As Zambian investors bet on the new government’s chances of securing a bailout deal with the International Monetary Fund, Zambia’s currency is on the course of gaining value in the African and global market.
Financial reports confirm that the Kwacha has advanced 27% against the dollar this year, largely on the back of optimism over the August election victory of Hakainde Hichilema.
Since 2005, that’s the currency’s best annual performance.
President Hichilema’s government is trying to rework as much as $17 billion in external public debt.
Hichilema needs the IMF’s endorsement to advance talks with creditors ranging from holders of $3 billion in Eurobonds to $5.8 billion owed to China. Finance Minister Situmbeko Musokotwane plans to conclude negotiations by the middle of 2022.
The country became Africa’s first pandemic-era sovereign defaulter last year and hasn’t serviced most dollar debt since then.
The second-biggest copper-producing country in Africa has also been buoyed by near-record prices for the metal, which makes up more than 70% of export earnings.