The Zambian kwacha gained 1.4 percent on Wednesday as its presidential by-election continues under peaceful circumstances. The winner of the election will see out the remaining 18 months of late President Michael Sata’s five-year term.
The currency which endured a torrid 2014 after it was hit with falling prices of copper and a tax crisis gained against the dollar following peaceful conduct of the presidential election, a sign of investor confidence.
Kwacha may gain more
Zambia is Africa’s second largest producer of copper. The red metal also accounts for 70 percent of export earnings. Zambia has been badly hit by the fall in copper prices. The important mining industry has also been affected by hike in mining royalties and the withholding of $600 million in VAT refunds owed to mining companies by the government. Investors are hoping a new government will address these issues and set the industry back on track. Thus, the relative peace recorded so far has been significant for the Kwacha. The currency may gain even more if United Party for National Development (UPND) leader Hakainde Hichilema wins, as settling tax issues has been one of the talking points of his campaign. The frontrunner and candidate of the ruling Patriotic Front, Edgar Lungu has however promised to also review the tax hikes. Increasing investor confidence is therefore expected to further strengthen the Kwacha.
Polls extended
Zambia extended its presidential by-election till Wednesday as torrential rain affected voting in about 51 stations where polling booths could not open as a result of the rain.
The announcement of the final results earlier scheduled for January 23 may now be extended by a day or two, according to election director, Priscilla Isaacs.
Although the Electoral Commission of Zambia said it was still updating results when its official website was consulted, results started to trickle in on Wednesday from parts where voting took place on Tuesday. Lungu is said to be leading three out of the four first counts out of the 150 constituencies. Hichilema was however leading in one.
