Zambia’s Bond Market, Mistaking Foreign Participation for Investor Confidence- Amb Emmanuel Mwamba

By Amb. EMMANUEL MWAMBA

Zambia’s Bond Market, Mistaking Foreign Participation for Investor Confidence

Zambia is losing $3.5billion in illicit financial flows every year.

Its copper earnings report to offshore accounts and tax havens in British Virgin Islanda and Cayman Islands.

Recwntly Government allowed foreign participation in the GRZ Bond Market.

In January 2026, the Bank of Zambia significantly increased the cap on non-resident participation in local government bond auctions to 23%, up from 5%, to ease refinancing pressure from upcoming debt maturities and boost liquidity.

This, along with a January 2024 switch to par-value, market-driven coupon pricing, has led to increased foreign investment in Zambian securities.

Over K21.3 billion (more than US$1 billion equivalent) just flooded into GRZ bonds, smashing a K4.2 billion target and delivering the largest auction demand in Zambia’s history, according to results issued by Bank of Zambia for the Government of the Republic of Zambia.

February didn’t just beat January, it obliterated it. January attracted K10.1 billion in bids. February doubled that to K21.3 billion. While headline yields eased across major tenors (notably the 10-year from 17.19% to 16.60% and the 15-year from 18.79% to 17.59%), the weighted average yield actually moved from ~16.58% in January to ~16.83% in February, driven by massive allocations into longer-dated paper.

WHERE IS THIS FOREIGN PARTICIPATION

The Central Bank should profile who these foreign entity. For example the large economy is owned by foreign nationals(Canadians, Australians, Asians and USA) and the small economy(shops in township and wholesalers) is also owned by regional foreigners(Burundese, Rwandese and Somalians).

Following the introduction of foreign participation in the bond market,  we see the surge in the bond market, which foreigners are participating?