Zambia’s Economy Stabilizing, Poised for Growth – Dr. Haabazoka Gives Three-Year Forecast

Zambia’s Economy Stabilizing, Poised for Growth – Dr. Haabazoka Gives Three-Year Forecast

Zambia’s economy is emerging from a difficult recession and entering a phase of stable, moderate growth, with prospects for a new boom on the horizon this, according to economist and former EAZ president Dr. Lubinda Haabazoka, who has projected over 6% economic growth in the next three years if key fundamentals are maintained.

In a detailed economic outlook shared this week, Dr. Haabazoka mapped Zambia’s economic journey using a three-phase model: boom, recession, and neutral growth. He noted that the country is currently in the neutral growth phase, having recovered from the worst effects of a recession triggered by external shocks, excessive borrowing, and macroeconomic mismanagement.

“We are no longer in a recession,” Dr. Haabazoka affirmed. “But we are not yet in a boom. We are in a transitional period where macroeconomic indicators are stabilizing.”

Zambia’s previous boom, he explained, peaked around 2016 following aggressive public infrastructure spending and increased liquidity. However, this momentum was lost as droughts, power shortages, and ballooning debt obligations piled pressure on the economy. The  pandemic delivered a final blow, leading to a technical default in 2020 and economic contraction.

Following that downturn, Zambia embarked on a debt restructuring programme under the G20 Common Framework. The restructuring has now restored a degree of credibility in the global financial system. Indicators such as inflation, interest rates, and exchange rates the “economic holy trinity,” as Dr. Haabazoka calls them—are slowly stabilizing.

Notably, Zambia’s foreign exchange reserves have surged past $4.2 billion, the highest in over 15 years, while inflation has started to ease and the kwacha has shown signs of resilience despite seasonal vulnerabilities.

Dr. Haabazoka warns, however, that growth is still vulnerable to external and structural risks. These include rainfall patterns, international oil prices, power supply, and the performance of the mining sector, which remains Zambia’s largest source of foreign currency. He added that debt servicing pressures could still weigh on the local currency, especially during high-demand months between September and December.

To sustain recovery, Dr. Haabazoka recommends that the Bank of Zambia maintain its tight monetary policy while the government focuses on expanding public-private partnerships (PPPs) to reduce reliance on foreign borrowing for infrastructure development.

He also called for tax relief for businesses and households to stimulate domestic production, urging policymakers to adopt a domestic business growth agenda anchored on exports.

“Our politics must stop interfering with the economy,” he stressed. “Nation-building requires long-term discipline, not five-year cycles of economic disruption.”

Looking ahead, Dr. Haabazoka believes Zambia is on track to record over 6% growth annually in the next three years—ceteris paribus—if reforms are maintained and key sectors like mining, agriculture, and energy receive targeted support.

Above all, he called for a mindset shift among citizens, away from constant politicking and toward wealth creation and entrepreneurship.

“Politics should be a once-every-five-years affair,” he concluded. “We need to build a nation focused on growth, stability, and long-term prosperity.”

June 30, 2025
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