | INR to NAD 0.23 | USD to DZD 134.13 | USD to AOA 832.63 | USD to BWP 13.71 | USD to EGP 47.3 | USD to KES 130.98 | USD to NGN 1415.13 | USD to ZAR 19.03 | USD to ZMW 24.97 | USD to ZWL 321 | Stock Exchange: JSE All Share Index 73909.5 Up +0.41% | Namibian Stock Exchange (NSX) Overall Index 1516.02 Down -0.13% | Casablanca Stock Exchange (CSE) MASI 12981.98 Up +0.34% | Egyptian Exchange (EGX) 30 Index 28224.37 Down -2.87% | Botswana Stock Exchange (BSE) DCI Same 0 | NSX: MTC 7.75 SAME | Anirep 8.99 SAME | Capricorn Investment group 17.34 SAME | FirstRand Namibia Ltd 49 DOWN 0.50% | Letshego Holdings (Namibia) Ltd 4.1 UP 2.50% | Namibia Asset Management Ltd 0.7 SAME | Namibia Breweries Ltd 31.49 UP 0.03% | Nictus Holdings - Nam 2.22 SAME | Oryx Properties Ltd 12.1 UP 1.70% | Paratus Namibia Holdings 11.99 SAME | SBN Holdings 8.45 SAME | Trustco Group Holdings Ltd 0.48 SAME | B2Gold Corporation 47.34 DOWN 1.50% | Local Index closed 677.62 UP 0.12% | Overall Index closed 1534.6 DOWN 0.05% | Osino Resources Corp 19.47 DOWN 2.41% | Commodities: Gold US$ 2 208.02/OZ UP +0.79% | Copper US$ 3.97/lb DOWN -0.0034 | Zinc US$ 2 444.40/T DOWN -0.49% | Brent Crude Oil US$ 87.34/BBP UP +1.11% | Platinum US$ 899.07/OZ UP +0.47%