Zambia’s Economy Rebounds: Growth Projections Surge Amidst Drought Recovery

Zambia is poised for a remarkable economic resurgence, with projections indicating a 6.6% expansion in 2025. This marks the fastest growth since 2012, a testament to the country’s resilience in the face of recent challenges.

In his budget presentation on Friday, Finance Minister Situmbeko Musokotwane outlined these optimistic forecasts, echoing estimates made by the International Monetary Fund (IMF). “The 2025 budget is predicated on economic recovery and promoting growth to enhance the livelihoods of our people,” Musokotwane declared.

This year Zambia’s economy is expected to grow by a more modest 2.3%. The stark contrast between the two years can be attributed to the devastating effects of the El Niño phenomenon. The drought, the worst in over a century, severely impacted agriculture and energy production, leading to widespread power outages and economic disruption.

The drought struck Zambia at a particularly vulnerable time, as the government was grappling with the aftermath of a debt restructuring process. In response to the crisis, Musokotwane was forced to revise the 2024 budget, allocating significant resources for drought relief efforts.

The IMF has bolstered its financial support to Zambia, providing an additional $388 million. The government has also sought assistance from the World Bank. With the anticipated arrival of La Niña, which typically brings more favourable rainfall, Zambia is expected to benefit from improved agricultural yields and hydropower generation.

However, the economic strain caused by the drought and debt restructuring has widened the budget deficit to 6.4% of GDP in 2024. The government aims to reduce this deficit to 3.1% of GDP in 2025 as the economy stabilizes and grows.

As Zambia emerges from the shadow of recent challenges, the country’s economy is looking to regain a path to sustainable growth. With hopes pinned on a return to normal weather patterns and continued international financial support, Zambia’s future appears increasingly bright.