Zambia’s Post-election rally economically sound

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By Kelvin Chisanga

Zambia could enter a strong post-election confidence rally, but the sustainability of that rally will depend on what happens after the ballots are fully counted.

The immediate economic benefit of a credible, peaceful and orderly electoral outcome is the reduction of political uncertainty and the risk premium attached to investment decisions.

Investors who adopted a wait-and-see approach can begin unlocking capital for mining, agriculture, energy, manufacturing, construction, tourism and ICT.

Financial markets could also respond positively through improved demand for government securities, stronger business confidence and greater stability in the Kwacha.

The recent reduction seen in the Bank of Zambia’s statutory reserve requirement from 26% to 21% provides an additional layer of credit opportunity.

If banks channel the released liquidity into productive lending, SMEs, agriculture and private investment, the post-election period could stimulate a broader credit cycle.

However, an election victory alone cannot create sustainable growth. The real test will be policy continuity, fiscal discipline, debt management, energy security, mining investment and economic diversification.

My view is that Zambia’s biggest post-election opportunity is to convert political certainty into economic certainty, economic certainty into investment and investment into jobs, productivity and inclusive growth.