Economic and Political Overview

flag Zambia Zambia: Economic and Political Overview

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline | COVID-19 Country Response

 

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) 29.7429.5431.0433.5036.23
GDP (Constant Prices, Annual % Change) 4.73.64.34.54.7
GDP per Capita (USD) 1,4861,4361,4691,5431,626
General Government Gross Debt (in % of GDP) 98.50.00.00.00.0
Inflation Rate (%) n/a10.69.67.57.0
Current Account (billions USD) 1.071.112.192.823.06
Current Account (in % of GDP) 3.63.87.18.48.4

Source: IMF – World Economic Outlook Database , Latest available data

Note: (e) Estimated Data

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.

 

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Monetary Indicators 20162017201820192020
Zambian Kwacha (ZMW) - Average Annual Exchange Rate For 1 MUR 0.290.280.310.360.47

Source: World Bank - Latest available data.

 
 

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Indicator of Economic Freedom

Definition:

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.

Score:
50,4/100
World Rank:
159
Regional Rank:
39

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

 
 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

Zambia is open to foreign trade, which accounts for 69% of the country's GDP (World Bank, latest data available). Zambia's trade policy aims to diversify its economy through privatisation programs and the expansion of its export base. The country mainly exports copper (68.9%), sulphur (2.6%), electrical energy (2.6%), and ferro-alloys (1.9%). As for the country's main imports, they include petroleum oils (5.3%), sulphur (4.3%), mineral or chemical fertilisers (4.3%), copper ores (4.2%), and motor vehicles (3.8% - data Comtrade, 2022).

The country is a member of COMESA and has signed Interim Economic Partnership Agreements (Interim EPAs) with the European Commission. The country became a member of the WTO in 1995. Customs duties are high, but the country has few non-tariff trade barriers. Certain products such as crude oil, medical supplies, and fertilisers are exempt from import duties. However, irregularities in the tax system and high transportation costs are real trade barriers. Zambian products are mainly exported towards Switzerland (38.5%), China (20.7%), Democratic Republic of Congo (13.6%), Pitcairn (12.8%), and Equatorial Guinea (5.4%); whereas imports come chiefly from South Africa (30.0%), Equatorial Guinea (21.2%), China (15.5%), the United Arab Emirates (7.6%), and the Democratic Republic of Congo (7.3% - data Comtrade, 2022).

Zambia's trade balance has been experiencing a structural surplus in recent years. In 2022, exports of goods amounted to USD 11.6 billion, while imports reached USD 9 billion (+15.3% and +40.6% y-o-y, respectively – data WTO). As for services, exports reached USD 933 million, while imports amounted to USD 1.8 billion. The overall trade balance was estimated to be positive by 11.1% of GDP by the World Bank (from 18.2% one year earlier). According to the latest figures available from ZamStat, in the first three quarters of 2023, the country exported USD 8 billion worth of goods against USD 7.6 billion in imports.

 
Foreign Trade Indicators 20182019202020212022
Imports of Goods (million USD) 9,4667,1735,2856,4359,047
Exports of Goods (million USD) 9,0347,0397,92410,10111,651
Imports of Services (million USD) 1,6781,5342,2621,2931,876
Exports of Services (million USD) 9531,012556526933
Imports of Goods and Services (in % of GDP) 36.934.232.533.927.2
Exports of Goods and Services (in % of GDP) 38.034.646.852.138.4
Trade Balance (million USD) 5147443,2164,8163,369
Trade Balance (Including Service) (million USD) -2102221,5104,0372,426
Foreign Trade (in % of GDP) 74.968.879.386.065.6

Source: WTO – World Trade Organisation ; World Bank , Latest Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2022
Switzerland 38.5%
China 20.7%
Democratic Republic of Congo 13.6%
Pitcairn 12.8%
Equatorial Guinea 5.4%
See More Countries 8.9%
Main Suppliers
(% of Imports)
2022
South Africa 30.0%
Equatorial Guinea 21.2%
China 15.5%
United Arab Emirates 7.6%
Democratic Republic of Congo 7.3%
See More Countries 18.3%

Source: Comtrade, Latest Available Data

 
 

Main Products

11.7 bn USD of products exported in 2022
Copper, unrefined; copper anodes for electrolytic...Copper, unrefined; copper anodes for electrolytic refining 52.7%
Copper, refined, and copper alloys, unwrought ...Copper, refined, and copper alloys, unwrought (excl. copper alloys of heading 7405) 16.2%
Sulphur of all kinds (excl. sublimed sulphur,...Sulphur of all kinds (excl. sublimed sulphur, precipitated sulphur and colloidal sulphur) 2.6%
Electrical energyElectrical energy 2.6%
Ferro-alloysFerro-alloys 1.9%
See More Products 24.1%
9.1 bn USD of products imported in 2022
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 5.3%
Sulphur of all kinds (excl. sublimed sulphur,...Sulphur of all kinds (excl. sublimed sulphur, precipitated sulphur and colloidal sulphur) 4.3%
Mineral or chemical nitrogenous fertilisers (excl....Mineral or chemical nitrogenous fertilisers (excl. those in pellet or similar forms, or in packages with a gross weight of <= 10 kg) 4.3%
Copper ores and concentratesCopper ores and concentrates 4.2%
Motor vehicles for the transport of goods, incl....Motor vehicles for the transport of goods, incl. chassis with engine and cab 3.8%
See More Products 78.1%

Source: Comtrade, Latest Available Data

 
 

To go further, check out our service Import-Export Flows.

 
 

Main Services

Source: United Nations Statistics Division, Latest Available Data

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Sources of General Economic Information

Ministries
Ministry of Finance
Ministry of Mines and Mineral Development
Ministry of Energy
Ministry of Agriculture
Ministry of Commerce, Trade and Industry
Ministry of Lands and Natural Resources
Statistical Office
Zambia Statistics Agency (ZamStats)
Central Bank
Bank of Zambia
Stock Exchange
Lusaka Securities Exchange (LuSE)
Search Engines
Google Zambia
Info Zambia
Economic Portals

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Political Outline

Current Political Leaders
President: Hakainde Hichilema (since 24 August 2021)
Vice-President: Mutale Nalumango (since 24 August 2021)
Next Election Dates
General elections: 2026
Main Political Parties
Zambia is a multi-party country. The main political parties are:

- Patriotic Front (PF): centre-left, social democrat
- Party of National Unity and Progress (PNUP): centre-right, liberal
- United Party for National Development (UPND): centre, liberal

Minor parties include the Alliance for Democracy and Development (ADD) and the Forum for Democracy and Development (FDD).

Type of State
Zambia is a presidential republic.
Executive Power
The executive is exercised by the President (elected by universal suffrage for a 5-year term, for a maximum of two terms), who is the head of state and the head of government, and also appoints the Cabinet and the Vice-President.
Legislative Power
The legislative power is vested in the Parliament, which has of only one chamber: the National Assembly of Zambia. It is the highest law-making body and it is composed of 167 members (currently 166), of which 156 are directly elected in single-member constituencies using the simple majority system, 8 are appointed by the President, and 3 are ex-officio members: the Vice President, the Speaker, and a deputy speaker (with one being elected from outside the National Assembly, while the other is chosen among the elected members of the house). The term for all the members of the National Assembly is 5 years.
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
115/180
 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Partly Free
Political Freedom:
4/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

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COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of Zambia please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

 

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Latest Update: May 2024