Africa’s most attractive short term government security – The Zambian 1-year treasury bill

AFRICA’s second largest copper producer Zambia is currently offering attractive yielding 1-year government securities for those seeking for yield. The one-year treasury bill is paying a yield of 17.5% on an inflation rate of 6.1% translating. This means investing in 1-year government or Kwacha paper will compensate investors 11.4% over and above the inflation rate. The premium is wide and very attractive especially that the currency is stable offering very little volatility for offshore players that may want to take risk in the Kwacha paper.

Demand for Kwacha treasury bills of one-year tenor has been overwhelming for over 6 months now where the yield has increased from 14.5% to 17.5%.

Treasury Bill auction results for debt sale held on 15 March 2018

In the last treasury bill auction held on 15 March the Bank of Zambia – BOZ sold the Kwacha equivalent of $USD92 million worth of treasury bills. On offer was ZMW950 million across the 3, 6, 9 and 12 month duration’s and the greatest appetite for investment was in the one-year tenor which took up 87% of the entire auction.

The next treasury bill sale is on the 29 March.

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