Zambia’s Economy Set for a Solid Finish in 2025 – But Risks Require Careful Management
As Zambia enters the final fiscal leg and last quarter of year 2025, the economy appears well-positioned to close the year on a firm footing. Key indicators suggest that growth momentum will remain strong, inflation will continue easing, and the overall macroeconomic environment will stay relatively stable.
The favorable performance of the mining sector, buoyed by sustained copper prices and expanding investments in energy transition minerals such as lithium, manganese and nickel among many others, will remain the major driver of output and export earnings.
This momentum has been reinforced by a stable exchange rate environment and a stronger balance of payments position, underpinned by improved investor sentiment and fiscal discipline under the IMF Extended Credit Facility (ECF) program.
The agriculture sector, which suffered setbacks from the 2024 drought, is expected to rebound as improved weather patterns, irrigation support and input access restore rural productivity.
This recovery is essential not only for food security but also for easing food-driven inflation pressures, which have been a major source of household strain.
The energy sector continues to evolve as a key enabler of industrial growth. With the addition of new solar projects such as the 100 MW Chisamba Solar Power Plant and gradual normalization of hydro generation, Zambia’s energy security is improving.
Reduced load management in the fourth quarter will likely sustain output in manufacturing, mining, and small enterprises that were previously constrained by power shortages.
However, while the near-term outlook is encouraging, several risks remain.
Global copper price volatility, exchange rate pressures, and fiscal spending imbalances could threaten the recovery path.
The government must continue implementing prudent fiscal measures, maintaining monetary stability, and ensuring that new debt is strictly channeled into growth-enhancing infrastructure rather than consumption.
Additionally, Zambia’s SME and private-sector growth must be strengthened to convert macroeconomic stability into broad-based prosperity.
The upcoming K5 billion credit guarantee scheme from the Bank of Zambia in 2026 will be a welcome catalyst if well-managed, but complementary measures such as access to affordable finance, digital inclusion, and skills development are equally critical.
In summary, Zambia’s fourth quarter of 2025 is projected to be one of the strongest in recent years, reflecting the combined impact of disciplined fiscal management, sectoral recovery, and improved investor confidence.
The key priority now is to sustain these gains, mitigate vulnerabilities, and translate macro-level improvements into tangible livelihoods for households and businesses.
