Zambia’s Economy Surges in 2025: Strong Sectoral Growth Signals Recovery & Resilience
Zambia’s economy has entered a dynamic recovery phase, with real GDP growth projected optimistically at 5.8–6.6% for the 2025 fiscal year. This marks a sharp rebound from 2024’s sluggish yet steady development, which unexpectedly recorded a 4% growth despite strong headwinds experienced in the past calendar year.
Key Sector Highlights
Agriculture, Forestry & Fishing: Output surged by an annualized 74% in Q1 2025, restoring rural incomes and contributing +3.9 percentage points to GDP.
Mining & Quarrying: Achieved 16.5% growth in Q1 2025, with a 30% increase in mineral output—driven by expanded copper production and major capital investments. The sector now comprises around 22% of GDP.
ICT: The digital economy remains a key strategic driver, with ICT expanding between 16–17%, strongly supported by enhanced internet coverage and financial inclusion initiatives.
Accommodation, Food & Tourism: Sector growth of 27.6% in Q1 reflects robust rebounds in both international tourism and domestic travel.
Energy & Utilities: Recovery efforts continue with the commissioning of a 100 MW solar power plant in Chisamba, mitigating hydropower shortfalls and reducing load shedding.
Financial & Business Services: This sector is expanding, thanks to digital banking and SME credit, although Q1 growth has slightly softened.
Economic Challenges Remain
Inflation & Currency Volatility: Inflation has eased from ~16% in early 2025 to 14.1% in June but remains high, with continued vulnerability in the kwacha. The currency’s strength depends heavily on copper prices and stable electricity production.
Debt Restructuring & Fiscal Constraints: Ongoing sovereign debt restructuring limits public investment capacity, especially in agriculture, health, and infrastructure.
Environmental & Infrastructure Pressures: Damage from a mid-2025 mining tailings dam incident and historic power outages underscore environmental and utility risks.
Outlook and Strategic Path Forward
Zambia’s 2025 economic revival is driven by strong performances in agriculture, mining, ICT, and tourism. The energy diversification strategy—anchored by solar projects, is reducing reliance on hydropower.
Both Q3 and Q4 look challenging. However, Q3 benefits from fewer unified import demands, complemented by positive tailwinds such as multilateral support, a declining dollar, and reductions in oil and fat prices.
Meanwhile, Q4 typically presents more challenges for Zambia, particularly due to increased purchases, stocking schedules, and a surge in input-driven imports.
To maintain momentum, Zambia must:
- Deepen energy and infrastructure investments, focusing on renewables.
- Strengthen fiscal frameworks through a strategic debt resolution path.
- Empower the private sector, especially SMEs in agriculture, ICT, and tourism.
- Enhance climate resilience and environmental safeguards across industries.
With well-coordinated policy reforms and focused investments, Zambia stands poised to translate sector gains into sustainable and inclusive economic growth.
