Zambia Gets Record $277 Million Yearly Central Bank Dividend

Zambia, which last year became Africa’s first pandemic-era sovereign defaulter, received a 6.27 billion kwacha ($277 million) dividend payment from its central bank, partly due to gains related to the depreciation of the local currency.

The payment in April will help boost the government’s finances and will be directed toward achieving the objectives of Zambia’s economic recovery program, the finance ministry said in reply to emailed questions. It’s the biggest annual dividend yet received from the central bank, with 2.6 billion kwacha transferred last year, and 1.7 billion kwacha in 2019.

The Bank of Zambia by law pays the state its profits, which more than doubled to 6.9 billion kwacha last year, according to its annual report.

The biggest contributor to the income was increased realized foreign-exchange gains that resulted from the depreciation of the local currency. That was even as foreign-exchange reserves fell from $1.4 billion at the end of 2019 to less than $1.2 billion by December. The kwacha lost a third of its value against the dollar last year.

The payment comes at a good time for the government, which is in talks with the International Monetary Fund over an economic program and a concessional loan, and holds elections in August.

The southern African nation will probably only be able to finalize the IMF deal after the vote. A program with the fund is crucial under the Group of 20’s so-called common framework for debt restructuring that Zambia has said it will use to rework its more than $12.7 billion in external debt.

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