Zambia’s economy is showing renewed momentum as a surge in global copper prices and record domestic output drive the nation’s strongest recovery in years, positioning it as one of Africa’s most promising investment destinations.
The Zambian kwacha climbed 0.7% to ₦22.76 per dollar on Monday — its highest level since February 2024 — extending a rally that has seen the currency appreciate 23% year-to-date, the best performance among African currencies.
The gains reflect renewed investor confidence in Zambia’s mining sector and broader economic stability.
“This rally reflects mounting investor confidence in Zambia’s copper sector recovery following the drought,” said Danny Greeff, Co-Head of Africa Strategy at ETM Analytics. “Provided production momentum continues, the currency has scope for strong medium-term gains.”
Copper Boom Revives Growth Prospects
Zambia is on track to record its highest copper output in history, at a time when production disruptions in Chile and Peru — the world’s top two suppliers — have constrained global supply. The resulting 20% jump in copper prices has strengthened Zambia’s fiscal revenues, supported GDP growth, and improved foreign reserve inflows.
Analysts say the copper windfall offers Zambia a second chance at sustainable growth after years of debt distress and economic stagnation.
“The copper price rally is very supportive for government revenues and GDP growth, and we see a decade of growth ahead much like we saw in 2002,” said James Johnstone, Co-Head of Emerging and Frontier Markets at Redwheel.
The recovery also comes as investors renew commitments to the country’s mining sector. First Quantum Minerals Ltd. and other multinationals are expanding operations, drawn by policy stability and the government’s commitment to increase copper output to 3 million tonnes annually by 2030.
Fiscal and Currency Stability Strengthened
The kwacha’s sustained rally has improved inflation expectations and strengthened investor appetite for local bonds. Foreign portfolio inflows into Zambia’s debt market have risen steadily since mid-2024, following President Hakainde Hichilema’s successful debt restructuring deal with official creditors and progress with the IMF’s Extended Credit Facility program.
Zambia’s government revenues are expected to rise by double digits in 2025, supported by higher mining royalties and export earnings. The World Bank projects GDP growth of over 4.5%, up from 3.2% in 2024, assuming global copper prices remain elevated and power supply disruptions are contained.
Outlook: From Recovery to Resilience
Analysts caution that the rally could pressure non-mining exports and increase import costs if the kwacha appreciates too rapidly. However, the broad consensus remains optimistic: Zambia’s mix of rising commodity exports, macroeconomic reforms, and improving investor sentiment marks a genuine economic turnaround.
“Zambia is entering a period of stability underpinned by disciplined fiscal management and favorable commodity cycles,” said Greeff. “If these trends hold, the country could become one of Africa’s standout economic performers over the next decade.”
With the copper market tightening globally and Zambia’s output accelerating, the country appears poised to translate its mineral wealth into broader economic resilience — signaling a new chapter in its post-debt recovery story.