Zambia's Hichilema Re-election Offers Continuity, But Growth Is the Next Test
Hichilema's re-election gives Zambia policy continuity. Investors now watch for a new IMF deal and faster growth.
Zambian President Hakainde Hichilema's re-election has given investors the policy continuity they were hoping for, but attention is already shifting to whether his second term can convert economic stabilisation into durable growth.
Early results from the election commission showed Hichilema securing roughly 60% of valid votes, against 38% for his main rival, Brian Mundubile. The outcome removes near-term political uncertainty for a country that has spent years navigating the aftermath of its 2020 sovereign default — the first by an African nation during the COVID-19 pandemic.
Hichilema's first term was largely consumed by a lengthy debt restructuring and reforms backed by the International Monetary Fund (IMF). At the same time, drought, power shortages, and a weak currency tested the recovery. Investors now want to see those stabilisation gains translated into faster growth and higher investment.
"For investors, Hichilema offers continuity," said Stuart Culverhouse, chief economist at Tellimer. The challenge, he noted, will be building on macroeconomic stability and lower inflation while accelerating growth. The government has already indicated it will seek a new IMF programme, which could serve as an early benchmark for investor confidence.
Zambia's sole international bond, the 2033 dollar note, was bid at 97.72 cents on the dollar on Tuesday, broadly unchanged despite weaker sentiment across African debt markets.
New IMF Programme in Focus
Zambia aims to secure a fresh IMF programme by the end of the year, after its previous $1.7 billion arrangement expired in January. Finance Minister Situmbeko Musokotwane said before the election that new investment is needed to drive growth and create jobs, but added that it is still too early for Zambia to return to international bond markets.
Some investors see a future Eurobond issuance as a positive step. Philip Fielding, portfolio manager at Fidelity International, said re-entering international markets would give local companies a benchmark for pricing debt and help build out a yield curve, offering investors more choice.
Jetro Siekkinen of LGT Capital Partners, which holds domestic Zambian government bonds, praised the country's economic performance and reform record under Hichilema, particularly on debt, fiscal discipline, and the mining tax regime. He said investors are now watching whether the central bank maintains its independence and whether fiscal policy stays disciplined as the government shifts focus toward infrastructure spending.
Copper Ambitions and Weather Risks
Zambia, Africa's second-largest copper producer, is targeting annual output of 3 million metric tons — nearly triple current levels — to capitalise on rising demand for the metal in power grids and construction.
However, Thomas Christiansen of UBP warned that the El Niño weather phenomenon poses a risk to copper production. Three years ago, drought severely cut hydropower output, leading to rolling blackouts and a notable decline in copper output. Scientists say the current El Niño is intensifying, with a greater than 90% chance of becoming a strong event — a reminder that Zambia's growth ambitions remain vulnerable to climate shocks.