However, significant risks remain from high debt levels, fiscal pressures and reform fatigue, according to a new International Monetary Fund (IMF) assessment.
In its latest country report released in early 2026, the IMF projects Zambia’s economy to grow by about 6% this year, keeping it among the fastest-growing economies in sub-Saharan Africa.
Growth is being driven by strong copper production, improved rainfall supporting agriculture and a gradual recovery in private sector confidence following debt restructuring agreements.
The Fund notes that Zambia has made progress in restoring macroeconomic stability since securing an IMF-supported programme in 2022. Inflation has eased from earlier peaks, the exchange rate has stabilised, and external financing conditions have improved. These gains, however, remain fragile and depend on continued policy discipline.
Public debt remains a central concern. Although Zambia concluded major debt restructuring deals with official and private creditors, debt service obligations are set to rise again over the medium term. The IMF warns that limited fiscal space continues to constrain spending on health, education and social protection, even as demands from a growing population increase.
Fiscal consolidation remains a priority. The report calls on authorities to strengthen domestic revenue mobilisation, improve tax compliance and reduce reliance on borrowing. It also urges tighter control of expenditure, particularly subsidies and transfers to state-owned enterprises, which continue to pose fiscal risks.
The IMF highlights the importance of structural reforms to sustain growth beyond the mining sector. Improving electricity supply, reducing policy uncertainty and strengthening the business environment are seen as critical to attracting investment into manufacturing, agriculture and services. The report also points to the need for governance reforms to enhance transparency and accountability in public finance management.
Social pressures remain high. While inflation has slowed, living costs continue to weigh heavily on households, especially in urban areas. The Fund stresses the importance of protecting social spending and better targeting support to vulnerable groups as fiscal adjustment continues.
Looking ahead, the IMF concludes that Zambia’s economic outlook is positive but vulnerable. Sustained reform implementation, prudent debt management and diversification away from copper will be key to ensuring that current growth translates into durable and inclusive development for the country and the wider region.
–IMF/ChannelAfrica–
