Faith Nyasuguta
Zambia’s economy has defied expectations, growing at a rate three times faster than the International Monetary Fund (IMF) had projected for 2023. The nation’s Gross Domestic Product (GDP) expanded by 4%, significantly surpassing the IMF’s estimate of 1.2% and even exceeding the government’s own forecasts. This impressive growth was largely fuelled by a strong recovery in agriculture and a boom in the mining sector.
Fourth-Quarter Surge
The economy’s performance was particularly remarkable in the last three months of the year, when GDP surged by 8.6%, the fastest quarterly growth in over a decade. This sharp increase was driven by a 27.6% expansion in agriculture, rebounding from a severe contraction of 17.3% in the previous quarter. The mining sector also saw a massive jump, growing by 26.8% compared to just 3% in the prior quarter.
As Africa’s second-largest copper producer, Zambia continues to rely heavily on the metal, which accounts for more than 70% of its export earnings. Total copper output in 2023 exceeded 820,000 tons, according to Mines and Minerals Development Minister Paul Kabuswe. The government has actively encouraged investment in the sector, particularly by courting new investors and renegotiating mining agreements to boost production.
Hichilema’s Economic Reforms
President Hakainde Hichilema, who took office in 2021, has focused on economic recovery and debt restructuring to stabilize Zambia’s finances. His administration has been working with the IMF and international creditors to manage Zambia’s massive external debt, which stood at over $13 billion when he assumed office.
Hichilema’s market-friendly policies, combined with efforts to enhance agricultural output and attract foreign investment, have helped restore confidence in the economy.
Zambia’s economic turnaround is particularly significant given the country’s financial struggles in recent years. In 2020, it became the first African nation to default on its sovereign debt during the COVID-19 pandemic. Since then, the government has prioritized economic stabilization, seeking debt relief and structural reforms to promote sustainable growth.
Inflation Drops
In a further positive sign, Zambia’s inflation rate declined for the first time in over a year, easing pressure on households. The slowdown in food prices, especially bread and cereals, was driven by improved rainfall, which helped mitigate the effects of the severe drought. In March, food price inflation fell to 18.9%, down from 20.6% the previous month.
With strong economic momentum and improved investor confidence, Zambia is positioning itself for continued growth in 2025, despite ongoing challenges in debt management and global commodity markets.
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