Zambia Urgently Needs De-Risking Industrial Production
Zambia’s economy is at a critical juncture. The nation’s import bill remains significantly higher than its export earnings, creating a persistent and serious imbalance that places undue pressure on the exchange rate and fuels imported inflation.
This situation leaves the kwacha so vulnerable and constrains the country’s capacity to sustain foreign exchange reserves.
South Africa continues to dominate Zambia’s import market, benefiting from a dual production model designed both for their domestic consumption and for export competitiveness.
This has enabled South Africa to capture a substantial share of regional markets, while Zambia remains import-dependent and consequently exposed to external economic conditions.
This pattern highlights the urgent need for Zambia to remodel its economic architecture towards a production-first approach. Such a shift requires deliberate efforts to:
- Strengthen local manufacturing and agro-processing industries to reduce reliance on imports.
- Invest in infrastructure, particularly energy and logistics, to lower production costs and enhance competitiveness.
- Drive value addition in mining and agriculture, ensuring that natural resources generate broader economic benefits.
- Establish supportive policies and incentives that link private sector growth directly to export performance and local supply chain development.
Failure to implement structural reforms will entrench Zambia’s vulnerability to external shocks and limit prospects for sustainable development.
However, with a production-oriented model, the country can stabilize its macroeconomic environment, boost exports, create employment and chart a path toward inclusive growth.
