Investors are cheering the landslide victory of Zambian opposition leader Hakainde Hichilema who edged incumbent President Edgar Lungu in the August 12 presidential election and that has sent the southern African nation’s Eurobonds and currency higher.
Hichilema beat incumbent President Edgar Lungu by almost 1 million votes, the biggest margin of victory in 25 years, and nearly 60 percent support in a race that had been expected to be closely contested.
After Lungu conceded defeat early on Monday, Zambia’s $1 billion of Eurobonds due in 2024 jumped 8.3 percent to 72.55 cents on the dollar by 9:30 a.m. in London, the biggest gain since June 2020. The country’s currency, the kwacha, surged 7.7 percent to 19.3150 per dollar, the most since November 2015, according to Bloomberg data.
The margin of victory provides Hichilema with a strong mandate to take on reforms needed to revive an economy crippled 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.
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Hichilema, 59, said he plans to seal a bailout from the International Monetary Fund (IMF) as soon as is technically possible and initiate debt-restructuring talks.
The businessman and cattle rancher plans to achieve an economic growth rate of more than 10 percent within five years, mainly by growing the mining, agriculture, construction and manufacturing industries.
Hichilema has an economics degree as well as an MBA from the University of Birmingham in the UK. He unsuccessfully contested the nation’s previous five presidential elections, and was jailed for four months on treason charges in 2017 after his convoy of vehicles refused to make way for Lungu’s.
Lungu, who won power in 2015, said at the weekend the election was tainted because of violence in three provinces where Hichilema performed the best and was yet to concede defeat until Monday.
