Zambia’s campaign against inflation gained momentum in August, with the country posting its lowest annual rate in more than two years, signaling that currency strength and favorable commodity prices are easing pricing pressures.
Acting Statistician-General Sheila Mudenda reported that consumer prices rose 12.6% in August, compared with 13% in July.
Food inflation, the main driver of household spending pressures, fell to 14.9% from 15.3% the previous month, while non-food inflation slowed to 9.3% from 9.7%.
Monthly costs increased by just 0.5%. The decline comes as Zambia, Africa’s second-largest copper producer, benefits from a surge in copper prices.
The Bank of Zambia projects inflation will return to its 6–8% target range by the first quarter of 2026, with an average rate of 13.3% expected in 2025.
If the kwacha continues to perform strongly and copper prices remain high, the government could enter a much-needed period of price stability, supporting economic growth and easing the burden on consumers.
Don’t Miss This:
Zambia Set For Fastest Economic Growth Since 2021, Says Finance Minister
The global demand for Zambia’s copper has lifted the kwacha, which Bloomberg forecasts will strengthen by more than 19% against the U.S. dollar by 2025, making it one of the world’s best-performing currencies.
The stronger currency has reduced the cost of imports, from fuel to food, directly lowering inflationary pressures across the economy.
Zambia has also signed a landmark $1.1 billion agreement to build a crude oil refinery and energy complex in Ndola, in the heart of the country’s copperbelt region.
The facility is designed to process up to 60,000 barrels of crude oil per day, sufficient to meet all domestic fuel demand while creating opportunities for exports to neighboring countries.
Construction is scheduled to begin in the third quarter of 2025, with the first phase of commercial operations expected in 2026.
At the same time, Canadian mining giant Barrick Gold Corporation is scaling up investment in Zambia, with reports pointing to a $2 billion expansion plan.
This comes as the country leverages its resource wealth amid shifting geopolitical dynamics following strained ties between Sahel states in West Africa and their former Western partners.
Don’t Miss This:
Zambia Plays Down Health Fears After Toxic Mine Spill Triggers U.S. Evacuation
Image Credit: Bloomberg
