Discusses key economic indicators and trade statistics, which countries are dominant in the market, and other issues that affect trade.
Zambia is a politically stable, multi-party democracy, rich in natural resources, with an estimated population of 18.38 million, 42 percent of which live in urban areas. While the country experienced two decades of positive economic growth and a corresponding expansion of the middle class, Zambia saw a 2.8 percent contraction in GDP in 2020 owing to a combination of unsustainable government debt, a series of droughts affecting agricultural production and power generation, and knock-on effects from the COVID-19 global pandemic. Zambia is currently in default on the majority of its roughly $31 billion in public sector debt and is actively seeking comprehensive debt restructuring. Zambian voters, frustrated with the country’s economic performance, elected opposition candidate President Hakainde Hichilema to a five-year term in office in August 2021. Hichilema, who also holds a decisive majority in the National Assembly, campaigned as a pro-business candidate and has outlined an ambitious agenda to address longstanding structural weaknesses through macroeconomic reforms guided by an IMF program. According to the IMF, the economy grew 4.3 percent from a low base in 2021 and is forecast to grow by 3.1 percent in 2022. The World Bank in July 2022 re-classified Zambia as a lower income country (after achieving middle income status in 2011) due to a deterioration of gross national income per capita estimates recorded in 2021.
The Zambian economy enjoys liberalized prices on most items and does not have currency controls. Its main export partners in 2021 were Switzerland (due more to the location of commodity traders, rather than actual exportation), China, Singapore, the Democratic Republic of the Congo (DRC), and Luxembourg. During the same period, Zambia’s main import partner was South Africa, followed by China, the United Arab Emirates, India, and Japan. In 2021, Zambia imported $94.1 million in goods from the United States. The United States exported $94.1 million in goods to Zambia in 2021, down from a peak of $195.4 million in 2018. Zambia exported $175.3 million in good to the United States in 2021, also down from a 2018 peak of $189.6 million. Zambian imports of American products consisted primarily of machinery, rubber, and vehicles. Zambian exports consisted almost entirely of copper, cobalt, precious stones (primarily emeralds), and cotton. While estimates of trade in services are unavailable, Zambia relies heavily on the United States and Europe for exports of tourism services in extensive network of national parks and the United States is competitive in consulting and financial services. The United States has signed a trade and investment framework agreement with the Common Market for Eastern and Southern Africa (COMESA), of which Zambia is a member.