Zambia’s economy has shown resilience despite last year’s drought, buoyed by record maize yields and strong mining output, according to a statement from the International Monetary Fund (IMF).
Economic activity continues to grow, and inflationary pressures have eased in 2025, with GDP expanding 4.5% in the first half of the year.
The IMF said that program implementation is making progress, although challenges persist, and authorities are pushing forward with legislative reforms aligned with program commitments, Market Forces Africa reports.
During meetings with Zambian authorities, the IMF team, led by Mercedes Vera Martin, reviewed recent economic developments and discussed policy priorities under the country’s program supported by the Extended Credit Facility (ECF) arrangement.
“The IMF team held constructive and productive discussions with the Zambian authorities on recent economic developments and policy measures needed to advance reforms under the ECF-supported program,” Martin said.
“The Zambian economy has demonstrated resilience amid last year’s drought, with real GDP growth at 3.8% in 2024 and 4.5% in the first half of 2025, boosted by a record-high maize harvest and mining production.”
She went on to add: “Real GDP growth is projected at 5.2% and 5.8% in 2026, respectively, as limited hydropower generation and periodic load management would continue to weigh on non-mining economic performance. Inflationary pressures are easing, supported by lower fuel and food prices, exchange rate appreciation, and the impact of tight monetary policy.
“Preliminary data show a current account deficit of 2.0% of GDP in the first half of 2025, resulting from lower official grants, partly reflecting the unwinding of drought-related support, and a broad-based increase in imports.”
Furthermore, liquidity conditions have strengthened in Zambia, investor interest in government securities has stayed high, and strong private sector lending has bolstered the manufacturing, agriculture, and energy industries.
Progress has also been made in implementing the program, though challenges persist. Authorities are moving forward with legislative reforms aimed at enhancing financial sector supervision, improving the oversight and governance of state-owned enterprises, and reinforcing the anti-corruption framework, in line with program commitments.
Moreover, discussions also addressed reforms to enhance competition, strengthen the role of the private sector in agriculture, and advance the implementation of the open-access framework for the Tazama pipeline according to approved guidelines.
The authorities reiterated their firm commitment to policies that maintain macroeconomic stability and support sustained growth, with fiscal consolidation efforts set to continue.
Maintaining this momentum will be crucial for boosting confidence, rebuilding safeguards to mitigate vulnerabilities, and ensuring that the gains from renewed stability benefit all Zambians, Martin concluded.