Zambia

Zambia had one of the world’s fastest growing economies for the ten years up to 2014, with real GDP growth averaging roughly 6.7% per annum.

Zambia’s lack of economic diversification and dependency on copper as its sole major export makes it vulnerable to fluctuations in the world commodities market and prices turned downward in 2015 due to declining demand from China; Zambia was overtaken by the Democratic Republic of Congo as Africa’s largest copper producer.

Poor management of water resources has also contributed to a power generation shortage, which has hampered industrial productivity and contributed to an increase in year-on-year inflation to more than 20% in 2016. Zambia’s currency, the kwacha, also depreciated sharply against the dollar through 2015-16, leading the central bank to restrict lending. Rampant spending in recent years has increased the fiscal deficit—over 8% in 2015—and may encourage the government to seek external financing from the IMF to fund the shortfall.

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