The Bank of Zambia held Government Bond Auction No. 04/2026/BA on 24 April 2026, with results announced the same day and settlement on 27 April 2026. Yields fell across all tenors, the 5-year was officially suspended, and overall demand was notably weak.
Use our Government Bonds calculator to model your returns at the new rates.
Results at a glance
Tenor | Amount Offered | Allocated (Face Value) | Coupon Rate | Cut-off Yield |
|---|---|---|---|---|
2-Year | K520M | K453.11M | 14.25% | 14.25% |
3-Year | K600M | K506.75M | 14.50% | 14.50% |
5-Year | Not offered | - | - | - |
7-Year | K1,575M | K27.33M | 16.00% | 15.80% |
10-Year | K1,715M | K34.68M | 16.60% | 16.50% |
15-Year | K1,890M | K263.01M | 17.59% | 17.50% |
Total offered: K6.3 billion. Total allocated: K1.285 billion (face value), K1.297 billion (cost).
What changed
Yields dropped across the board compared to recent auctions:
2-year: 14.25% (down from 14.5%)
3-year: 14.50% (down from 14.9%)
5-year: Suspended - "not offered in this auction to realign the Government securities maturity profile in the medium term"
7-year: 15.80% cut-off yield (down from 16.0%)
10-year: 16.50% cut-off yield (down from 16.6%)
15-year: 17.50% cut-off yield (down from 17.59%)
The downward trend in yields reflects the broader easing of monetary conditions. Lower yields mean the government is borrowing more cheaply, but investors receive less income per Kwacha invested.
Demand was weak
Of the K6.3 billion on offer, only K1.285 billion was allocated - roughly 20% of the total. The 7-year tenor was especially stark: just K27 million allocated out of K1,575 million offered. The 10-year managed only K35 million of K1,715 million, and the 15-year took K263 million of K1,890 million. The 2-year and 3-year tenors attracted the strongest demand.
Several factors likely contributed to the weak demand:
Falling yields: Investors may be reluctant to lock in lower rates if they expect yields to stabilise or rise again.
Preference for shorter tenors: The 2-year and 3-year bonds attracted the bulk of demand (K453M and K507M respectively), suggesting investors prefer shorter commitments at current rates.
Re-issue pricing: The 7, 10, and 15-year bonds are re-issues with higher original coupon rates. When the cut-off yield is below the coupon rate, the bonds trade at a premium, which may discourage participation.
New issues vs re-issues
This auction included both new issues and re-issues, which work differently:
2-year and 3-year (new issues): These are brand new bond series. The coupon rate equals the cut-off yield (14.25% and 14.50% respectively). You pay exactly par - K100 per script.
7-year, 10-year, and 15-year (re-issues): These add to existing bond series with pre-set coupon rates (16.00%, 16.60%, and 17.59%). Because the cut-off yields are below the coupon rates, these bonds may trade at a premium - you could pay slightly more than K100 per script, but receive higher coupon payments.
For re-issues, the yield you receive depends on the price you pay at auction, not just the coupon rate. The cut-off yield reflects the actual return after accounting for any premium or discount.
What this means for investors
Lower but still attractive: At 14.25% to 17.50%, bond yields remain well above inflation (roughly 7%). Real returns after tax and fees are still positive across all tenors.
Fewer options: The 5-year suspension narrows the available tenor range. Investors who previously favoured the 5-year as a middle-ground option now need to choose between 3-year and 7-year.
Short-term preference clear: The strong demand for 2-year and 3-year bonds versus near-zero demand for longer tenors signals where the market sees value right now.
Watch the next auction: The next bond auction will show whether this downward yield trend continues. If it does, current rates may look attractive in hindsight.
For a full guide on how bonds work and how to participate: How to Invest in Government Bonds in Zambia. Model your returns with our Government Bonds calculator.