Zambia’s Economic Transformation: Resilience and Growth in the Face of Challenges
Economic Resilience and Growth
Zambia’s economy has demonstrated remarkable resilience in 2024, achieving 4% growth despite severe drought conditions. This growth was primarily driven by stronger-than-expected performance in mining and non-mining sectors, particularly in ICT, financial services, and construction.
Looking ahead, the country’s economic prospects appear promising, with GDP projected to expand by 6.6% in 2025 – the fastest pace since 2012.
Challenges and Government Response
The country recently faced its worst drought in over two decades during the 2023/2024 rainy season, exacerbated by the El Niño weather pattern. This climatic disaster affected 9.8 million people across 84 districts, leading to decreased agricultural output and increased electricity outages.
Despite these challenges, including the lingering effects of sovereign debt default in 2020, the government has made significant progress. The administration has successfully restructured $3.9 billion of debt and secured additional support through a $388 million IMF loan and a potential $140 million catastrophe credit line from the World Bank.
Strategic Development Initiatives
The government is actively pursuing public-private partnerships (PPPs) to boost infrastructure development. Eight PPP projects are currently planned to deliver 828 km of new roads. Additionally, Zambia is revitalizing its railway network through partnerships with China and Tanzania.
According to the World Bank, Zambia has significant potential to leverage its energy transition mineral (ETM) endowments for growth and economic development. These minerals are increasingly sought after for the global energy transition, presenting a unique opportunity for the country’s economic transformation.
Future Outlook
The economic outlook remains optimistic, driven by robust momentum in the mining sector, an anticipated rebound in agriculture, and improvements in tourism. However, significant risks persist, including lower global growth, uncertainties in trade policies, and frequent climatic events. While mining continues to be a major economic driver, experts emphasize the need for economic diversification to accelerate transformation.
