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IFC Considers the Launch of A Local Currency Bond In Zambia
Zambia elected a new government on September 20, 2011. Three months later, Jingdong Hua, IFC VP for Treasury and Information Technology, visited the country to understand development priorities for the new government and to explore local currency financing options. Hua discussed the potential launch of an IFC local currency bond and heard the government and the donor community’s request for a second investment climate program.In the last 10 years, Zambia has seen a robust economic growth, but the economy still relies mostly on mining and the poverty rate remains above 65 percent. During his visit, Hua noted the country’s potential.
“Zambia holds tremendous opportunity for investment and development impact, including the entire value chain of agribusiness, infra and hydro power, tourism, mining, health care, and micro and SME financing,” Hua said during his two-day visit to Lusaka in early December 2011.
During his visit Hua met key Zambian stakeholders. With the Central Bank and the Ministry of Finance Hua discussed the lack of long-term financing solutions in the country and the possibility of a local currency bond initiative to support private sector development.
“I see very promising prospects in a Kwacha bond, in swaps, for the Liquidity Enhanced Asset Program, and risk sharing facilities,” Hua said. Dr Ng’andu, acting Government of the Central Bank and Alexander Chikwanda, the Minister of Finance, expressed their support for the idea.
With donor partners, Hua discussed how to support the economy’s diversification away from mining. While donor interventions currently focus on agriculture, health, tourism, and infrastructure, donor partners are supportive of IFC’s investment climate program which is helping business creation and growth.
Hua took a tour of the new one-stop shop for business, located in the Zambia Development Agency, which hosts the business license e-registry, allowing companies to register online.
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