Zambia flag Zambia: Economic and Political Overview

The economic context of Zambia

Economic Indicators

Zambia's real GDP growth has shown consistency, expanding by 6.2% in 2021 and 5.2% in 2022. Despite an initial downward adjustment to the 2023 growth forecast, now at 2.7% from an initial 4.2%, recent data indicates a more positive trend, with an average growth of 5% in the first three quarters of 2023. Growth drivers for 2023 included information and communication, education, and financial and insurance activities, diverging from traditional sectors like mining, agriculture, and manufacturing. The earlier downward revision was primarily due to reduced copper production and declining global copper prices. Operational challenges, low ore grade in mining, low agricultural productivity, and limited manufacturing investments contributed to suppressed growth. Looking ahead to 2024, the 4.8% GDP growth target set in the 2024 National Budget, while moderate, suggests a hopeful economic outlook for Zambia (data from the Zambia Institute for Policy Analysis and Research).

According to the IMF, by the end of June, the primary fiscal surplus (cash basis) stood at ZMK 2.2 billion. Despite a mining-related revenue shortfall of 0.8% of GDP in the first half of 2023 compared to the budget, non-mining revenues, including one-offs like tax amnesty and fees from selling mobile licenses, along with controlled primary spending, have offset the deficit. As of the end of September 2023, arrears on external public and publicly guaranteed debt (both principal and interest) totaled USD 5.3 billion, marking a USD 1.2 billion increase from December 2022. This increase is exclusively linked to claims within the debt restructuring scope. All arrears owed to international financial institutions (IFIs) have been settled. Overall, the primary balance (cash basis) saw an improvement of 1.8% of GDP compared to 2022, primarily due to decreased primary spending (1.2% of GDP), including reduced investment from foreign-financed projects (0.8% of GDP) and controlled current spending (0.4% of GDP – IMF projections). In line with the 2024 draft budget, the authorities have pledged to maintain a primary balance of ZMK 5.57 billion (0.8% of GDP), accompanied by a suggested adjusted end-June Quarterly Performance Criteria (QPC) of ZMK 2.16 billion. Based on Fitch assumptions regarding debt restructuring parameters and anticipated appreciation of the kwacha post-restructuring, government debt is forecasted to decrease to 90% of GDP in 2024, down from an estimated 116% in 2023, with a further decline to 80.5% in 2025. To address refinancing and exchange rate risks, the authorities intend to raise the proportion of domestic debt in net financing from 30% to 55% by 2025, extend the maturity of local-currency debt, and rely on concessional external financing in line with the IMF's performance criterion ceiling on non-concessional borrowing. The inflation rate was estimated at 10.6% in 2023 by the IMF, well above the 6%-8% target of Bank of Zambia. The completion of the debt restructuring should enable the kwacha to appreciate in 2024 and 2025, helping inflation taper, which is forecast to decrease to 7.5% in 2025.

While Zambia achieved lower middle-income status in 2011, after a decade of strong growth, widespread and extreme rural poverty (half of Zambians still live in poverty) remains a significant problem and is compounded by a high birth rate and a relatively high burden of HIV/AIDS (one in eight Zambians has the virus). In 2023, the unemployment rate in the country was at 4.3% (World Bank), with youth unemployment being particularly high, leading more young people in Zambia to venture into businesses to counter unemployment. The country’s GDP per capita (PPP) was estimated at USD 3,975 in 2022 by the World Bank (latest data available).

Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 29.1228.4129.8732.4135.06
GDP (Constant Prices, Annual % Change)
GDP per Capita (USD) 1,4551,3811,4131,4931,573
General Government Gross Debt (in % of GDP) 99.5115.
Inflation Rate (%)
Current Account (billions USD) 1.07-0.511.121.692.40
Current Account (in % of GDP) 3.7-

Source: IMF – World Economic Outlook Database, October 2021

Main Sectors of Industry

The agricultural sector is the backbone of the Zambian economy: although the sector represents only 3.1% of the country's GDP, it employs 57% of the workforce (World Bank, latest data available). Zambia spans 75 million hectares, of which 58% is classified as medium to high potential for agriculture production; however, agriculture in Zambia remains largely underexploited, with only 15% of its potential arable land under cultivation. The sector's low contribution to GDP is attributable to poor rural infrastructure and an extreme vulnerability to drought. Zambia's agricultural sector focuses mainly on crop-farming (maize, cotton, soybeans, tobacco, groundnuts, paprika, sorghum, wheat, rice, sunflower seeds) and livestock production. The country is also one of the biggest seed exporters in Africa. At the beginning of 2023, export earnings from agricultural products accounted for 19% of the non-traditional exports (data Zambia Statistical Agency).

The industrial sector is estimated to account for 35.3% of GDP and 10% of employment, mostly thanks to the mining, construction, and manufacturing sub-sectors. Major industries of Zambia include copper mining and processing, construction, emerald mining, beverages, food, textiles, chemicals, fertilizer, and horticulture. Growth in the manufacturing industry is largely driven by the agro-processing of food and beverages as well as the textiles and leather sub-sectors. However, dependency on copper which is the country’s main export makes Zambia vulnerable to fluctuations in the world commodities prices. Overall, the manufacturing sector is estimated to account for 14% of GDP (World Bank), and it grew by 3.7%, 0.8%, and 0.3% in the first three quarters of 2023, respectively (data Zambia Statistical Agency).

Services play a major role in the Zambian economy. They represent 55.5% of GDP and employ 32% of the total workforce. The tertiary sector includes a large wholesale and retail industry. Tourism is also growing and has a positive ripple effect on the transport and hotel sectors. According to the Zambia Statistical Agency, wholesale and retail trade generated ZMK 19.8 billion in turnover in the first three quarters of 2023, against ZMK 11.9 billion in the information and communication and ZMK 6.4 billion in financial and insurance activities. By the beginning of 2023, the banking sector consisted of seventeen commercial banks, with five banks dominating the scene. Together, these five banks held 65% of the total sector assets and deposits (IMF, latest data available).

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 58.7 8.8 32.5
Value Added (in % of GDP) 3.4 33.8 58.0
Value Added (Annual % Change) -2.4 -2.1 9.9

Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.


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Indicator of Economic Freedom


The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}

World Rank:
Regional Rank:

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation


Country Risk

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Latest Update: May 2024