Country Report Zambia August 2017

Country Report Zambia August 2017

  • August 2017 •
  • Report ID: 1698224 •
  • Format: PDF

Outlook for 2017-21

  • Creeping authoritarianism and tensions between pro- and anti-government supporters will keep political tensions at fever-pitch throughout the forecast period. There will be frequent bouts of violent unrest.
  • The government will adopt an economic policy of austerity with the scrapping of consumer subsidies, most notably for electricity, while protecting pro-poor spending under a loan facility with the IMF.
  • Monetary policy will be loosened in 2017-18 as inflation remains well within the central bank's medium-term target range, followed by a period of stasis and then tightening in 2021 as price pressures rise.
  • Real GDP growth will average 3.6% a year in 2017-21 (down from an annual average of 7% in 2000-14) as fiscal austerity, subdued copper prices and infrastructure constraints weigh on the pace of expansion.
  • Inflation will settle at an annual average of 6.9% in 2017-18 as subsidies are lifted. The rate will then ease to an average of 6.5% in 2019-20 as the impact of this fades. Election related spending will see the rate edge up in 2021.
  • The current-account deficit will narrow from an estimated 4.4% of GDP in 2016 to a surplus of 0.7% of GDP in 2019 as exports rise. The account will then fall back to a deficit as oil prices rise and copper prices fall from peak levels.


  • The president, Edgar Lungu, is to meet with Hakainde Hichilema, the leader of Zambia's largest opposition party, to reach an agreement on defusing tensions between the two. Treason charges against Mr Hichilema have been dropped, but the threat of rearraignment hangs over him.
  • Saviour Chishimba, the leader of another opposition party, was arrested and charged with defaming the president after openly censuring his decision to invoke emergency security powers. He was released around a week later.
  • The central committee for the Patriotic Front has endorsed Mr Lungu as its candidate for the 2021 general election. At the same time, it expelled a founding member of the party, Chishimba Kambwili, who had been critical of the president's early focus on another term in office.
  • Zambia's energy utility, Zesco, has unveiled a plan for investing billions of US dollars in enhanced electricity generation and transmission over the next five years, with private direct investment playing a central role.
  • The state-run food reserve agency has lowered the minimum floor price it will pay for maize, and has also cut the amount it will buy in 2017/18 (May-April) by half in an attempt to save costs for the Treasury and stimulate more private-sector activity in the grain market.


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