Economy of Zambia information

Economy of Zambia

Lusaka is the capital and largest financial district in Zambia.
Currency	Zambian kwacha (ZMW)
Fiscal year	calendar years
Trade organisations	AU, AfCFTA (signed), WTO, SADC, COMESA
Country group	Developing/Emerging[1] Low income economy[2]
Statistics
Population	(2021 est.)19,473,125[3][4][5]
GDP	$29.425 billion (nominal, 2023 est.)[6] $76.325 billion (PPP, 2022 est.)[6]
GDP growth	1.4% (2019) -2.8% (2020e) 4.3% (2021e) 3.1% (2022e)[6]
GDP per capita	$1,348 (nominal, 2022 est.)[6] $3,808 (PPP, 2022 est.)[6]
GDP by sector	agriculture: 8.6% industry: 31.3% services: 60% (2015 est.)[7]
Inflation (CPI)	12.5% (2022 est.)[6]
Population below poverty line	60.5% (2010)
Human Development Index	0.565 medium (2021)[8] (154th) 0.390 low IHDI (2021)[9]
Labour force	6.906 million(2015)
Labour force by occupation	agriculture: 54.8%, industry: 9.9%, services: 35.3% (2017)
Unemployment	7.2% (2018)[10]
Main industries	copper mining and processing, construction, foodstuffs, beverages, chemicals, textiles, fertilizer, horticulture
External
Exports	$11.111 billion (2021 est)[11]
Export goods	copper/cobalt 64%, cobalt, gold, electricity, gemstones tobacco, flowers, cotton, raw sugar
Main export partners	Switzerland(+) 29%  China(-) 16.0%  Namibia(+) 12.0%  DR Congo(-) 9%  Singapore(+) 5.0% (2019)[12]
Imports	$6.899 billion (2021 est)[13]
Import goods	machinery, transportation equipment, petroleum products, electricity, fertilizer; foodstuffs, clothing
Main import partners	South Africa(-) 29.0%  China(+) 14.0%  United Arab Emirates(+) 12.0%  India(+) 5.0% (2019)[14]
Public finances
Government debt	$17.00 billion (December 2021)[15]
Revenues	$4.94 billion (2021)
Expenses	$6.74 billion (2021)
Credit rating	Standard & Poor's:[16] B+ (Domestic) B+ (Foreign) B+ (T&C Assessment)
Foreign reserves	$3.000 billion (2 July 2022 est.) [17]
Main data source: CIA World Fact Book All values, unless otherwise stated, are in US dollars.

Zambia is a developing country, and it achieved middle-income status in 2011. Through the first decade of the 21st century, the economy of Zambia was one of the fastest-growing economies in Africa, and its capital, Lusaka, the fastest-growing city in the Southern African Development Community (SADC).^[18] Zambia's economic performance has stalled in recent years due to declining copper prices, significant fiscal deficits, and energy shortages.^[19][20]

Zambia is currently ranked 8th in Africa, 5th in the Southern African Development Community (SADC) and 4th in the Common Market for Eastern and Southern Africa (COMESA) in terms of the ease of doing business. Furthermore, Zambia is ranked the 8th most competitive country in Africa on the Global Competitiveness Index. Recently, Zambia was ranked 7th by Forbes as the best country for doing business among 54 African countries.^[21]

The government has succeeded in reducing the cost of doing business, but other important indicators of the business environment, such as restrictions on trade and government and judicial integrity, have deteriorated.^[22]

Zambia itself is one of Sub-Saharan Africa's most highly urbanized countries. About one-half of the country's 16 million people are concentrated in a few urban zones strung along the major transportation corridors, while rural areas are under-populated. Unemployment and underemployment are serious problems. National GDP has actually doubled since independence, but due in large part to high birth rates per capita, annual incomes are currently at about two-thirds of their levels at independence. As of 2019, Zambia's GDP per capita (current international dollars) stands at $1,305.00.

In the area of trade, Zambia recorded a positive trade balance of US$300.6 million in 2014, as well as an increase in non-traditional exports (NTEs) over the years from US$1,381.8million in 2010 to US$3,550.3 million in 2013. Copper and cobalt are among Zambia's main exports, while non-traditional exports include cotton, coffee, fresh flowers, burley tobacco, gemstones and maize (corn), among others. Zambia is also eligible to export duty-free goods to the United States under the African Growth and Opportunity Act (AGOA); the Act allows eligible countries from sub-Saharan Africa to export over 6,400 goods to the United States.^[21]

For the first time since 1989, in 2007 Zambia's economic growth reached the 6%–7% mark needed to reduce poverty significantly. Copper output has increased steadily since 2004, due to higher copper prices and the opening of new mines. The maize harvest was again good in 2005, helping boost GDP and agricultural exports. Cooperation continues with international bodies on programs to reduce poverty, including a new lending arrangement with the IMF in the second quarter of 2004. A tighter monetary policy will help cut inflation, but Zambia still has a serious problem with high public debt.^[21]

In October 2021, to spur economic development, Zambia took measures to promote local development in its ambitious 2022 national budget. The Government announced an unprecedented constituency development fund (CDF) increment from ZMW 1.6 million (U$91,000) to ZMW 25.7 million (U$1.5million) for each constituency taking the total development fund injection into the local communities from ZMW 250 million (U$14.2 million) to ZMW 4 billion (U$228.4 million).^[23][24] After winning a crucial Staff-Level IMF Deal, in early December 2021, Zambia went on to cut fuel subsidies later that month as a key step in seeking U$1.4 billion from the IMF.^[25]

At the end of July 2022, the Official Creditor Committee co-chaired by China and France, and vice chaired by South Africa agreed to provide the financing assurances under the G20 Common Framework for debt treatment that Zambia had been waiting for to secure final approval from the International Monetary Fund for a US$1.4 billion bailout under the Extended Credit Facility.^[26][27][28] In early August 2022, at the symposium on the midyear budget and economic performance and the 2023 to 2025 medium term budget plan, Zambia's Minister of Finance and National Planning, Dr. Situmbeko Musokotwane said the IMF board was expected to meet at the end of August 2022 to approve the loan programme.^[29]

On 31 August 2022, the International Monetary Fund (IMF) board approved a US$1.3 billion extended credit facility to help Zambia restore fiscal stability.^[30][31]

In June 2023, Zambia reached an agreement in principle to restructure US$6.3 billion of debt with bilateral lenders.^{[32][33][34][35]} In October 2023, Zambia agreed a memorandum of understanding (MoU) with its bilateral creditors on restructuring about $6.3 billion of debt. Following the signing of the MoU, the terms would be implemented through bilateral agreements with each member of the OCC (Official Creditor Committee).^[36][37][38]

In March 2024, Zambia struck an 76.5 billion kwacha (US$ 3.0 billion) restructuring deal with bondholders.^[39][40][41] The agreement included important concessions from the Bondholders, while providing the required debt relief to the Government.^[42] Under the agreement, Bondholders would forego approximately 21.4 billion kwacha (US$ 840 million) of their claims, and provide cash flow relief of approximately 63.8 billion kwacha (US$ 2.5 billion) during the IMF programme period.^[42][43][44]