Treasury bills and government bonds allow an individual investor to lend money to the Government of Zambia for a defined period. The Bank of Zambia issues and administers these securities on behalf of the Government. In return, the investor receives a return determined through the auction and the instrument’s terms.
They can be useful for preserving capital, planning future cash flows and adding fixed-income exposure to a portfolio. But “government security” does not mean “no risk.” Inflation, changing interest rates, early-sale prices, tax, reinvestment and practical access to your money can all affect the result.
This guide explains how Treasury bills and government bonds in Zambia work, the current entry requirements published by the Bank of Zambia, how auctions and payments operate, and how to decide whether a particular maturity fits your goal.
Use a Treasury bill for a relatively short, known time horizon and a government bond for a longer horizon or recurring coupon income—provided you understand the price, maturity, tax treatment and early-exit risk. Start with your goal date, not with the highest advertised yield.
What Are Government Securities?
A government security is a debt instrument. When you buy one, you are not buying a share in a company. You are lending money to the issuer under stated terms. Zambia’s official Government Securities FAQ explains that the Government of Zambia borrows by issuing Treasury bills and government bonds through the Bank of Zambia.
The instrument tells you when the principal is due and how the return is calculated. If you hold it until maturity and payments are made according to its terms, the cash flows are more predictable than those of ordinary shares. If you sell before maturity, however, the market price may be above or below what you paid.
Treasury Bills vs Government Bonds in Zambia
| Feature | Treasury bill | Government bond |
|---|---|---|
| Typical term | Short term. Bank of Zambia materials list 91, 182, 273 and 364 days. | Longer term. Published materials commonly list 2, 3, 5, 7, 10 and 15 years; check the current issuance calendar. |
| How return is paid | Normally bought at a discount to face value. The maturity payment minus the purchase cost is the gross interest. | Normally pays a fixed coupon every six months, with face value due at maturity. |
| Cash-flow pattern | One payment at maturity rather than periodic coupons. | Semi-annual coupon payments plus principal at maturity, subject to the issue terms. |
| Main practical use | Shorter savings goals, cash planning or a maturity ladder. | Longer-term income, liability matching or fixed-income allocation. |
| Early exit | May be possible under prevailing market procedures, but price, timing and access are not guaranteed. | Can be sold in the secondary market, where the price may rise or fall with yields and market demand. |
The better instrument is the one whose cash-flow date fits your real need. A 15-year bond is not automatically “better” because its quoted yield is higher, and a 91-day bill is not automatically “safer” if you repeatedly reinvest it without knowing what future rates will be.
Who Can Invest and What Is the Minimum?
According to the Bank of Zambia’s official FAQ, individuals, businesses, institutions and foreign entities may invest. An investor needs a local Kwacha commercial-bank account and must be registered on the Bank of Zambia’s Central Securities Depository, commonly called the CSD.
The published minimum face value for both Treasury bills and government bonds is K1,000. Applications from K1,000 to K499,000 fall within the non-competitive window and are made in multiples of K1,000. Bids of K500,000 or more are competitive and are made in multiples of K5,000. Always confirm the current auction announcement before applying because operating terms can change.
Face value is not always the amount you pay. A Treasury bill is bought at a discount, so the purchase price is lower than the face value due at maturity. A bond’s settlement price can also differ from face value depending on the auction, accrued interest and issue terms. Ask for the actual settlement amount before funding your bank account.
How the Auction Process Works
Government securities are offered through auctions. The Bank of Zambia publishes an issuance calendar and auction announcements showing the instruments on offer, dates and submission requirements. The calendar is a planning tool; the specific announcement should be treated as the operative information for that auction.
Non-competitive applications
A non-competitive investor states the face value they want but does not submit a yield. The investor accepts the auction’s cut-off price. This route is designed to make access simpler for smaller applicants, but allocation is still subject to the auction rules and available amount.
Competitive bids
A competitive bidder states both the desired amount and yield. The bid may be accepted fully, partly or not at all depending on the auction result. The Bank of Zambia describes its auctions as single-price auctions: successful bidders receive the cut-off price rather than each receiving a different accepted price.
In 2026 the Bank of Zambia introduced operational changes including benchmark-bond reopenings and a revised bond-auction frequency. Treasury-bill auctions continue more frequently. Do not assume last year’s schedule or list of maturities still applies; verify the Treasury-bill and bond pages before acting.
How Treasury-Bill Pricing Works
A Treasury bill does not normally send you coupon payments. Instead, you pay less than its face value and receive the face value at maturity. The difference is the gross interest before applicable tax and costs.
Suppose an investor is allocated a Treasury bill with a K10,000 face value and the settlement cost is K9,550. If held to maturity and paid according to its terms, the gross difference is K450. The investor’s return should be evaluated against the actual number of days, tax and any transaction or service cost—not by treating K450 as an annual return.
The Bank of Zambia publishes a Treasury-bill calculator. Use the current auction inputs and confirm the bank’s settlement figure rather than relying on a simplified example.
Quoted yields, discount rates and investment returns are related but not identical. If you are comparing a Treasury bill with a bank deposit, unit trust or bond, make sure the figures use the same annualisation method, tax basis and time period.
How Bond Coupons, Prices and Yields Work
A bond’s coupon rate determines the scheduled interest amount calculated on its face value. The yield reflects the return implied by the price you pay and the future cash flows. Coupon and yield can therefore be different.
When market yields rise, the price of an existing fixed-rate bond will generally fall; when market yields fall, its price will generally rise. Longer-maturity bonds are usually more sensitive to yield changes. This matters most if you need to sell before maturity or if you are comparing your holding with a newly issued bond.
If a hypothetical K10,000 bond has a 12% annual coupon paid in two equal instalments, the scheduled gross coupon would be K600 every six months. That does not mean the investment’s yield is exactly 12%, because the purchase price, accrued interest, tax, timing and final redemption cash flow also affect the return.
How to Buy Government Securities in Zambia
The Bank of Zambia’s published guidance allows applications through its investor channels or through commercial banks, subject to current procedures. Your commercial bank is also involved in settlement and in receiving coupon or maturity payments. Ask the bank which forms, deadlines and charges apply before the auction closes.
- Define the goal. Write down the amount you need, the date you need it and whether you require periodic income.
- Keep an emergency buffer. Do not commit money you may need before the security can be sold or matures.
- Open or confirm a local Kwacha bank account. Verify that your bank supports the required government-securities settlement process.
- Register on the CSD. Complete the current investor-registration and know-your-customer requirements.
- Read the auction announcement. Confirm the maturity, auction date, value date, application deadline and face-value rules.
- Choose competitive or non-competitive participation. Most individual applications below K500,000 use the non-competitive window.
- Submit the application correctly and on time. Obtain proof of submission and follow the official funding instructions.
- Check the result and fund settlement. Make sure the correct amount is available by the stated deadline.
- Verify the holding. Retain the allocation or CSD statement and reconcile every coupon or maturity payment.
- Plan maturity before it arrives. Decide in advance whether the proceeds will fund the goal, remain in cash or be considered for reinvestment.
A high yield can distract from the real decision: when you need the money, how much price movement you can tolerate and what role fixed income should play in your portfolio. Book the Initial Investment Advisory Consultation – 60 Minutes to work through those questions before you commit funds.
Seven Risks Individual Investors Should Understand
1. Sovereign and payment risk
Government securities are obligations of the Government, but no investment should be described as universally risk-free. The investor remains exposed to the issuer’s ability and willingness to pay according to the terms, as well as changes that may arise in a stressed financial environment.
2. Interest-rate and market-price risk
If yields rise after you buy a fixed-rate bond, its market value may fall. You can avoid crystallising that market-price movement only if you are able and willing to hold until maturity and the instrument pays according to its terms.
3. Inflation risk
A positive Kwacha return can still lose purchasing power if inflation is higher. Compare the expected after-tax return with the likely cost increase of the goal you are funding, while recognising that future inflation is uncertain.
4. Liquidity risk
An early sale may take time or require accepting a lower price. Bonds are traded through the secondary-market framework rather than simply being cashed at the Bank of Zambia on demand. Ask your bank, broker or market maker about the current procedure and likely costs before assuming you can exit immediately.
5. Reinvestment risk
A short bill may mature when new yields are lower, and bond coupons may have to be reinvested at less attractive rates. A maturity ladder can spread this timing risk but does not eliminate it.
6. Tax risk
Tax treatment affects the return you keep and can differ between coupon income, discount income, instruments or investor circumstances. The Bank of Zambia’s 2026 operational guidance also distinguishes certain reopened benchmark-bond cash flows. Consult current Zambia Revenue Authority tax information and professional advice where needed; do not rely on an old headline rate.
7. Operational and concentration risk
Late applications, incorrect CSD details, insufficient settlement funds or fraud involving false payment instructions can cause loss or delay. Concentrating all savings in one maturity also creates a large timing decision. Verify instructions through official channels and diversify deliberately.
Match the Maturity to the Goal
| Investor need | Question to ask | Possible approach to investigate |
|---|---|---|
| Known payment within one year | Can the maturity fall comfortably before the payment date? | A Treasury bill whose maturity leaves a settlement buffer. |
| Regular longer-term income | Are semi-annual coupons useful, and can principal stay invested to maturity? | A suitable government bond, after assessing price and inflation risk. |
| Uncertain access needs | Could an emergency force a sale at a poor time? | Keep adequate liquid savings before committing to a security. |
| Several future dates | Would spreading maturities reduce one large reinvestment decision? | Investigate a ladder of bills or bonds aligned to each date. |
Your investment plan should also consider assets outside government securities. A long-term goal may need growth exposure, while a short-term obligation may need greater stability. The PATH Investing Framework Training teaches a repeatable process for connecting each investment decision to a goal, time horizon and risk capacity.
A 10-Point Checklist Before You Apply
- Goal: The security’s maturity and cash-flow pattern match a specific purpose.
- Liquidity: You have enough accessible emergency cash and do not depend on an early sale.
- Instrument: You understand whether you are buying a bill or bond, including its exact maturity date.
- Price: You know the face value, settlement amount, accrued interest if any and how the yield is calculated.
- Application: You know whether your bid is competitive or non-competitive and have used the correct multiple.
- Deadline: You have confirmed the auction, submission, value and settlement dates from current official documents.
- Account: Your CSD registration, Kwacha bank account and identity details are accurate and current.
- Tax and costs: You have evaluated the return after applicable withholding tax, fees and transaction costs.
- Risk: You can tolerate inflation, reinvestment and market-price risk without abandoning the plan.
- Records: You will retain confirmations, reconcile payments and use only verified official instructions.
Frequently Asked Questions
Can an individual buy Treasury bills in Zambia?
Yes. Bank of Zambia guidance lists individuals among eligible investors. You need to satisfy the current CSD registration and banking requirements and submit a valid application under the auction procedures.
What is the minimum investment?
The Bank of Zambia’s published FAQ states a minimum face value of K1,000 for Treasury bills and government bonds. Because procedures can be revised, confirm the figure in the current auction announcement before funding an application.
Do I receive monthly interest?
Not normally. Treasury bills pay the face value at maturity rather than monthly interest. Government bonds commonly pay coupons every six months. The exact dates and terms are defined for each issue.
Can I withdraw before maturity?
There is no ordinary on-demand withdrawal like a savings account. An early exit may require a sale or other permitted market procedure, with uncertain timing and price. Plan to hold to maturity unless you have confirmed a realistic exit route.
Are government securities tax-free?
Do not assume so. Tax treatment depends on current Zambian rules, the instrument and the nature of the income. Calculate an after-tax return using current ZRA and issue-specific guidance.
Should I choose the highest yield?
No. A higher yield may come with a longer lock-in, greater price sensitivity or an inconvenient maturity. Compare instruments only after matching them to your goal date, liquidity needs and portfolio.
Official Sources to Check Before Investing
- Bank of Zambia: Government Securities FAQs
- Bank of Zambia: GRZ securities issuance calendar
- Bank of Zambia: Treasury bills
- Bank of Zambia: government bonds
- Ministry of Finance and National Planning: application procedure
- Zambia Revenue Authority: tax information
Official schedules, rates, forms and tax rules can change. Recheck the relevant pages and the current auction announcement when you are ready to act.
Build an investment plan around your goals
Use a structured framework to compare opportunities—or discuss your time horizon, liquidity needs and next practical step in a focused one-to-one session.
Continue Learning
If you are still building your foundation, read How to Start Investing in Zambia. To compare a pooled fixed-income option with direct securities, read Unit Trusts in Zambia. You can also join the Free Investor Welcome Webinar.
Important: This article is general educational information, not a recommendation, offer, tax opinion or personalised investment advice. Government securities can involve loss, delay and changing market value. Verify current terms with the Bank of Zambia, your commercial bank and qualified professional advisers before acting.
Last reviewed: September 2026.
