Government bonds have continued to underperform compared to treasury bills, with the most recent GRZ bond tender number 05/2026BA registering an undersubscription. Bids totaled approximately K4.9 billion, falling short of the K6.3 billion on offer.
A review by Zambian Business Times (ZBT) found that all tenors—2, 3, 7, 10, and 15 years— were undersubscribed, a trend that has persisted for several months. According to financial experts, this subdued performance is largely attributed to the prevailing uncertainty surrounding the current election period.
Investors are reportedly hesitant to commit to long-term government bonds due to speculation over future policy direction after the elections, resulting in a preference for short-term treasury bills that offer higher liquidity. Economic expert Salwindi Notulu explained, “Investors need assurance, especially in an election year like 2026.
The market is affected by the high level of uncertainty regarding what will happen after the elections. As a result, participation in long-term GRZ bonds has declined, with investors opting for more liquid short-term instruments.” Notulu added that the bond market is expected to recover after the elections, provided there is clarity and confidence in the new policy direction.
“Once elections are over, bonds are likely to stabilise, depending on the policy measures that will be put in place,” he said.
By Justine Phiri
