Zambian opposition leader Hakainde Hichilema scored a shock landslide victory in the nation’s presidential election, sending the southern African nation’s Eurobonds and currency higher.
Hichilema beat incumbent President Edgar Lungu by almost 1 million votes and nearly 60% support, the biggest margin of victory in a quarter century and an even better performance than his party projected. Lungu conceded defeat early on Monday afternoon.
The margin of victory provides Hichilema with a strong mandate to take on reforms needed to revive an economy wrecked by years of overspending that culminated in Africa’s first pandemic-era sovereign default in November. The president-elect will need to reach a deal with the International Monetary Fund for a bailout, and repair relations with copper miners operating in Zambia, Africa’s second-biggest producer of the metal.
Zambia’s $1 billion of Eurobonds due in 2024 jumped almst 10% to 73.56 cents on the dollar by 12:23 p.m. in London, the biggest gain since April 2020. The kwacha surged the most since November 2015 to 19.1525 per dollar.
“The election result clearly surprised us on the upside,” said Ray Jian, a London-based emerging-market portfolio manager at Amundi Asset Management, which has an overweight position in Zambian debt. “We intend to keep our overweight stance, and to actively participate in the upcoming restructuring of Zambian debt.”
Bailout Deal
Hichilema, 59, said he plans to seal a bailout from the IMF as soon as technically possible and initiate debt-restructuring talks. The businessman and cattle rancher is targeting an economic growth rate of more than 10% within five years, mainly by growing the mining, agriculture, construction and manufacturing industries.
Known as HH, Hichilema has an economics degree as well as an MBA from the University of Birmingham in the U.K. He unsuccessfully contested the nation’s previous five presidential elections, and was jailed for four months on treason charges in 2017 after his convoy of vehicles refused to make way for Lungu’s.
