Zambia on Steady Path to Economic Recovery

Mungule says Kwacha Gains and Growing Confidence Signal Zambia’s Recovery Momentum

By Francis Maingaila 

Lusaka, Zambia24 - (24 June 2025) – Zambia’s economic recovery is gaining momentum, supported by a combination of favorable domestic policies and external factors, according to Dr. Oswald Mungule, President of the Economics Association of Zambia (EAZ).

Dr. Mungule said Zambia is emerging from recent economic challenges with a more stable and resilient outlook. He pointed to a strengthening fiscal position, improved macroeconomic indicators, and increased investor confidence as signs of a steady recovery. 

Strong tax inflows have enhanced government liquidity, allowing for the continued implementation of national development programmes and public service delivery.

He noted that the recent appreciation of the Kwacha, driven by a weakened U.S. Dollar and increased foreign exchange inflows from mining exports and tax payments, is easing pressure on the exchange rate and stabilizing the market. This, he said, is a sign of renewed confidence in the local economy and currency.

Dr. Mungule further cited the agriculture sector as a key driver of recovery, especially in the aftermath of a severe drought. Improved crop yields have raised rural incomes, reduced the country’s dependence on food imports, and contributed to a positive trade balance.

The Bank of Zambia’s prudent monetary policy has helped contain inflation while supporting broader economic stability. At the same time, reduced fuel and diesel prices have lowered the cost of transportation and production, bringing relief to businesses and consumers.

He said demand for the Kwacha in domestic and trade transactions reflects growing economic optimism, while lower import demand for essential commodities like grain and energy has preserved foreign reserves and reduced external vulnerability.

Despite the progress, Dr. Mungule acknowledged that external risks remain. He warned that rising global tensions—particularly the conflict involving the U.S., Israel, and Iran—could affect international oil prices and trade flows. 

However, he expressed confidence in Zambia’s resilience, citing ongoing regional investment partnerships, structural reforms, and local value-chain development as key to insulating the economy from future shocks.

“Zambia is on a solid path to economic recovery. The alignment of positive indicators—fiscal strength, currency stability, and improved productivity—offers a unique opportunity to consolidate gains and build a more inclusive, resilient economy,” Dr. Mungule said.