00:00Now, Zambia's kwacha is nearing parity with the South African rand, capping a remarkable turnaround.
00:06This is according to Citigroup. The kwacha has appreciated almost 18 percent against the dollar this year,
00:13making it the second best performing currency tracked by Bloomberg.
00:17We've got our chief Africa correspondent Jennifer Zappasaja joining us now from Johannesburg to discuss this performance.
00:25And, Jen, what has essentially sparked this turnaround in the currency?
00:32Well, Abir, it has been quite a turnaround, as you were just saying there.
00:35We have seen about a year to date almost 18 percent against the dollar this year, which is significant for
00:42the kwacha.
00:43And really what we heard from Citigroup analysts is that a lot of this is underpinned by some of the
00:48strength that we've seen from copper prices.
00:50Zambia is Africa's second largest copper producer. And so this has, as Citigroup analysts say, provided a bit of a
00:58tailwind for the kwacha.
01:00Not just that, we've also seen debt restructuring really help the country.
01:05This has been a priority for President Hichilema. And so part of that has factored into some of the strength
01:10of the kwacha.
01:12And you were mentioning the rand there, which, you know, here in South Africa, we, of course, track where the
01:18rand is in terms of its comparison to other emerging markets.
01:23And the fact that we are actually seeing it undervalued, as some Citigroup, as a Citigroup analyst put it, against
01:31the kwacha, is very interesting.
01:32But he did say that a lot of this is because last week we did see the South African Reserve
01:38Bank decide to leave benchmark rates unchanged.
01:41And so, again, a bit of strength for the kwacha and a bit of optimism, I guess you could say,
01:46for President Hichilema as he heads into the election next month.
01:51And how would this actually help him bid for the re-election next month? Like, what are the, what is
01:57he looking at?
02:00Well, you know, he's already delivered quite sizable returns or a number of economic returns and reforms that he had
02:07promised initially when he came into office.
02:10And so what we're hearing from analysts is that this is set to just, again, give him a bit of
02:15strength heading into this election.
02:17He is seeking a five-year, a second five-year term.
02:21And I mentioned what we've seen already from the stability from debt restructuring.
02:25We've seen the bonds, Zambian bonds that have returned for investors about 36%.
02:31And so just continuing to see strength from the kwacha adds to what we saw from the kwacha last year,
02:37which was 25% rally in 2025.
02:41So, again, it's stability and strength for President Hichilema.
02:45The question is, will voters vote that way and see it as such?
Comments