Key facts
- Zambia launched a tender offer to buy back $1.36 billion of its debt.
- Bondholders of Zambian dollar bonds maturing in 2053 are opposing the buyback offer.
- Zambia will negotiate with bondholders after the buyback attempt was blocked.
- Zambia's fiscal deficit was ZMW 16.9 billion, or 1.83% of GDP, in the first quarter.
- Zambia's current account swung to a surplus of USD 396.4 million in Q1 2026.
- The current account surplus was driven by strong copper exports and goods shipments.
- Egypt's budget deficit reached EGP 1.12 trillion, 5.3% of GDP, in July-April.
- Chile is seeking an additional $6.2 billion in borrowing authority.
- Morocco's trade deficit widened 18.4% to MAD 127.0 billion in January-April.
- Kenya's fiscal deficit is projected to reach 6.3% of GDP for the full fiscal year.
- South Africa's main budget deficit was 0.8% of GDP in April.
- Angola's GDP grew 5.3% year-on-year in Q1.
Zambia has initiated a tender offer to repurchase $1.36 billion of its debt as part of its broader financial restructuring efforts. This move is intended to alleviate the nation's debt burden. However, the offer has encountered opposition from a group of bondholders whose Zambian dollar bonds mature in 2053. These bondholders contend that the tender offer was presented without prior negotiation and could negatively impact investor interests. Consequently, Zambia has stated its intention to engage in negotiations with these bondholders following the blockage of its buyback attempt. This negotiation is a component of the country's ongoing debt restructuring process, particularly as it sought to buy back the bond before a scheduled coupon increase.
In parallel, Zambia's fiscal performance in the first quarter revealed a deficit of ZMW 16.9 billion, equivalent to 1.83% of its Gross Domestic Product (GDP). This deficit arose from revenue and grants falling below projections, with Value Added Tax (VAT) collections being particularly weak. Simultaneously, expenditure on transfers and subsidies remained high. The domestic financing for this deficit has already accounted for 79.2% of the annual target. Despite these fiscal challenges, Zambia's current account experienced a significant turnaround, shifting to a surplus of USD 396.4 million in the first quarter of 2026. This contrasts with a deficit of USD 278.6 million in the same period of 2025. The improvement is largely attributed to a substantial increase in the goods balance, propelled by robust copper exports and stronger overall goods shipments. The services deficit also narrowed, supported by an increase in travel credits.
These developments in Zambia's debt management and fiscal accounts occur amidst broader economic trends in other African nations. Egypt's budget deficit widened to EGP 1.12 trillion (5.3% of GDP) in July-April, despite increased revenues, due to a surge in interest payments. Chile is seeking an additional $6.2 billion in borrowing authority as its deficit and debt forecasts are revised upward, with debt-to-GDP projected to exceed 45.0% in 2028. Morocco's trade deficit expanded by 18.4% to MAD 127.0 billion in January-April, as imports outpaced exports. Kenya's fiscal deficit is now projected to reach 6.3% of GDP for the full fiscal year, exceeding its quarterly target due to revenue underperformance and increased spending. South Africa's main budget deficit remained stable at 0.8% of GDP in April, with revenue increases offset by fuel levy relief. Angola's GDP grew by 5.3% year-on-year in Q1, driven by the services sector and a less severe contraction in oil output. Mozambique's private sector credit saw a modest 2.7% growth in March.