Zambia's Economic Growth Expected to Reach 6.4% in 2026, According to Latest Projections

Zambia expects economic growth to increase to 6.4% next year, according to a report by Reuters. The country's economy has been facing challenges due to a decline in copper prices and a drop in the value of the Zambian currency. However, with the recent recovery in copper prices, Zambia is optimistic about its economic prospects. The government has taken steps to diversify the economy and reduce its dependence on copper mining. The country's economic growth is expected to be driven by an increase in agriculture and manufacturing sectors.

Zambia's economic prospects are looking up, with the country expecting a significant acceleration in growth next year. According to a Reuters report [2], economic growth in Zambia is projected to reach 6.4% in 2026, up from 5.8% in 2025. This growth is primarily driven by the mining and agriculture sectors, which have been recovering from the effects of a severe regional drought.

The Zambian government has been actively working to stabilize the economy and diversify its revenue streams. In a recent cabinet meeting, the country set a target to achieve an annual economic growth rate of at least 6% by 2028 [1]. This plan includes reducing the inflation rate to single digits, increasing domestic revenues by more than 22% per year, and limiting net domestic borrowing to 1.7% per year.

The rebound in copper prices and the recovery of the agriculture sector have contributed significantly to this economic turnaround. Copper, which is Zambia's primary export, is expected to see a production increase to over 1 million tons annually by 2026 [3]. Additionally, the agriculture sector has shown strong growth, with crops like maize and soybeans rebounding after the drought.

The Zambian currency, the kwacha, has also shown resilience, appreciating by 12% against the USD since late 2024 [3]. This appreciation reduces import costs for mining equipment and operational expenses, boosting profit margins for the mining sector.

The government's focus on small and medium enterprises (SMEs) is also expected to drive economic growth. A $70 million SME funding initiative, backed by international development banks, is channeling capital into agribusiness and mining supply chains. These SMEs are positioned to capture value from the copper boom and agricultural recovery.

Investors are taking notice of Zambia's economic turnaround. The country's current account deficit narrowed to 2.3% of GDP in 2024, while foreign reserves hit $4.7 billion, enough to cover 4.1 months of imports [3]. The government's 2025 Investment Climate Reform Agenda aims to streamline business registration and improve access to credit, further enhancing the investment environment.

While Zambia's economic prospects are promising, investors should remain cautious about potential risks. The country's debt-to-GDP ratio remains high at 47%, and copper price volatility could impact mining profits. Additionally, infrastructure gaps, such as poor roads and energy shortages, still hinder SME growth.

In conclusion, Zambia's economic growth is expected to accelerate significantly next year, driven by the recovery of the mining and agriculture sectors and a strengthening currency. The government's macroeconomic reforms and focus on SMEs are also contributing to this growth. While risks remain, the country's trajectory of macroeconomic stabilization and rising foreign direct investment (FDI) confidence suggests that it is a market worth watching. Investors seeking exposure to frontier economies should consider gradual allocation to Zambian equities, currency instruments, or SME-focused funds.

References:
[1] https://360mozambique.com/world/africa/zambia-sets-goal-of-annual-economic-growth-of-at-least-6-by-2028/
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_L1N3TI06R:0-zambia-sees-economic-growth-picking-up-to-6-4-next-year/
[3] https://www.ainvest.com/news/zambia-economic-renaissance-copper-currency-rise-small-business-opportunity-2507/