Zambia

Zambia has had one of the world’s fastest growing economies for the past ten years, with real GDP growth averaging roughly 6.7% per annum. Zambia’s dependency on copper makes it vulnerable to depressed commodity prices, but record high copper prices and a bumper maize crop in 2010 helped Zambia rebound quickly from the world economic slowdown that began in 2008. Privatization of government-owned copper mines in the 1990s relieved the government from covering mammoth losses generated by the industry and greatly increased copper mining output and profitability, spurring economic growth. Copper output increased steadily from 2004, due to higher copper prices and foreign investment, but weakened in 2014, and Zambia was overtaken by the Democratic Republic of Congo as Africa’s largest copper producer.

Despite strong economic growth and its status as a lower middle-income country, widespread and extreme rural poverty and high unemployment levels remain significant problems, made worse by a high birth rate, a relatively high HIV/AIDS burden, and by market-distorting agricultural policies. Economic policy inconsistency and poor budget execution in recent years has hindered the economy and contributed to weakness in the kwacha, which was Africa’s worst performing currency during 2014. Zambia has raised $3 billion from international investors by issuing separate sovereign bonds in September 2012, April 2014, and July 2015, significantly increasing the country’s public debt as a share of GDP.

Zambia’s economy in 2015 took hits from greatly depressed copper prices and a drought that has caused a significant cut in power generation.