Zanaco Secondary Market Government Securities Trading

Government securities are debt instruments issued by the Government of Zambia through the Bank of Zambia. By issuing these instruments, the Government is raising money from the purchasers of the instruments. Government is obliged to pay the holder of Government securities a fixed sum of money on the maturity date of the instrument. Thus, when you purchase Government securities, you are lending your money to the Zambian Government.

These are short-term debt instruments that the Zambian Government issues in order to borrow money for a period of up to one year. In Zambia, you can buy Treasury bills for periods (tenors) of 91 days, 182 days, 273 days and 364 days. Treasury bills are always bought at a price less than their face value (maturity amount). On maturity date, the Government pays the holder of the Treasury bill an amount of money equal to the face value. Therefore, the interest earned on the Treasury bill is the difference between the amount you paid at the beginning of the investment (cost amount) and the face value (maturity amount) that you receive on maturity date.

These are longer-term instruments that the Government issues to borrow money for a period of more than one year. Government bonds are currently issued for 2 years, 3 years, 5 years, 7 years, 10 years and 15 years. The Zambian Government pays a fixed rate of interest called the coupon every six months and the face value (maturity amount) at end of the period. This means that the investor receives coupon payments every six months and their investment amount at maturity date.