Zambia Is Making Progress On Cost Of Living

The country expects its economy to grow at 6 per cent this year

Zambia's government started this year with a strong commitment to revitalising its economy, which is driven by its resources sector. At a recent event on the country's economic outlook in Lusaka, Zambia's finance minister Situmbeko Musokotwane told the audience that 2025 would likely be a year of solid revival in the mining industry, which he forecasts will be 'getting stronger and stronger each year going forward.'

This reinforces President Hichilema's commitment to triple copper production to 3 million tonnes by 2031 to meet growing global demand. Zambia is the eighth largest metal producer, a vital manufacturing component for renewable energy and electric cars.

The country expects its economy to grow at 6 per cent this year, partly due to recent investments by Chinese and Western mining companies expanding their operations there.

Despite the positive outlook for the mining sector, Zambia has faced some significant external challenges that have impacted economic growth more widely.

The country has been hit by the worst drought in recent history, which has driven up food prices and badly affected the staple maise crop.

Zambians are also experiencing record fuel prices at the pumps due to the weakness of the currency, and frequent blackouts persist due to the drought, which has dried

up the Kariba dam, responsible for 85% of the country's electricity production.

Inflation is at a three-year high of 16 per cent, and Zambian households are feeling the pinch as they struggle to make ends meet and put food on the table.

The government has proactively tackled food insecurity and reduced prices in the short term. To this end, it sourced maise directly from domestic producers to bolster the state's food reserves. The maise was then released into the market to stabilise the price and ensure a steady supply of the crop.

However, the government has been looking to address supply issues to avoid future long-term constraints. It secured foreign investment to build more fertiliser

factories in the country are expected to cut the cost of fertiliser by 30 per cent and increase production significantly.

In addition, the Government's new Comprehensive Transformation Support Programme (CTSP) will assist farmers in accessing finance and help with irrigation, storage, and other logistics to modernise and increase capacity in the sector.

The country's reliance on hydroelectricity has shown that it is particularly vulnerable to the impacts of climate change, with droughts expected to become more frequent in the coming years. The government has diversified energy production to reduce this risk, notably through expanding renewable energy.

Foreign investment is playing its part in this expansion, with the UK pledging $3.1bn of private sector investment for the Zambian renewable energy industries and the mining sector. The country has also looked at more innovative ways of increasing access to electricity, with the launch last year of the Energy Demand Stimulation (ZESI). This plan is to power 1,000 mini-grids across Zambia through solar energy and is estimated to benefit over 100,000 people, including businesses, schools, and hospitals.

These measures are a good start, but the Government must implement its plans to generate economic growth if it is to improve the situation for Zambians. The country's demographic balance is young, with 72% of the population under 30, who are markedly more well-educated and entrepreneurial than previous generations.

This is very positive, but they remain frustrated by the current economic outlook, with three-quarters citing the poor economic situation as their primary concern and the rising cost of living. These are common challenges across the continent, as evidenced by the protests that rocked Kenya, Nigeria, and Uganda last year.

If President Hichilema is to bring about the promised 'new dawn', he must continue to make good on his commitment to: