Inflation in Zambia accelerated to a 20-month top in November as a fall in the value of the Kwacha increased the cost of imported goods such as cereals, vehicles and spare parts.

Consumer prices in the country increased 12.9% in November from the previous year, compared to a figure of 12.6% in October, according to a statement by Statistician-General Mulenga Musepa in the capital of Lusaka on Thursday. This is the highest inflation rate in Zambia since March 2022, Bloomberg reports, with costs rising 0.9% during the month.

Zambia’s Kwacha has depreciated by more than 20% since July due to Dollar shortages partly stemming from a reduction in copper production – its principal foreign-exchange earner - lower metal prices and ongoing issues with debt negotiations.

Official creditors, co-led by China and France, rebuffed a revised bondholder restructuring deal last week, bringing a halt to the revamp of $3 billion of outstanding notes, the Bloomberg report goes on to add. Zambia has been attempting to rework its debt since 2020 when it became the first African country to default on its sovereign debt during the pandemic.

Although the country’s central bank has undertaken measures to stop the currency’s slide over the last week – such as hiking interest rates by 100 basis points to 11% and increasing lenders’ reserve-ratio requirements from 14.5% to 17%, the steps have done little to reverse the decline.

Ongoing weakness could again result in the Bank of Zambia increasing interest rates next year.

Furthermore, food inflation increased in November to 13.7% from 13.6% the month before. Whereas non-food price growth rose to 11.8% from 11.3% in October. Inflation data is gathered within the first 10 days of each month.