Zambia’s Eurobonds gained the most in 14 months and the kwacha surged after opposition leader Hakainde Hichilema’s shock landslide victory in the nation’s presidential election.
Hichilema beat incumbent President Edgar Lungu by almost 1 million votes and nearly 60% support, the biggest margin of victory in a quarter century and an even better performance than his party projected.
The margin of victory provides Hichilema with a strong mandate to take on reforms needed to revive an economy wrecked by years of overspending that culminated in the nation becoming Africa’s first pandemic-era sovereign defaulter in November. Annual inflation is at the highest in two decades at nearly 25%, and the economy is forecast to only narrowly avoid a second consecutive contraction this year.
The president-elect will also need to reach a deal with the International Monetary Fund for a bailout, and repair relations with copper miners operating in Zambia, Africa’s second-biggest producer of the metal.
Zambia’s $1 billion of Eurobonds due in 2024 jumped 8.7% to 72.1 cents on the dollar by 10:47 a.m. in London, the biggest gain since June 2020. The kwacha surged the most since November 2015 to 19.3150 per dollar.