Zambia

Zambia enters 2026 as a recovering frontier economy that has decisively turned the corner on its 2020 default. Growth slowed to 4.0% in 2024 under a historic drought but the IMF's October 2025 outlook projects a rebound to 5.8% in 2025 and 6.4% in 2026, with inflation easing from ~14.2% toward ~9.2% as the kwacha strengthened roughly 23% over the prior year to about 17.9 per dollar by mid-2026. The Bank of Zambia has begun cutting, lowering its policy rate to 13.5% in February 2026. Crucially, the IMF completed the sixth and final review of its Extended Credit Facility on 27 January 2026, capping a multi-year stabilization.

The thesis is copper as a critical-minerals supercycle play. Output reached ~890,000 tonnes in 2025 and the government's National 3MT Strategy targets 3 million tonnes a year by 2031 — ambitious, with independent analysts modelling a 1.5-2.0m tonne base case. The pipeline is real: First Quantum's Kansanshi S3 expansion, Barrick's Lumwana super-pit, Vedanta's recapitalization of Konkola Copper Mines, and the headline KoBold Metals-ZCCM Mingomba JV (~$2.3-2.5bn, groundbreaking April 2026). Zambia's distinctiveness is the combination of completed debt treatment under the G20 Common Framework, a reform-minded government, and a resource squarely in the path of global electrification demand.

The defining risk is energy: Zambia draws over 80% of its electricity from hydropower, and the 2024 drought cut Lake Kariba's usable storage to under 3%, forcing load-shedding of up to 21 hours a day in 2025 — a direct cap on mining output and the single biggest threat to the 3MT ambition. Compounding factors include a debt stock still assessed as sustainable but at high risk of distress despite restructuring, heavy fiscal leverage to a single commodity, and election-year uncertainty ahead of the 13 August 2026 general election.