Friday, June 14, 2024

Zambia Economic Performance Analysis for 2023:What are the Prospects for 2024?


By Mwansa Chalwe Snr

This review of the performance of the Zambian economy takes a rather unorthodox approach. The analysis is carried out from the four perspectives of the main players in our economy-International Monetary Fund (IMF), the Government, Households and the Private Sector. In the past, the analysis was market-based approach, using the main markets in Zambia – the goods market, money markets, capital markets and labor markets – was adopted. The indicators will be both quantitative and qualitive.


In November 2023, the International Monetary Fund (IMF), carried out a review of the performance of the Zambian economy. And according to the IMF, the Zambian economy was performing quite well, using their key performance indicators (KPIs).

“Zambian economy is showing resilience. Real GDP growth is now projected at 4.3 percent in 2023 and 4.7 percent in 2024. Conditions do remain challenging, and they’ve put pressure on the external balance in the exchange rate, and inflation has increased .The staff level agreement on the second review of the program was reached on November 20th, and this agreement shows that Zambia’s performance under the program remains satisfactory with a significant fiscal effort undertaken in 2023, said IMF Communications Director, Julie Kozak, during a media briefing in Washington.

As result of this positive outlook on Zambian economy, the IMF released $187 Million under the Extended Credit Facility (ECF), whereas the World Bank released $125million grant.


When assessing the performance of the Zambian economy, Zambian government can claim to have done quite well too; when one reviews several things they accomplished.

The government was able to come to an agreement with Vedanta over the KCM asset. In addition, Govt, through ZCCM-IH has entered into an agreement with International Resources Holding (IRH), in which IRH has committed to invest a total of US $1.1 billion into Mopani Copper Mines (MCM) as a Strategic Equity Partner.

In terms of promotion of Foreign Direct Investments (FDI), the Zambia Development Agency announced that they had committed investments of $39.95 Billion in 2023 with potential jobs of 160,280. The actualized investment in 2023 were $2.1 Billion which created 25,890 jobs.

The debt Restructuring talks is another achievement by government. They made major progress as the Memorandum of Understanding (MOU) with Official Creditors was finally signed in June,2023. The government expects to conclude the talks with Bondholders in the first quarter of 2024.

One of the best achievements of the government for 2023, in my books, is the successful trip to China by President Hakainde Hichilema, which has far reaching economic consequences. It resulted in the resetting and recalibration of the relationship between the two nations, which this Author had been calling for in recent years, so that we have a real win-win relationship unlike previously.

The trip resulted in the upgrading of the ties between the two countries to “Comprehensive Strategic and Cooperative Partnership”, which is the highest classification so far applied to China’s Partners on the African Continent. Presidents Xi and Hichilema agreed to designate 2024 as the Year of Business Cooperation. China committed to support Zambia’s ambition to transform into an industrial hub, capitalizing on its resource endowment. In addition, China made commitments to import more agricultural products from Zambia.

The government’s ability to continue funding social programs like free education, meal allowances for students and increasing the number of beneficiaries and amount received for social cash transfer amidst tight budgetary conditions is an important KPI that was achieved in 2023 which cannot be underplayed.

The New Dawn Government has also been generally been credited with the prudent management of the economy. They have restored budget credibility. There has been improved fiscal discipline and strict control of expenditure, since they took over. The Ministry of Finance and National Planning must be busy preparing the 2023 Budget Performance review and 2024 Budget outlook, which is likely to be presented towards the end of January, as per normal practice, where they will demonstrate this aspect of their economic performance.


The majority of ordinary Zambians’ current perception of the economy is that it is not performing well. Zambian households argue that the cost of living is high, and they lack money in their pockets. They justify this claim by pointing to the high prices of mealie meal, fuel, electricity, interest rates, transport, and high exchange rate.

These claims by citizens seem to be supported by empirical evidence from economic statistical surveys done by various organizations. The government owned Zambia Statistics Agency( Zamstats), for example, has reported inflation to have increased from 9.9% in December 2022 to 13.1% in December,2023. The Jesuit Centre for economic reflection (JCTR) basket of goods for November,2023 was at K9,060.60 compared to K8,982.82 in December, 2022; And the Kwacha depreciated by about 44% % for the twelve months period by closing at K26 to a Dollar on 29 December 2023, compared to K18 in December,2022.

The Zambian Citizens also feel that jobs are difficult to come by because the economy is simply not creating enough jobs due to the low economic activity. And apparently, their claim is supported by the International Monetary Fund who are our current benefactors.

The participation rate in the labour force is low and only 31 percent of the working age population is employed. There are limited employment opportunities, and even among those employed only 27 percent are in formal employment,” IMF wrote in the Zambia Country Report of July 2023.

The Finance and Planning Minister, Dr. Musokotwane is also on record as having acknowledged the lack of jobs in Zambia as a major concern.

Our government feels that the biggest challenge that we have as a country or the biggest challenge that we have is how to create the jobs. Jobs, jobs, jobs. We are not yet doing enough to absorb the number of young people looking for jobs. We are not doing enough,” he told the Chinese Chamber of Commerce in October, 2022, during the 2023 post budget and national development symposium.


The Zambian private sector has not been doing particularly well for most of 2023, for a variety of reasons. And here is the diagnosis. The top most constraint to Private sector growth is the high cost of doing business in Zambia. The term: “high cost of doing business,” is made up many components. These include high interest rates, high fuel prices, high cost of imported inputs, excessive taxation, high electricity tariffs, multiplicity of regulations and licences with their attendant levies. And if indeed the government wants to achieve the 2024 Budget theme of: “Unlocking Economic Potential,” it is vital that they seriously address the above constraints to the growth of the Zambian Private sector.

The evidence of the poor performance of the Private Sector in 2023 was captured in the monthly Stanbic Purchasing Manager’s Index (PMI) Surveys. They showed that for most of 2023, the index was below the 50 threshold, or just marginally above, with the highest reading being 51.4 in May,2023. Any number below 50 indicates poor performance of the private sector activity. The year ended with the PMI of 49.6 for December,2023.

“The latest reading pointed to a renewed decline in the country’s private sector activity, amid widespread reports of money shortages related to currency depreciation and high fuel prices, and lower customer numbers. Although business sentiments plunged to a four-month low, companies were still positive that business activity would pick up over the coming year,” The PMI Surveys stated in two of their reports which was reflective of 2023.


When one makes an objective analysis of the prospects for the Zambian economy, starting from 2024, several factors point to a favourable picture. It is worth enumerating these factors to justify this assertion.

In December,2023, the US Central Bank, the Federal Reserve announced that it will make three interest rates cuts in 2024, and another four cuts in 2025, after increasing interests from 0 to 5.5% since March 2022. The announcement of expected interest rates cuts will not only result in the US Dollar depreciating, but likely to make investors start investing in the Zambian Treasury bills and Bonds thus increase the supply of dollars and the strengthening of the Kwacha.

The other factor that is likely to help the economic recovery of Zambia is the expected increase in copper prices from 2024. Copper prices are forecast to be as high as $15,000 per tonne, due to higher renewable energy targets as countries transition to green energy.

Copper is headed for a price spurt over the next two years, as mining supply disruptions coincide with higher demand for the metal. Rising demand driven by the green energy transition and a decline in the U.S. dollar strength come the second half of 2024 will fuel support for copper prices.” According to CNBC, quoting BMI, a Fitch Solutions research unit. “Copper prices are set to soar more than 75% over the next two years amid mining supply disruptions and higher demand for the metal, fuelled by the push for renewable energy.

It should also be noted that in the first three months of 2024, Zambia is expected to finalize its debt restructuring talks with both Official Creditors and bondholders. The positive impact on the Kwacha and inflation of the conclusion of the debt restructuring talks is confirmed by International rating Agency, Fitch Ratings.

“The completion of the debt restructuring, which we estimate will catalyse foreign investments in Zambia, would enable the kwacha to appreciate in 2024 and 2025, helping to tame inflation. We estimate that CPl inflation will average 8% in 2025,” Fitch said in its ratings report on Zambia.

The Government of Zambia through the Bank of Zambia Act 2022 Section 50 and 73 requires the tracking of exports as announced in Gazette No.1736: “The Bank of Zambia ( Export Proceeds Tracking Framework) Directives,2023. This requires all export proceeds by all exporters including the Mining houses to be banked in Zambia. This is likely to be game changer in stemming illicit financial flows, tax evasion and the increased retention of foreign currency in Zambia and improved balance of payments reporting.


When one analyses the variables and major assumptions about the Zambian economy, the outlook is that the economy will stabilize. The kwacha exchange rate will stabilize,thereby tame the escalating cost of living and cost of doing business. However, millions of jobs to solve youth unemployment will not be created and poverty will not be reduced.This requires a different set of tools to address them.

According credible available statistics, the Zambian economy grew by 4.6% and 4.7% in 2021 and 2022 respectively. The forecast for 2023 is 4.3% and 4.7% in 2024. These rates are insufficient for the country to develop, create jobs and reduce poverty. And the IMF does agree with this assertion.

Despite its abundant resources, growth has been insufficient to lift its young and growing population from poverty. More than 60 percent of Zambia’s population lives below the international poverty line compared to 35% across the Sub Saharan Countries,” IMF said in a statement reviewing the Zambian economy.

This admission by the IMF that Zambia’s growth rates, even under their current supervised Extended Credit Facility (ECF) programs, can neither create the millions of jobs that Zambia needs nor reduce poverty, must be taken seriously. It supports the evidence and past experience that our Cooperating partners, IMF and the World Bank on their own, cannot solve our unemployment and poverty problems. And the reason is simple. The IMF and World Bank’s current tool kit does not have the tools that can produce the double digit economic growth. It can only give us 4-6% growth rates, which are insufficient to reduce poverty. And it is not their fault.

It has been established by studies that in order for economic growth to have any impact on poverty in developing country like Zambia, the country’s economic activities ought to be growing about 10 % or more as China and South East Asia countries proved. And to achieve this growth rates, it requires engagement of experienced local thinkers, who understand Zambia and its culture better. They live and interact with ordinary people who tell them about the practical solutions to solving our economic problems.

The practical reality is that the IMF and the World Bank’s diagnosis of Zambia’s economic problems, and the consequential design of solutions, are based on 10-15% of the economy. And how are they expected to solve our problems when over 85% of the economy is left out in their strategies?

The IMF and World Bank need to be complemented by local practical thinkers,who can design innovative 21st Century solutions that utilize mobile technology and Artificial Intelligence tools and other common sense local initiatives, rather than just 20th Century traditional solutions which are not solving our unemployment and poverty problems.

The plea to the Zambian Authorities, therefore, is that they should start utilizing local thinkers and experts outside government, a bit more from 2024 onwards, rather than over rely on foreign individual Advisors and international institutions. There is a Zambian proverb that states than wisdom and knowledge can come from an anthill  to a mountain. Zambian experts and thinkers are anti-hills in this regard.

The writer is a Chartered Accountant and Author. He is a semi-retired Knowledge and Strategy Advisor. Contact : pmch[email protected].




  1. Management of everything we do is very important, not just do do and blah blah. We need to see meaningful change that would sustain the livelihood of the people and the economy.

  2. Not only management, but effective management of the entire economy. We need statistics that tie to meaning change in society.

  3. Not only management, but effective management of the entire economy. We need statistics that tie to meaningful or rather real change in society.

  4. With this load shedding, things will be bad for the 2024 economy. In PHI, no ZESCO power since morning, and same trend these past few days, even before substation blow up. I was speaking to a friend in Kabangwe Zani muone area, and he said for them, if a calendar has 30 days, that is the way power goes, with completely no action from ERB who think announcing petroleum prices is their core responsibility, I wonder if this ERB has ever done any survey in Zambia to get feedback on various energy issues.

    • @Nelson Phiri. I am baffled every time I hear some empty suit brag that they have ended load shedding…maybe these people live in another Zambia you never know.

  5. “according to the IMF, the Zambian economy was performing quite well,”

    Which should tell everyone what neoliberal economic values are about.

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