Zambia is showing promising signs of recovery after navigating turbulent years of economic challenges. With the new president at the helm, the country is on a path of renewal and progress, according to Duncan Bonnett, a partner at Africa House. "Despite lingering obstacles, the Zambian government's collaboration with the private sector and its commitment to rectify past mistakes are garnering attention as the nation strives to overcome its hurdles," he told Freight News.After becoming the first country in Africa to default on its sovereign debt in 2020, the Zambian government has been hard at work to restore fiscal sustainability. Bonnett said the new leadership had proactively forged partnerships with the private sector, recognising its vital role in driving economic growth and development. This is positioning Zambia favourably on its journey toward stability."However, one of the most pressing challenges still gripping the nation is the overwhelming debt burden," he said, indicating the legacy of the previous administrations' ambitious infrastructure projects continued to cast a shadow. "The country is still grappling to repay loans taken during those periods. The expenditure on what some have labelled as "white elephant" projects has contributed to this fiscal dilemma. The weight of this debt not only hampers service delivery but also exerts pressure on the exchange rate, further complicating the recovery process."Bonnett said despite these obstacles, Zambia was determined to regain control of its economic trajectory. "Efforts are under way to reverse the negative trends and bring a more sustainable approach. The new administration's emphasis on prudent spending and strategic investments indicates its commitment to altering the course of the nation's f i na ncia l f ut u re."According to the African Development Bank , GDP is projected to grow 4% in 2023 and 4.2% in 2024, underpinned by the continued recovery in mining, services, and manufacturing; higher global copper prices; and the market confidence associated with ongoing fiscal consolidation measures. A slight uptick in real GDP per capita growth is projected to be 1.2% in 2023 and 1.4% in 2024. Inf lation is projected to decline to 8.5% in 2023 and 7.1% in 2024, within the 6%–8% target range. Upside risks include higher fuel prices, electricity tariffs, and global fertiliser prices. The fiscal deficit is projected to persist at 8.1% of GDP in 2023 and 7.3% in 2024, owing to increased social spending."Zambia's debt remains its biggest challenge," said Bonnett. "This continues to hamper its efforts, although it must be said that the country is moving in the right direction and that there is a real sense of renewal and commitment from the current government."He said the outlook was reasonably optimistic for the next few years.
