Zambia Bonds Jump Following Debt Deals with India and China

The value of  Zambia’s dollar bonds rose sharply on Monday after President Hichilema said that the country’s two biggest debtors, India and China, had signed creditor agreements. The bonds traded at their highest levels in almost 18 months.

The value of the country's $1.25 billion worth of notes maturing in 2027 experienced its most significant single-day increase since October. The bond saw a rise of over 2.4 cents on the dollar, reaching 68.58 cents, its highest point since June 2022. This follows recent news that the Kwacha is Africa’s best performing currency against the US dollar for the current year.

This vote of confidence in Zambia’s economy will likely reduce the cost of government borrowing, freeing up  funds to invest in public services, such as roads, schools, and hospitals. The agreement with China and India also brings the country a step closer to an overall debt deal, which will deliver longterm economic stability and increase investment into Zambian businesses.

In a television address, Hichilema stated that the debt agreement will allow the country to continue pursuing restructuring deals with private creditors. Sam Singh-Jami, Africa strategist at Rand Merchant Bank, said, “We are now a step closer for Zambia to restructure all of its external debt in a very protracted process.”