Zambia: Economic test looms for next administration [Business Africa]

Zambia: Economic test looms for next administration

Zambia has managed to stabilize its economy after becoming the first sovereign to default on its debt obligations during the Covid-19 pandemic.

It has since negotiated restructuring deals with the majority of its creditors and successfully concluded a $1.7 billion funding program with the International Monetary Fund (IMF).

The economy is projected to expand 5% in 2026, driven by investment in copper mining and a bumper maize harvest.

But risks remain.

Several private commercial lenders are yet to give the country debt treatment, keeping Zambia’s borrowing costs high. Fuel price rises linked to the Iran war have jolted the central bank’s efforts to rein in inflation and a potential drought next year could stifle power generation.

Mutisunge Zulu, the chief risk officer at ZANACO joins the show with analysis on tough policy choices awaiting the next administration in order to unlock job-creating growth, as the copper producer prepares to vote on August 13.

Liberia bans export of unprocessed rubber

Rubber provides a livelihood for thousands of families in Liberia, but its profits largely elude producers.

With the raw material exported instead of being used for manufacturing locally, the country still depends on imported tires, often second-hand.

Liberia’s conundrum is a familiar case in Africa, where countries ship out resources while surrendering control of the most important parts of the value chain.

Energy: Red Sea blockade threatens Saudi crude exports

The crisis in the Gulf could be about to shutter another critical shipping waterway for energy supplies – the Bab el Mandeb strait.

The Houthis who rule half of Yemen have announced a blockade on oil exports by Saudi Arabia.

With the Strait of Hormuz effectively closed, shutting down Bab al-Mandeb as well could block 25% of the world’s oil and gas supply.