By BUUMBA CHIMBULU
THE surging of Zambia’s US$1 billion Eurobonds on the international market signifies investor confidence in the new government regime.
Zambia’s US$1 billion Eurobonds due in 2024 surged 8.7 percent to 72.1 cents on the dollar in London, the biggest gain since June 2020.
Bridges Limited Managing Consultant, Chibamba Kanyama, in response to a press query indicated that the rallying Eurobonds signalled confidence in both the short and long term.
Mr Kanyama attributed the attractiveness of the Eurobonds to investor confidence in the new government.
“In the past few months, the risk profile for Zambia was very poor largely to the uncertainty of a conducive investment climate. Investors were also not sure whether Zambia would successfully transit.
“Investors wanted Hakainde Hichilema to be president. I know this for a fact because I was among those local minds they constantly engaged. Investors had very poor confidence in the capacity of the previous regime to run the economy,” he stated.
Mr Kanyama indicated that investors believed in the new leadership as they had researched significantly about the new leader.
He explained that investors were aware that Zambia’s risk profile would improve and that the new leadership would deliver on the thorny issues affecting the economy.
“They researched significantly about the new leader. This is someone they know and believe in. In other words, the rallying bonds signal confidence in both the short and long term,” Mr Kanyama said.
He however advised the new government to demonstrate capacity to deliver on its promises particularly on the needed economic reforms.
This, he stressed, could only be achieved by appointing competent ministers and technocrats in key areas of government.
He emphasised that fiscal discipline was a must to attracting investment in key areas.
“With a focus on the role of the private sector, we will see growth in all sectors, including agriculture which holds better capacity to alleviate poverty.
“It will take quite long to tame the high cost of living but with consistency on policy framework and departing from corruption, the cost of living shall reduce,” Mr Kanyama said.
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