Imara Holdings Limited : Zambian prospects looking good, Imara tells foreign investors

Imara, the pan-African financial services group, has sent out an international update to alert foreign investors to positive developments in Zambia. The asset management and investment banking firm highlights the “vibrancy of the economy” and the growth of Zambia’s consumer economy.

Imara markets several equity investment funds focused on important markets in sub-Saharan Africa and keeps investors informed of opportunities and challenges in a wide range of jurisdictions.

In the Imara African Opportunities Fund report, fund manager John Legat notes: “Lusaka’s new and growing shopping malls are all full and the traffic remains heavy.

“There is clearly a rapid growth in the middle classes in Zambia, who now have access to credit, asset finance and mortgages – resulting in a consumer boom.

“The economy itself is likely to grow by 7% again after a relatively good agricultural season, continuing investment into new copper mines and strong consumer spending.”

Legat, who heads the asset management operations of the Imara Group and is based in neighbouring Zimbabwe, is also upbeat about prospects in the Zambia’s copper-dominated resources sector.

He says: “The investment into the copper mines will start to show in the output numbers in 2015/2016, when production could almost double to 1.4 million tonnes.

“The price of copper appears to be holding, in part due to the rising marginal cost of production in Chile, which produces 14 million tonnes, while Zambia’s costs remain low.”

Imara’s Zambia overview points out that the re-basing of Zambia’s currency, the kwacha, at the beginning of the year went smoothly “without the expected inflationary pressures or devaluation”.

Though the general situation seems positive, the reports notes one potential challenge for investors – Zambia’s stock market remains illiquid, creating difficulties for any opportunistic foreign investor looking to make a sudden market entry and exit.