Zambia is a politically stable, multi-party democracy, rich in natural resources. Zambia’s gross domestic product per capita in 2022 was $1,522, and more than 60 percent of the population lives below the international poverty line of $2.15 per day (the average poverty rate across sub-Saharan Africa is 41 percent). With a population of 19.61 million people, three-quarters of which live in rural areas, (3.1 million people live in the capital Lusaka) Zambia presents a relatively small domestic market that is geographically dispersed across a country slightly larger than the state of Texas. Zambia is one of the world’s youngest countries by median age, and, given its fertility rate (24th highest globally), its population is projected to double by 2050.
From 2000 – 2018 (pre-COVID), Zambia had a robust average annual GDP growth rate above six percent and has been slowly recovering from the pandemic’s economic impact. In 2022, Zambia’s GDP was $29.8 billion, an increase of 4.7 percent – following 4.6 percent growth in 2021. The mining sector constituted 12.9 percent of GDP in 2022 but accounted for only 2.4 percent of total employment. While 75 percent of Zambians work in agriculture, the sector comprised only 3.9 percent of GDP in 2022. Trade, the largest sector, comprised 20 percent of GDP, followed by construction (14 percent), manufacturing (10 percent), and transport (9 percent). Despite comprising only 2.5 percent of GDP in 2022, the Information and Communication Technologies (ICT) has been Zambia’s fastest growing sector since 2011. Zambia’s fiscal year ends December 31.
After defaulting on a Eurobond payment in November 2020, in December 2021, Zambia and the International Monetary Fund (IMF) reached agreement on a $1.4 billion, three-year, extended credit facility program to help restore macroeconomic stability and promote inclusive economic recovery. Simultaneously, Zambia began the process of restructuring its debt under the G20 Common Framework. While official creditors have reached agreement on restructuring Zambia’s bilateral debt, negotiations to restructure its privately held debt on terms comparable to those availed by official creditors are ongoing. Due to Zambia’s debt crisis and the IMF program’s borrowing constraints, the government’s ability to attract or financially support new investments is highly constrained.
Zambia has liberalized prices on goods and does not have currency controls. With an annual average exchange rate of 16.9 Kwacha (ZMW) per U.S. dollar in 2022, the Kwacha appreciated by 18 percent compared to its 2021 average exchange rate. In 2022, Zambia’s central bank, the Bank of Zambia, averaged 3.8 months of hard currency import cover. In 2022, annual inflation averaged 11 percent – down from 22 percent in 2021.
Zambia’s exports are dominated by copper ($7.7 billion), which comprised 76 percent of total export earnings in 2022. All other mining products and byproducts, including precious stones, totaled less than eight percent. Zambia’s second largest single export category (salt, sulphur, stone, plaster, lime, and cement) comprised only 2.7 percent of 2022 exports earnings. In 2022, Switzerland was Zambia’s largest export destination (38 percent of total exports). However, this is because many mineral commodity traders are located in Switzerland, rather than bilateral trade in goods and services. The People’s Republic of China (PRC) was Zambia’s second largest export destination (18.2 percent), followed by the Democratic Republic of the Congo (DRC) (18.1 percent), and Singapore (7.7 percent).
In 2022, Zambia’s top five imports were industrial machinery ($992 million; 15 percent of total imports), oil and mineral fuels ($721 million; 11 percent), motor vehicles and parts ($706 million; 10.9 percent), fertilizer ($437 million; 6.8 percent), and plastics ($401 million; 6.2 percent). Its primary sources for imports in 2022 were: South Africa (30 percent), PRC (15.5 percent), and the United Arab Emirates (7.5 percent).
Zambia’s imports from the United States in 2022 totaled about $135 million and comprised about three percent of its total imports. Albeit with fluctuations, U.S. exports to Zambia have grown steadily since 2010, reaching a peak of $195 million in 2018. The top three U.S. exports to Zambia in 2022 were machinery ($65.2 million; 48 percent of U.S. total exports to Zambia), vehicles ($28 million; 20 percent), and rubber ($18 million; 13 percent). Zambia’s exports to the United States also totaled $135 million (0.46 percent of total exports) and were primarily comprised of refined copper, precious stones, and coffee.
Political Environment
For background information on the political and economic environment for Zambia, please click on the link to the U.S. Department of State Countries & Areas website.