The Policy on Allowing Foreign Participation in the Bond Market Incoherent-Dean Onyambu
“This ranks among the most incoherent decisions the Bank of Zambia has issued in recent memory. In a single move, the central bank has fractured its own credibility and invited political interference into what should remain a technical domain.”
“The signal to ordinary Zambians who hold no assets is unmistakable: you are not a priority.”
“What compounds the damage is the chorus of voices celebrating this decision as though it carries any structural logic. Does Zambia really need more cheerleaders for poor policy?”
Dean Onyambu, who is a commentator and researcher specializing in macroeconomics and African financial systems.
In January 2026, the Bank of Zambia significantly eased restrictions on foreign participation by raising the cap on non-resident ownership of government securities from 5% to 23%. This policy shift was primarily designed to manage a “refinancing wall” of approximately $1.16 billion in debt payments due to foreign holders in 2026, allowing overseas investors to reinvest maturing holdings back into the local market
Ce la vie…the french say….
Its what it is….really dont see what the problem is.
Long term…oversubscription implies a heathy appetite for Zambian debt. This will in turn mean the next auction at the government through BOZ will offer the bonds at a lower interest rate.
Lowering the cost of borrowing; a reflection of the market force at work and less interest payout to the said foriegn bond buyers and institutional borrowers….commercial banks, pension funds etc…
The said institutional borowers will then be forced to lower their lending rates to invest their funds (instead of the funds sitting idol). This is what we need for our SMEs and local investors to borrow from the banks. This is one way the lending rate will come down.
Also Strengthen the local credit rating agency so that banks are forced to use this tool to measure firms’ and individuals’ credit worthiness. Banks mirco lendersCEEC and CDF have a narrow lending market. To imped people we have high lending rates. A padded measure of the risks banks take on due to default risk.
If creditworthness is measured by the local Credit rating agency. This will measure ones ability to get loans and a practice widely used globally. While this is not the end all. It will help people understand that loans and not paying them has consequences….Financial literacy alone is not working. Credit grows the economy.