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What Decides Where the Kwacha Closes Each Day?

The Zambian Economist — Mon, 26 Oct 2026 11:30:58 +0000

Nobody announces the kwacha’s closing rate, not even the Bank of Zambia. It is the last price at which banks agreed to swap dollars for kwacha, and it depends on who turned up that day with dollars to sell and who turned up with bills to pay.

By Lubinda Sinyani | The Zambian Economist Analyst | 26 October 2026

KEY TAKEAWAYS

The kwacha’s end-of-day rate is the price of the last deals struck between commercial banks on the interbank market. The Bank of Zambia publishes reference rates but does not fix the price.
On any given day the rate turns on the balance between dollar sellers (mines, exporters, companies converting for salaries and taxes) and dollar buyers (fuel importers, manufacturers, firms paying foreign suppliers and lenders).
Concentrated demand can move the rate fast: on 6 October the kwacha fell as much as 6% in one session, to 21 per dollar, after temporary foreign exchange waivers for energy importers ended.
Copper prices, oil prices, the global strength of the US dollar and the Bank of Zambia’s interest rate decisions shape the backdrop, but they reach the market through those daily flows.
Month-end conversions should keep the kwacha in a narrow range this week. The reinstatement of VAT on fuel on 1 December and the next policy meeting on 25 to 26 November are the next tests.

The kwacha’s closing rate is set by trading between Zambia’s commercial banks on the interbank foreign exchange market, where dealers buy and sell dollars for mining houses, importers, government agencies and their own books. The Bank of Zambia does not decide it. The figure you see at the end of the day is where the last deals were done, and most days it answers one plain question: were there more dollars for sale than people wanting to buy them?

On Friday 23 October the Bank of Zambia’s mid-rate stood at K20.1145 to the dollar. This year has shown how far that number can travel. The kwacha opened 2026 at about K22.19, strengthened to roughly K17.3 by mid-June, and has since given back a large part of the gain. Even so, it remained the best performer among 12 African currencies tracked by The Rio Times, up 14.8% between 31 December and 9 October.

Where the price is actually made

Every bank that deals in foreign currency quotes two prices: a bid, at which it will buy dollars, and an offer, at which it will sell. On a quiet Friday earlier this month, Absa Bank Zambia reported the kwacha trading at K19.85 and K19.90 for the whole session. Nothing moved because the dollars on offer roughly matched the dollars wanted.

The Bank of Zambia sets the rules of this market rather than the price. Under its Interbank Foreign Exchange Market Rules, revised in June 2024, banks must update the rates on their retail boards at 09:30, 12:30 and 15:30, and keep those retail rates wide enough that the interbank price sits inside them. Large deals, above US$5 million since March 2025 when the central bank raised the threshold from US$1 million, can be priced by negotiation between bank and client.

That 09:30 snapshot carries legal weight. Since 26 December 2025, the Bank of Zambia Currency Directives have required domestic transactions to be settled in kwacha. A contract may still be priced in dollars, but where the parties have not agreed which market rate applies, the central bank’s 09:30 mid-rate becomes the reference.

Who walks in with dollars, and who walks in needing them

Think of each trading day as a queue on both sides of the counter.

Bringing dollars to the market	Taking dollars out of the market
Mining companies converting export earnings to pay wages, local suppliers and royalties	Fuel importers paying for petrol, diesel and jet fuel, all bought in dollars
Exporters of agricultural and manufactured goods	Manufacturers and retailers paying for imported inputs and stock
Companies converting for month-end salaries and tax payments due in kwacha	Firms paying foreign loans, dividends, freight and service fees
Foreign investors buying government securities	Investors selling securities and taking money home
The Bank of Zambia, when it chooses to sell from reserves	The Bank of Zambia, when it buys to add to reserves

Timing matters more than volume. Mining houses do not sell dollars every morning. They convert when their own payment calendar requires it, and that calendar bunches up near month-end, when salaries and taxes fall due. Traders polled by Reuters last week expected the kwacha to stay range-bound for exactly that reason, as corporates sold dollars for month-end payments, even though banks were selling the dollar at K20.37, up from K20.18 a week earlier.

Mining tax is a special channel. Under the 2025 directives, mines may pay their taxes by selling foreign currency directly to the Bank of Zambia at its published mid-rate. Those dollars go into the reserves instead of the interbank pool, which gives the central bank more to work with when it decides to step in. Governor Denny Kalyalya told the September policy briefing that about US$1.2 billion in mining sector revenue had added to foreign exchange supply in the third quarter, when the kwacha appreciated 8.3%.

On the buying side, nobody is more regular than the fuel importers. Zambia imports all of its refined petroleum, and the Energy Regulation Board’s October review showed the reference price of petrol rising to US$121.58 a barrel. Every litre sold at a Lusaka pump eventually needs dollars from the interbank market.

What 6 October taught the market

The clearest recent illustration came on Tuesday 6 October. For part of the year, energy importers had operated under temporary foreign exchange waivers. When those ended, their demand arrived in the commercial market all at once. The kwacha fell as much as 6% in a single session, its biggest intraday drop in more than three years, and touched 21 per dollar before recovering to about 19.84, according to Bloomberg. It was the sixth straight day of losses, helped along by a stronger US dollar and high oil prices.

No fundamental changed overnight. Copper was still selling at around US$14,000 a tonne. What changed was the queue: a large group of buyers turned up in a market that was not deep enough to absorb them at the previous price. Once sellers saw the rush, some held back their dollars, expecting a better rate later. That is how a day’s closing price can overshoot, and why the same currency can recover much of the loss before lunch.

The Bank of Zambia’s hand

Zambia runs a floating exchange rate, with the central bank stepping in to smooth sharp swings rather than to defend a particular level. The 2024 rules allow it to tell banks in advance when it will be in the market, and it has more ammunition than in recent years: gross international reserves reached a record US$6.5 billion in February 2026.

Interest rates work more slowly. On 30 September the Monetary Policy Committee cut the policy rate by 250 basis points to 10.75%, from 13.25%, with inflation at 6.1% and inside the 6 to 8% target band. Bloomberg described it as the deepest cut since at least 2012. Lower yields on Treasury bills make kwacha assets less attractive to foreign portfolio investors over time, which can reduce one source of dollar inflow. In my reading, the October weakness owes far more to import demand than to the rate cut, but the cut removes some of the cushion that high yields used to provide.

The world outside Zambia

Copper accounts for roughly seven of every ten dollars Zambia earns from exports, so its price sets how many dollars the mines eventually bring home. Oil works on the other side of the ledger, deciding how much the fuel importers have to buy, and its effect is sharper when the US dollar is rallying against everything. On those days most emerging market currencies weaken together, and the kwacha rarely escapes.

None of these moves the kwacha by itself in a given afternoon. They change the size of the queues. A rise in copper prices today may only show up in the kwacha weeks later, when the extra export earnings are converted.

Why your bank’s rate is not the screen rate

If you buy dollars at a branch or a bureau de change, you will pay more than the interbank figure quoted in the news. Banks add a retail margin, and the rules cap it from both sides: a bank may not buy dollars from retail and corporate clients above its current interbank bid, nor sell to them above its posted board rate. Bureaux set their own prices within the market. The gap between what you pay and the headline number is the cost of being a small buyer in a wholesale market.

Quick answers

Who sets the kwacha exchange rate?

Commercial banks trading with one another on the interbank market. The Bank of Zambia publishes buying, selling and mid-rates and can buy or sell dollars, but it does not fix the price.

What time is the official reference rate set?

The Bank of Zambia’s 09:30 mid-rate is the default reference for contracts settled in kwacha. Banks also update their retail boards at 12:30 and 15:30.

Can anyone predict where the kwacha will close today?

Not with precision. Dealers watch for large known flows, such as month-end conversions, fuel import payments and central bank announcements, which tell them which way the day is likely to lean.

What to watch next

Month-end conversions should keep the kwacha in a narrow band this week. After that, three dates matter. The Energy Regulation Board’s November review will show whether the October fuel increases bit into import volumes. The Monetary Policy Committee meets on 25 and 26 November. And VAT on fuel returns on 1 December, which will push pump prices up and, through them, the cost of almost everything that moves by road.

If you run a business that pays suppliers in dollars, the practical point is about timing. The last days of the month, when mines and large companies convert dollars to meet kwacha bills, are usually when supply in the market is deepest. Watching that calendar, and the date of the next fuel review, will tell you more about your costs than checking the rate every afternoon. A week like 6 October is a reminder that the pattern can break.

About the author

Lubinda Sinyani

Economist, Researcher and Governance Specialist | Lusaka, Zambia

Lubinda Sinyani is a Zambian economist and researcher with experience in public sector research, economic policy, auditing and strategic communication. He sits on the Anti-Corruption Commission of Zambia’s Board Technical Committee on Corruption Prevention and Communication, and was Vice Chairperson of the Economics Association of Zambia’s National Economic Summit from 2019 to 2021. He holds a Specialist Degree in Economics and Law from Moscow Region State Institute of Humanities and Social Studies, recognised by ZAQA as equivalent to a Master’s degree.

Read his contributor profile · More by Lubinda Sinyani

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EAZ urges clear tax rules and measurable reforms at HLB Tax Indaba

The Zambian Economist — Thu, 15 Oct 2026 16:43:04 +0000

The Economics Association of Zambia calls for predictable tax administration and evidence-based reforms that support revenue collection, business growth and household welfare.

By The Zambian Economist Analyst

Key Takeaways

EAZ participated in the second HLB Tax Indaba at Ciela Resort in Lusaka.
National Secretary Dr John Musantu delivered special guest remarks on behalf of EAZ President Dr Edna Kabala-Litana.
The Association called for clear tax rules, predictable administration and fair treatment of taxpayers.
Musantu urged participants to propose implementable and measurable reforms.

The Economics Association of Zambia (EAZ) has called for clear tax rules, predictable administration and fair treatment of taxpayers to strengthen domestic revenue mobilisation and support economic growth.

EAZ National Secretary Dr John Musantu made the call at the second edition of the HLB Tax Indaba at Ciela Resort in Lusaka, where he delivered special guest remarks on behalf of Association President Dr Edna Kabala-Litana.

Convened by HLB Zambia, the 15-16 October 2026 event is being held under the theme “Tax Beyond Compliance: Driving Growth, Governance and Value”.

The Indaba brings together the Zambia Revenue Authority (ZRA), the Zambia Institute of Chartered Accountants (ZICA), business leaders, tax practitioners and economists.

Clear rules and fair administration

Musantu congratulated HLB Zambia for providing a platform connecting tax policy and administration with growth, investment and national development.

“Zambia needs a sustainable domestic revenue base, but sustainable mobilisation is strongest when tax rules are clear, administration is predictable, taxpayers are treated fairly and public resources are managed responsibly,” he said.

He said tax measures should be informed by evidence and assessed for their wider economic effects.

“Tax measures should be informed by evidence and assessed not only for revenue raised, but for their effects on competitiveness, business growth and household welfare.”

Taxpayer confidence and measurable reforms

Musantu said enforcement alone could not be the foundation of compliance, stressing the importance of taxpayer education, consultation and consistent administration in building confidence.

He urged participants to move beyond identifying challenges and propose reforms that could be implemented and measured.

EAZ reaffirmed its commitment to evidence-based economic dialogue in support of a tax system that mobilises revenue while enabling a dynamic and competitive Zambian economy.

Explore our Banking & Finance coverage and Macroeconomy & Policy reporting. Related: Zambia’s manufacturing vision and the cost of doing business; Judging development finance by lasting results.

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EAZ Backs US$1.5 Billion IMF Deal, Wants Treasury to Leave Room for Private Borrowers

The Zambian Economist — Mon, 12 Oct 2026 10:21:37 +0000

The Economics Association of Zambia has welcomed the IMF staff-level agreement as the cheapest kind of money Zambia can borrow. Its statement also carries a warning: the Grow Zambia Agenda will not work if government keeps soaking up the credit that businesses need.

By The Zambian Economist Analyst

KEY TAKEAWAYS

The Economics Association of Zambia (EAZ) has welcomed the staff-level agreement on a new IMF Extended Credit Facility of about US$1.5 billion (SDR 1.076 billion, roughly US$1.47 billion), calling it concessional finance of the kind Zambia should prioritise.
EAZ says the facility carries zero interest and should help hold inflation, interest rates, the exchange rate and reserves steady, which it describes as a necessary condition for the Grow Zambia Agenda.
The association wants the deal to reduce government borrowing on the domestic market, so that banks lend more to businesses and less to the Treasury.
It points to external shocks, from conflict-driven oil prices to a weather outlook that threatens energy and agriculture, as reasons the agreement has come at the right time.
EAZ asks government to keep disclosing information openly. The staff-level agreement still needs IMF Management and Executive Board approval before any money is released.

The Economics Association of Zambia has backed the staff-level agreement Zambia reached with the International Monetary Fund on 9 October, describing the proposed Extended Credit Facility as a welcome source of concessional finance at a time of mounting external risk. The statement was issued by EAZ National Secretary Dr John Musantu.

The agreement covers a proposed 36-month arrangement worth SDR 1.076 billion, about US$1.47 billion, which EAZ rounds to US$1.5 billion. It follows the US$1.7 billion programme that helped Zambia through its debt restructuring and has since ended.

Why EAZ calls this the right kind of debt

The association starts from the financing problem behind the Grow Zambia Agenda, the government plan to double the size of the economy. Domestic money alone will not pay for it, EAZ argues, so Zambia needs outside funding. That comes mainly through foreign direct investment or debt, and if it is debt, the association says concessional loans should come first.

An IMF Extended Credit Facility fits that description. EAZ notes that the facility comes at zero interest. Commercial borrowing, such as Eurobonds, costs far more and was at the centre of the default Zambia spent several years restructuring.

Stability first, then growth

EAZ lists what it means by a stable macroeconomic environment: controlled inflation, affordable interest rates, a stable exchange rate, sufficient reserves and strong domestic revenue collection. In its words, that stability is “a key enabler if not necessary condition” for the growth plan.

The timing matters. The association points to geopolitical conflicts pushing up global oil prices and to a weather outlook that could hurt Zambia’s power supply and harvests. A forecast El Niño season in 2026/2027 has already raised concern about water levels for hydropower and about crop output.

The private sector question

The most pointed part of the statement is about domestic credit. When government borrows heavily at home, banks can earn safe returns on Treasury bills and bonds, and they have less reason to lend to small businesses. Economists call this crowding out.

EAZ wants the IMF agreement to reduce that pressure. Once the facility materialises, the association says, it should cut government’s need to borrow from the domestic market to meet its spending obligations. Banks would then have more room, and more reason, to lend to SMEs and the wider private sector.

“The Grow Zambia Agenda is only sustainable and feasible if the country can create a thriving and profitable private sector,” the statement reads.

What it means for businesses and households

For a business owner, the link runs through interest rates and the Kwacha. If government borrows less at home, pressure on domestic interest rates should ease over time, and loans become easier to get. If IMF support strengthens reserves and confidence, the Kwacha is likely to be steadier, which helps importers and anyone pricing goods in dollars.

For households, a steadier currency and lower inflation protect what a salary can buy. None of this is automatic. It depends on the programme being approved, on the reforms attached to it and on how the Treasury manages its borrowing in the 2027 Budget.

What happens next

A staff-level agreement is not yet a loan. The deal still needs agreed policy reforms, any prior actions and approval by IMF Management and the Executive Board. Finance Minister Dr Situmbeko Musokotwane is leading Zambia’s delegation at the IMF and World Bank Annual Meetings in Bangkok, which run until 18 October.

EAZ closed its statement by asking government to keep disclosing information openly, so that the public can debate economic policy on the facts as Zambia pursues its plan to double the size of the economy.

Hub: Macroeconomy & Policy.

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The Kwacha’s October Slide: Why Copper Dollars Are Not Enough

The Zambian Economist — Thu, 08 Oct 2026 20:03:44 +0000

The kwacha has weakened from K17.87 per dollar in June to roughly K19.9 in early October, even with copper selling near US$14,000 a tonne. The gap between those two facts is a story about timing: export earnings arrive on the mines’ schedule, while the fuel bill falls due every month.

By Kelvin Chisanga | The Zambian Economist Analyst | 8 October 2026

KEY TAKEAWAYS

The kwacha has weakened from K17.87 per dollar in June to about K19.9 in early October, giving back most of a gain that began the year at K20.31, as dollar demand from fuel and other imports outpaces the arrival of copper receipts.
Copper at about US$14,000 a tonne helped Zambia to a K30.1 billion trade surplus in the first seven months of 2026, but mining dollars reach the market on the mines’ payment schedule, not on the days importers need them.
Oil above US$100 a barrel pushed the ERB to raise pump prices to K31.46 for petrol and K33.27 for diesel in October, and changes in fuel-import arrangements have shifted more petroleum dollar demand into the commercial FX market.
The Bank of Zambia’s cut in the policy rate to 10.75% is a supporting factor rather than the cause: the arithmetic of imports, not interest rates, is doing most of the work on the exchange rate.
The danger is a second-round effect, in which a weaker kwacha raises fuel and input costs, prices climb, and businesses buy dollars early to beat further depreciation, adding fresh pressure on the currency.

The kwacha’s weakness is a rebalancing of the foreign-exchange market, not a collapse. The country is earning dollars from copper sales at prices around US$14,000 a tonne, and it is spending dollars on fuel, machinery, mining equipment and other imports at a faster pace. The outflows are landing in the market before the inflows do. That mismatch, more than any single policy decision, explains a rate that travelled from K20.31 per dollar in January to K17.87 in June and back out to roughly K19.9 in early October.

Whether the adjustment stops here is the question that matters for prices, wages and next year’s budget arithmetic. A correction that returns the kwacha part of the way is manageable. A slide that runs for another two quarters would work its way into pump prices, transport fares and the cost of every imported input, and from there into inflation.

A strong half-year, partly returned

The first six months of 2026 were kind to the kwacha. The currency gained roughly 12 percent between January and June, inflation settled inside the Bank of Zambia’s target band, and reserves held above four months of import cover, as we reported in our review of the second quarter.

Since then the rate has drifted back toward K20. On paper the external accounts still look steady: Zambia recorded a trade surplus of K30.1 billion in the first seven months of the year, driven by copper receipts. The currency market is telling a more precise story. The supply of dollars in any given week does not follow the annual trade account. It follows payment calendars.

Copper dollars arrive on their own schedule

A mining company selling copper at US$14,000 a tonne does not deliver those dollars to the interbank market the day the metal leaves the country. Receipts sit in accounts while suppliers, contractors, shareholders and lenders are paid. Only a share reaches the market, and it arrives when it suits the mines, not when an importer’s letter of credit falls due.

An importer bidding for dollars to clear a fuel shipment competes in that weekly market, not in the trade statistics. That is how a country can post a healthy surplus for seven straight months and still watch its currency soften. Zambia’s surplus is copper-heavy and concentrated in a handful of large mines, so the weekly supply of dollars depends on the disbursement decisions of a few treasury desks.

The fuel bill sets the floor for demand

Fuel has become the loudest voice in the demand queue. Oil has moved above US$100 a barrel, lifting the petroleum import bill at the same time as changes in fuel-import arrangements have brought more of that dollar demand directly into the commercial FX market.

The Energy Regulation Board has already passed part of the bill to consumers. Petrol rose to K31.46 a litre and diesel to K33.27 for October, ending six months of relief at the pump, as we reported when the new prices took effect. Petroleum is the hardest kind of dollar demand to defer. The country runs on imported fuel whatever the exchange rate does, and the bill arrives every month.

Global dollar strength adds a further layer. When the US currency firms against major trading partners, import bills rise across emerging markets, and Zambia feels it through the oil price and through the cost of everything else shipped in from abroad.

The rate cut is a supporting factor, not the cause

The Bank of Zambia cut its policy rate to 10.75%, and some commentary has pinned the kwacha’s weakness on the decision. The cut is a supporting factor at most. Lower kwacha yields reduce the return on holding local-currency assets, which can nudge some demand toward dollars, but the decision did not create the fuel bill and it does not set the payment calendars of the mines. The arithmetic of imports is doing most of the work.

The second-round effect is what to watch

The first round is already visible at filling stations, as we set out in our analysis of the October price shock. The second round is the risk. A weaker kwacha raises the local cost of fuel and imported inputs. Higher fuel costs pass into transport and production costs. Businesses that expect further depreciation buy dollars ahead of their needs, which adds demand and presses on the rate again.

Inflation is the gauge. It settled inside the target band by the middle of the year. If the coming prints start climbing on the back of fuel and transport costs, the loop will be forming, and the Bank of Zambia’s room to keep easing will shrink with it.

The copper-oil paradox

Underneath the monthly movement sits a structure Zambia has carried for decades. Copper brings the dollars in and fuel takes them out. The currency’s fortunes reduce to a race between one export price and one import price, both set in markets Zambia does not control, and in recent months the import price has been winning.

This is why Finance Minister Situmbeko Musokotwane’s push for export-led growth deserves to be read as exchange-rate policy as much as industrial policy. An economy that earns dollars from several sources on several calendars produces a currency that does not hinge on a single commodity cycle.

What a resilient kwacha would rest on

The response that works is not defending a particular level of the rate. It is widening the base of dollar earnings until the market can clear at a stable level on its own: agriculture and agro-processing selling into the region, manufacturing, tourism, services and copper value addition. Each of these earns foreign exchange on a different calendar from the mines, which is the point. A kwacha backed by one export is a kwacha on loan from the copper price.

Conclusion

For now, the move from K17.87 to about K19.9 reads as a market finding its level after an unusually strong half-year, stretched by an oil bill that will not wait for copper receipts to arrive. The numbers that decide what happens next are the oil price, the pace at which mining dollars reach the interbank market, and the inflation prints due in the coming two months. Zambia has been in this position before. The difference a diversified export base would make is that the answer would no longer depend on copper alone.

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EAZ Courts FNB Zambia for Post-Budget Dinner Support and a Formal Partnership

The Zambian Economist — Mon, 05 Oct 2026 15:27:16 +0000

The Economics Association of Zambia has taken its partnership drive from government to the banking sector. Its new leadership met FNB Zambia’s economics team on Monday to seek support for November’s Post-Budget Analysis Dinner and to propose a formal memorandum of understanding.

By The Zambian Economist Analyst

Photos: Economics Association of Zambia (EAZ)

KEY TAKEAWAYS

An EAZ delegation led by President Dr Edna Kabala-Litana met FNB Zambia’s team, led by Country Economist Mr Chileshe Moono, as part of the new National Executive Committee’s stakeholder engagements.
Discussions covered FNB’s support for the EAZ Post-Budget Analysis Dinner scheduled for November.
EAZ wants the relationship formalised through a memorandum of understanding (MoU) covering economic literacy, financial inclusion, research and professional development.
FNB said it was open to engagement beyond corporate membership, and both sides noted room to work together on FNB’s Quarterly SME Conferences and budget events.
The meeting follows EAZ courtesy calls on the Ministry of Finance and the Bank of Zambia, as the association builds a wider support base for its programmes.

The Economics Association of Zambia (EAZ) met FNB Zambia in Lusaka on Monday afternoon to explore a partnership that would bring the bank’s research and financial literacy work closer to the association’s public programmes. It is the latest in a series of engagements by EAZ’s new National Executive Committee, elected in September, as it introduces itself to institutions it hopes will back its plans.

The EAZ delegation was led by President Dr Edna Kabala-Litana, with National Secretary Dr John Musantu, Deputy National Secretary Ms Betty Lwando and Secretariat officer Ms Tendai Posiana. FNB Zambia was represented by Country Economist Mr Chileshe Moono, Dealer Ms Matilda Chakulimba and Macro Analyst Mr Erick Mwiinga.

EAZ and FNB Zambia officials in discussion during the meeting. (Photo: EAZ)

The Post-Budget Dinner comes first

The most immediate item on the table was FNB’s support for the EAZ Post-Budget Analysis Dinner in November. The dinner is the association’s main platform for unpacking the national budget with economists, business leaders and policymakers after the Finance Minister’s address. This year’s event will carry extra weight. The 2027 budget is the first of President Hakainde Hichilema’s second term, and Cabinet has already set its priorities around growth, jobs and tax compliance, as we reported last month.

Events of this kind depend on sponsors. A bank with its own macro research desk is a natural fit, because it brings both funding and analysts who already track the numbers the dinner will debate.

What EAZ is asking for

Dr Kabala-Litana told the FNB team that EAZ is looking for strong partnerships with institutions such as FNB as it prepares to roll out Economic Fairs, Public Discussion Forums and a Mentorship Programme. She said FNB’s work in financial literacy, financial inclusion, internships, research-based advocacy and professional development fits EAZ’s objectives and the wider Grow Zambia Agenda.

She also proposed that the two institutions sign an MoU to put long-term cooperation on a formal footing. EAZ has made the same request elsewhere. It asked the Ministry of Finance and National Planning for a formal partnership during a courtesy call on Minister Situmbeko Musokotwane last month, and pledged closer research and policy ties with the central bank during a visit to the Bank of Zambia last week.

Members of the EAZ delegation make their case to FNB Zambia. (Photo: EAZ)

FNB’s response

Mr Moono welcomed deeper engagement with EAZ beyond the bank’s corporate membership. He expressed support for joint work on the Post-Budget Analysis Programme, research and knowledge-sharing platforms. The meeting also identified openings for EAZ to take part in FNB’s Quarterly SME Conferences, its budget events and other economic dialogue platforms the bank runs.

Why it matters

Professional associations in Zambia often struggle to fund public education work from membership fees alone. Linking EAZ’s forums to a bank’s existing SME and budget events could give economists a wider audience, while giving FNB access to an independent network of researchers and commentators.

The financial inclusion angle is concrete. Many small businesses still struggle to access affordable credit, a gap we examined in The SME Credit Gap. Economic literacy programmes that explain how loans, interest rates and the budget affect households and firms are one practical way to close part of that gap.

For EAZ, the engagements are also a test of the new leadership. Dr Kabala-Litana was elected after a close vote in Livingstone in September, and the first months will show whether the association can turn courtesy calls into signed agreements and funded programmes.

What to watch

Whether EAZ and FNB sign an MoU, and what commitments it contains on research, internships and financial literacy.
Confirmation of sponsors and the date for the November Post-Budget Analysis Dinner.
The launch dates for EAZ’s Economic Fairs, Public Discussion Forums and Mentorship Programme.
Further meetings with commercial banks, insurers and other private sector bodies.

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Zambia’s New 20-Year Government Bond: A Deeper Capital Market Test

The Zambian Economist — Mon, 05 Oct 2026 06:44:21 +0000

The Bank of Zambia’s new 20-year benchmark bond lengthens the yield curve and gives pension funds a long-dated home for their money. The first auction on 20 November will show what that length costs the Treasury, and the harder question is what the money will be used for.

By Kelvin Chisanga

KEY TAKEAWAYS

The Bank of Zambia has introduced a 20-year Government bond, the longest tenor yet offered on the domestic market, beyond the 15-year bond.
The Q4 2026 programme provides for K2.2 billion in Treasury bills and K6.3 billion in Government bonds, with bond auctions on 20 November and 18 December.
A 20-year benchmark gives pension funds, insurers and other institutional investors a closer match for long-term liabilities, and could ease the refinancing pressure that comes with heavy short-term borrowing.
Over two decades, investors must price inflation, interest-rate, currency and sovereign risk. The yield cleared at the first auction will set the cost of this borrowing and the tone for secondary-market trading.
The real test is whether the long-term savings raised finance production, infrastructure, exports and jobs that can generate the revenue needed to repay the debt.

What is Zambia’s 20-year Government bond?

It is a new benchmark Government security that matures 20 years after issue, the longest-dated instrument now available on Zambia’s domestic debt market. The Bank of Zambia announced it on 1 October 2026 as part of the fourth-quarter issuance programme.

The introduction of Zambia’s 20-year Government bond is a significant development for the capital market.

What the Q4 2026 programme contains

The Q4 2026 programme provides for K2.2 billion in Treasury bills and K6.3 billion in Government bonds, with bond auctions scheduled for 20 November and 18 December.

Instrument	Q4 2026 offer	Auction dates
Treasury bills	K2.2 billion	Fortnightly: 1, 15 and 29 October; 12 and 26 November; 10 and 24 December
Government bonds (including the new 20-year)	K6.3 billion	20 November and 18 December

Source: Bank of Zambia Q4 2026 auction programme, announced 1 October 2026.

Why a longer yield curve matters

Economically, the 20-year benchmark extends Zambia’s yield curve and creates a longer-term reference for pricing capital.

It also gives pension funds, insurers and other institutional investors more options to match long-term liabilities. A pension fund that owes members retirement income in 2046 can now hold a Government asset that matures around the same time.

It could also reduce the refinancing pressure associated with excessive reliance on short-term borrowing.

What yield will investors demand?

However, the critical question is the yield investors will demand. Over 20 years, investors must price inflation, interest-rate, currency and sovereign risks.

The first auction will therefore be important not only for demand, but also for the cost of Government borrowing and subsequent secondary-market liquidity.

The bigger opportunity: long-term savings for productive investment

The bigger opportunity is to mobilise long-term domestic savings into productive investment.

Ultimately, the question is not simply whether Zambia can borrow for 20 years, but whether that capital can help finance production, infrastructure, exports and jobs capable of generating the revenues required to service the debt sustainably.

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Zambia Bought Back $1.36 Billion of Debt Three Decades Early. Here’s Why.

Tue, 22 Sep 2026 16:35:40 +0000

A bond buyback most Zambians never heard about is reshaping how banks read the country’s finances, and it says as much about copper as it does about debt.

When ABSA Bank Zambia’s Managing Director, Mizinga Melu, sat down with Finance and National Planning Minister Situmbeko Musokotwane in Lusaka this week, she did not lead with growth forecasts. She led with a debt transaction most Zambians never noticed.

In the second quarter of this year, government repurchased close to $1.36 billion in Fixed Rate Step-Up Amortizing Notes due in 2053, nearly three decades before they were due to mature. The buyback was financed with $600 million from the African Development Bank alongside government’s own resources.

ABSA Bank Zambia Managing Director Mizinga Melu with senior executives Brian Kalero, Margaret Kanja and Mato Siamabale during the courtesy call. Photo: Ministry of Finance and National Planning.

“I think that was unprecedented. People did not see that coming,” Melu told the Minister, describing the move as the kind of financial innovation the market is now watching for from Zambia.

Paying off long-dated debt early reduces the interest a government pays over the life of that debt and removes a future liability from the books before it grows. For a country that spent the past several years restructuring debt with creditors, retiring bonds voluntarily and ahead of schedule is a different kind of signal, one of capacity rather than distress. Government has described the transaction as marking a shift from debt restructuring to what it calls proactive debt management.

Musokotwane, responding to Melu’s remarks, said positive sentiment from institutions such as ABSA needs to be converted into “increased capital facilitation transactions, investment, production, exports and jobs,” and that government would maintain policy stability and fiscal discipline to give investors more certainty over their capital.

Finance and National Planning Minister Situmbeko Musokotwane, with Ministry Director for Human Resource and Administration Nalituba Mwale, receiving ABSA Zambia. Photo: Ministry of Finance and National Planning.

The debt story sits alongside a production story. Melu pointed to copper, where government has set a target of three million tonnes of annual production. That target drew scepticism when it was first announced. She said expectations of reaching about one million tonnes this cycle now look achievable, a milestone she called an important step toward the longer-term goal.

None of this changes a household’s budget overnight. But debt service already competes with health, education and infrastructure spending in the national budget every year. A lighter long-term interest bill, if government keeps to the discipline it has signalled, is one of the few economic developments that widens room for that spending without new taxes or new borrowing.

Melu’s comments describe sentiment among ABSA’s own corporate customers, not an independent measure of business confidence, and the copper milestone she referenced remains a projection rather than a confirmed production figure. Both will be tested in the numbers government and mining companies report in the coming quarters.

ABSA used the meeting to also highlight its community investments, including the ABSA Marathon, now in its eighth year and grown from under 1,000 participants to more than 11,500 registered runners.

Zambia’s K12.1 Billion Grant Shortfall Is a Fiscal Warning, Chisanga Says

The Zambian Economist — Sat, 19 Sep 2026 17:32:47 +0000

Zambian kwacha banknotes. Grant receipts came in 67 percent below target in the first quarter of 2026, tightening the screws on a K253.1 billion budget. Photo: Images of Money via Wikimedia Commons, CC BY 2.0.

KEY TAKEAWAYS

The 2026 Budget projected K12.1 billion in grants, but first-quarter grant receipts were reportedly 67 percent below target.
Grants finance programmes in health, education and social protection, so shortfalls force delays, reprioritisation, higher domestic revenue effort or more borrowing.
The core problem is budget predictability: a K253.1 billion budget cannot rest on external financing that arrives late or not at all.
Analyst Kelvin Chisanga argues the answer is not chasing more grants but building domestic capacity to generate taxes, exports, investment and jobs.
The piece connects to the stabilisation-to-productive-economics shift the Treasury has made its second-term theme.

Zambia’s grant performance in 2026 is a fiscal warning: the budget projected K12.1 billion in grants, yet first-quarter receipts were reportedly 67 percent below target. The gap matters because grants are not spare change in the Zambian budget. They finance development programmes in health, education and social protection, sectors where a delayed disbursement means a clinic waits, a school programme stalls or a social cash transfer slips.

By The Zambian Economist Analyst | Analysis by Kelvin Chisanga | Lusaka | 19 September 2026

Why the shortfall bites

The problem, as Chisanga frames it, is not simply that donors are providing less. It is budget predictability. When expected external resources fail to arrive on schedule, government faces four unattractive options: delay programmes, reprioritise expenditure, squeeze harder on domestic revenue mobilisation, or borrow more. Each option carries its own cost, and none is free.

A K253.1 billion national budget cannot sustainably depend on external financing whose timing and volume sit outside Lusaka’s control. That is the structural point behind the quarterly numbers. A budget built on uncertain grants is a budget that plans in pencil.

The domestic alternative

Chisanga’s argument is that Zambia must increasingly finance development through its own productive capacity. The list of engines is familiar: mining value chains, agriculture, manufacturing, tourism, energy, ICT and exports, alongside a stronger formal private sector and a broader tax base.

This is where the fiscal argument meets the trade argument. Zambia enters the second half of 2026 with a K30.1 billion trade surplus built on K194.7 billion of exports, but with an export basket still dominated by raw copper. A surplus earned on unprocessed commodities is revenue that world prices can take away. Value addition, in minerals and in agriculture, is what converts a good quarter into a durable revenue base.

The revenue side of that agenda is already in motion. The 2027 to 2031 medium-term revenue strategy and the consultation behind taxing the economy better rather than more both start from the premise Chisanga ends on: broaden the base by growing the formal, productive economy.

The shift worth watching

There is a echo here of the message Finance Minister Situmbeko Musokotwane has been repeating since his reappointment, that Zambia is moving from stabilisation to growth. Fiscal self-reliance is the next chapter of the same story. Stabilisation bought Zambia credibility with creditors and partners. The productive phase is supposed to buy independence from them.

Chisanga puts the objective plainly. The goal should not be to secure more grants. The goal is an economy capable of generating more taxes, exports, investment and jobs at home, so that a missed disbursement from a partner is an inconvenience rather than a crisis.

What this means for you

For programme beneficiaries: social protection, health and education budgets are the first to feel a grant shortfall. Watch the mid-year budget review for reallocations.

For taxpayers: if grants stay below target, the difference is made up by you, through higher revenue effort or borrowing that future budgets must service.

For businesses: the push for domestic revenue means the formalisation agenda will intensify. Firms already in the tax net should expect sharper scrutiny; firms outside it should expect invitations to join.

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Dangote’s IPO Is Changing Africa’s Capital-Market Conversation, And Zambia Should Be Part of It

The Zambian Economist — Tue, 15 Sep 2026 13:55:25 +0000

By Kelvin Chisanga

Key takeaways

Dangote Refinery’s IPO opened on the Nigerian Exchange on 14 September 2026, offering 4.1 billion new shares at N525 each to raise about N2.15 trillion, roughly $1.6 billion, Africa’s largest ever public share sale.
The offer values the refinery near $49 billion and is expected to result in a Nigerian Exchange listing in November, once subscription closes on 13 October.
Kelvin Chisanga’s argument: Africa’s constraint is not simply a shortage of capital, but a shortage of investable productive assets that can be converted into shares.
For Zambia, the question is not how many companies list on the Lusaka Securities Exchange, but which large productive assets, in energy, copper processing, agriculture, logistics, manufacturing, tourism and infrastructure, could be built to the point where they are investable.
The real measure of a capital market, he argues, is how much new productive capacity it finances, not how much money simply changes hands.

Nigeria’s Dangote Refinery opened Africa’s largest ever share sale this week, offering investors a direct stake in a productive industrial asset rather than another government bond. For Zambia, the lesson is not about matching Nigeria’s stock exchange. It is about building the kind of asset worth listing in the first place.

Africa’s largest ever share sale

The Dangote Refinery listing is more than a major corporate transaction; it is a powerful statement about Africa’s capacity to finance its own industrialisation.

The IPO, offering 4.1 billion new shares at N525 each between 14 September and 13 October, aims to raise about N2.15 trillion, roughly $1.6 billion, representing Africa’s largest ever public share offering. It values the refinery near $49 billion, with a Nigerian Exchange listing expected in November.

More importantly, it brings a massive productive industrial asset into the public capital market and gives Nigerian investors an opportunity to participate directly in its future growth.

A different pathway to development finance

The bigger economic lesson is this: Africa does not only need more capital; it needs more investable productive assets.

For years, African governments have depended heavily on borrowing to finance development.

Dangote clearly demonstrates another pathway: build productive capacity, create value, generate cash flows and eventually mobilise domestic and international capital through the capital market.

What this means for Zambia

For Zambia, this should trigger serious reflection. Our ambition should not simply be to have more companies listed on the Lusaka Securities Exchange. We should be asking: what large productive assets can Zambia develop that can eventually be listed and owned by Zambians, pension funds and international investors?

Energy, copper processing, agriculture, logistics, manufacturing, tourism and infrastructure can all become investable sectors if projects are properly structured, commercially viable and governed transparently.

From financial stabilisation to productive economics

The Dangote story therefore fits directly into Africa’s next economic phase: moving from financial stabilisation to productive economics.

The real strength of a capital market is not merely how much money it trades. It is how much new productive capacity it helps finance. Africa must increasingly build assets that are capable of building wealth.

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Zambia’s AML Dialogue Draws International Delegates as Officials Set Three Priorities

The Zambian Economist — Fri, 11 Sep 2026 09:06:06 +0000

Delegates from four countries and the European Union joined Zambian officials in Chilanga this week for a two-day dialogue on financial crime, as Attorney General Mulilo Kabesha set out three specific priorities for the country’s new public-private partnership against money laundering.

By The Zambian Economist Analyst

KEY TAKEAWAYS

Zambia’s two-day Public-Private Sector Dialogue on financial crime, held at Sandy’s Creations in Chilanga, drew delegates from Liberia, Zimbabwe, South Africa, the United States and the European Union alongside Zambian stakeholders.
Attorney General Mulilo Kabesha named three priorities for the new AML/CFT/CPF partnership: faster information sharing, converting information into actionable intelligence, and coordinated action to protect the economy and mineral wealth.
Accountant General Nsandi Manza linked the initiative to the Grow Zambia Agenda, saying illicit financial flows reduce the resources available for development.
Financial Intelligence Centre Director General Clement Kapalu said mining sector financial flows and supply chains are vulnerable to corruption, fraud, tax evasion, smuggling and money laundering.
The dialogue follows this week’s launch of the partnership itself and builds on Zambia’s recent upgrade to compliant or largely compliant status on 38 of 40 Financial Action Task Force recommendations.

Delegates compare notes on a shared problem

Zambia’s Public-Private Sector Dialogue on Anti-Money Laundering, Countering the Financing of Terrorism and Counter-Proliferation Financing (AML/CFT/CPF) ran for two days at Sandy’s Creations in Chilanga, bringing together government agencies, banks, mining companies and other private-sector players from across Zambia. International delegates from Liberia, Zimbabwe, South Africa, the United States and the European Union joined the sessions to share how their own jurisdictions handle similar risks.

Financial crime rarely stays inside one country’s borders. A launderer moving proceeds through a Zambian bank account, a regional trading company or a cross-border property deal can just as easily be operating out of Harare or Johannesburg, which is part of why the dialogue was built around comparing practical approaches rather than presenting a single national plan.

Three priorities, stated plainly

Attorney General and Anti-Money Laundering Authority Chairperson Mulilo Kabesha used his address to narrow the partnership’s mandate to three tasks: stronger and faster information sharing, converting that information into actionable intelligence, and coordinated action to protect Zambia’s economy and mineral wealth from criminal exploitation.

Kabesha described financial crime as, in large part, a battle for information. Banks, professional service providers, regulators, civil society, law enforcement agencies, prosecutors, the judiciary and businesses each hold a different piece of the picture, and no single institution sees the whole chain. He urged participants to make sure the dialogue produced practical, measurable results rather than a further round of talks.

He also called on businesses to treat AML/CFT/CPF compliance as an investment in the economy’s long-term integrity rather than a regulatory box to tick, and asked regulators to keep supervision risk-based and proportionate to the size and nature of the institutions they oversee.

Manza: illicit flows work against the Grow Zambia Agenda

Ministry of Finance and National Planning Accountant General Nsandi Manza, who chairs the National AML/CFT/CPF Task Force, told the dialogue that the partnership supports the Grow Zambia Agenda, which places prudent financial management, domestic resource mobilisation, investment and job creation at the centre of the government’s economic plan.

Illicit financial flows cut into the money available for development and work against sustainable, inclusive growth, Manza said, which is why tackling them needs coordinated action rather than separate efforts by government and business. She described the private sector’s role as identifying and reporting suspicious transactions, with government responsible for the policy, regulatory, supervisory, intelligence and enforcement frameworks around that reporting. She said the forum should move past discussion toward concrete information sharing, capacity building, joint initiatives and practical solutions.

FIC: mining supply chains are the exposed link

Financial Intelligence Centre Director General Clement Kapalu said the launch marks an important step in strengthening Zambia’s AML/CFT/CPF framework, and pointed specifically to mining sector financial flows and supply chains as vulnerable to corruption, fraud, tax evasion, smuggling and money laundering.

That vulnerability is what makes the dialogue’s exchange of information on emerging risks, typologies and trends more than an academic exercise. Kapalu said the partnership’s success will ultimately depend on whether participating institutions can turn information into intelligence, and intelligence into action, echoing Kabesha’s own framing of the challenge.

Why the mineral link matters beyond the conference room

Zambia’s push to expand copper output and position itself in minerals used for electric vehicles and renewable energy also expands the value moving through the accounts, contracts and shipments that financial criminals target. Revenue lost to laundering, tax evasion or smuggling in that chain is revenue that does not reach the treasury, and by extension does not fund public services or the infrastructure the Grow Zambia Agenda is meant to finance.

For banks, auditors, commodity traders and logistics firms operating in the mineral value chain, the priorities set out this week point toward closer reporting obligations and faster cooperation with the Financial Intelligence Centre. For investors weighing Zambia’s mining sector, a functioning AML/CFT/CPF framework is also a governance signal: it speaks to whether the institutions around the resource, not just the resource itself, can be relied on.

What happens next

Kabesha’s call for practical and measurable results sets a bar the partnership will be judged against once the delegates have gone home. International experience-sharing is only useful if it changes how quickly a Zambian bank flags a suspicious transaction, how fast the Financial Intelligence Centre can act on it, and whether a resulting case reaches court. Zambia’s improved standing with the Financial Action Task Force gives the partnership a credible starting point, but Kapalu’s own measure, information turned into intelligence and intelligence turned into action, is the one that will determine whether this week’s dialogue changes outcomes or simply adds to the record of meetings held.