Zambia’s business activity rebounds to 4-month high…

Business activity in Africa’s second largest copper producer Zambia, rebounded to a (4) month high in the month of April, as the negative impacts of the cholera epidemic fade out completely. Zambia started the year on a bumpy note with a disease epidemic that resulted in business disruption costing the Southern African nation millions of Kwacha in forgone business and taxes. Zambia recorded a headline 51.2 purchasing managers index (PMI) from 50.7 in March after having taken a plunge in February at 47.1 ( below 50 signalling economic contraction.). The rebound nonetheless observed in April was attributed to new business that grew at a solid pace resulting in higher purchasing activities and stable employment according to the Markit Economics report released on 05 May. PMIs of above 50 signal rise in business pulse while those below signal contractionary business activity levels.

“An increase in new orders supported a second consecutive month of overall growth. Despite the rate of expansion easing from March, it remained solid and above the series average so far,” Victor Chileshe, Head of Global Markets at Stanbic

Business pulse effects were noted from depreciated currency effects that saw the Kwacha post losses as the local unit pierced the ZMW10/USD psychological levels to ZMW10.05/USD. The Kwacha has however reversed losses as players prepare for mid-month mining tax obligations. Copper remains fairly healthy at USD6,810/mt on the London Metal Exchange spelling positive prospects for Zambia’s 2018 growth especially with a higher copper production target of a 1mn metric tons.