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Health Minister Dr. Chilufya fired

January 11, 2021by Nicholas Kabaso0
  • Reports quoting President Edgar Lungu indicate the government on Friday concluded talks on buying Glencore’s stake in Mopani Copper Mines and that a statement on the details of the agreement will be issued by Mines Minister Richard Musukwa soon.
  • Meanwhile, Zambia’s move to subsidize fuel prices this month is seen as highlighting the government’s balancing act of seeking to retain power while convincing the International Monetary Fund (IMF) to approve a bailout before an election scheduled for August. Recall Zambia has removed the 16% VAT on gasoline and diesel prices in order to alleviate price pressures. However, the IMF is seen as opposing subsidies, which could make talks for assistance difficult and potentially hinder discussions with Eurobond holders as they have demanded an IMF deal as a condition for agreeing to a restructuring of the debt.
  • President Lungu has with immediate effect fired Minister of Health Dr. Chitalu Chilufya and replaced him with Jonas Chanda. While no reasons were provided for the Chilufya’s sacking, it comes days after Parliament quizzed officials over irregularities cited in an audit of financial statements released last year. The reports allege the health ministry misused $17 million of public money meant to fund rubber gloves, condoms, and medical kits.
  • Stateside, the pressure on President Trump is ramping up from all angles. The House Democrats will today hold a vote for Trump’s removal to further pressure Vice President Pence to remove him from office. Pence has expressed his reluctance to do wo, in which case a move for impeachment will take place in record time. The House will undoubtedly pass the vote for impeachment on to the Senate, but this time, unlike the first, Trump might not be able to avoid his removal from office. Whether there is enough time for this to take place is debatable. Such impeachment would prevent him from running again as a presidential candidate in 2024. This week’s actions will be key.
  • Within the White House, there is talk of Trump losing widespread support and that those that have chosen not to resign in protest to the insurrection developments of last week are only there to ensure a smooth transition. Trump and his Vice President are not on speaking terms, and morale is low. For all intents and purposes, Trump has lost his administration with may of his staff now expressing concern about their careers and political futures given their link to his administration.
  • In the meantime, mass vaccination sites are open a full functional in New York, while Texas is planning on a different approach devoting more resources to fewer sites. Time will tell which approach is best, but vaccinations are now taking place with full commitment from the authorities. Add to that the widespread infection rate and the recovery of most patients and herd immunity levels will likely be achieved later this year, whether everyone vaccinates for the virus or not.
  • Shifting to the FX markets, the return of some political stability and the hopes that a Democrat clean sweep of Congress and the White House will lead to greater stimulus has translated into short-bets on the USD being curtailed. This is leading to a correction in the USD more than it is a reversal of fortunes. Over the longer-term, once the overhang of short USD positions is unwound, we would expect to see the USD resume its depreciation. Locally, the Kwacha this week is expected to be range bound against the USD as market movements continue to be dictated by demand and supply.

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Nicholas Kabaso

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