Zambia is a large, landlocked, resource-rich country with sparsely populated land in the center of Southern Africa. It shares its border with eight countries (Angola, Botswana, Democratic Republic of Congo, Malawi, Mozambique, Namibia, Tanzania, and Zimbabwe) that expands its regional market for goods and services.
Zambia is experiencing a large demographic shift and is one of the world’s youngest countries by median age. Its population, much of it urban, is estimated at about 19.6 million (2021) with a rapid growth rate of 2.7% per year, reflecting the relatively high fertility rate. As the large youth population attains reproductive age, the population is anticipated to double in the next 25 years, resulting in additional pressure on the demand for jobs, health care, and other social services.
Macroeconomic Developments and Outlook
Zambia’s economy rebounded in 2021, with real GDP growing at 4.6%, from a contraction of 2.8% in 2020, supported by firmer copper prices, favorable external demand, good rainfall, and post-election market confidence. In 2022, challenges in agriculture, mining, and construction slowed down the pace of post-pandemic recovery. Real GDP grew by 3.7%, year-on-year, in Q1–Q3, driven by services. The current account surplus narrowed to 2.3% of GDP in 2022 as spillovers from the war in Ukraine raised Zambia’s import bill while falling copper prices and output slowed growth in nominal export revenue. Uncertainty about debt restructuring reversed portfolio capital flows, triggering a more than 30% depreciation of the kwacha between September 2022 and March 2023 and placing pressure on official reserves.
Zambia’s recovery is expected to strengthen, with GDP growing by around 4.5% annually over 2023–25. Firmer copper demand from China and commencement of fertilizer production at a newly established domestic plant will broaden the base of GDP growth. Completion of reforms to agricultural policies, business regulations, and the energy sector will boost fiscal sustainability and promote private sector-led growth. However, the Bank of Zambia expects inflation to rise and remain above its target band of 6–8% over the next two years on account of inflationary pressure from sustained exchange rate depreciation, increase in energy costs, and lingering external headwinds.
Zambia ranks among the countries with the highest levels of poverty and inequality globally. The incidence of poverty worsened with the onset of the COVID-19 pandemic, but it is projected to slowly return to pre-pandemic levels by 2025, reflecting the sustained growth in the services and construction sectors that are expected to benefit the urban poor and reverse the recent increase in urban poverty. Progress with rural poverty, however, is more uncertain. While the agriculture sector is projected to grow, rates are just above population growth and the sector is subject to high volatility. Structural barriers to agricultural productivity and limited ability to cushion external shocks among the rural poor mean that additional support may be needed to improve their livelihoods.
More than 61% (2015) of Zambia’s 19.6 million people earn less than the international poverty line of $2.15 per day (compared to 41% across Sub-Saharan Africa) and three-quarters of the poor live in rural areas.
Zambia gained its independence in 1964, under the leadership of first President Kenneth Kaunda. The nation is considered a stable country with successful democratic elections held every five years. After many years of a one-party state, Zambia became a multi-party state in 1991.
Zambia’s democracy is evident by the nine Presidential elections and four different political parties that have so far ruled the country. Among them are the United National Independence Party (UNIP 1964-1991), Movement for Multiparty Democracy (MMD 1996-2011), Patriotic Front (PF2011-2021) and currently the United Party for National Development (UPND). Current President Hakainde Hichilema of the UPND was elected in August 2021, after defeating then-incumbent President Edgar Lungu of the Patriotic Front. The next presidential elections in Zambia will be held on August 12, 2026.
Last Updated: Sep 24, 2023