Zambia Country Risk Report

Published 18 November 2015 | Quarterly

Quarterly report providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

Why you should buy this report

  • Understand and measure the political, business environment and operational risks to your company
  • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
  • Get the long-term political outlook and explore possible scenarios for change

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Zambia Country Risk Report
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Core Views:

  • The Zambian economy will record another year of slow growth in 2016, as the currency collapse seen in 2015 following falling copper prices has diminished the production incentive for import dependent producers. The government's plans to boost spending will offer little support.

  • The collapse of the Zambian currency and subsequent rise in inflation will force the Bank of Zambia's Monetary Policy Committee to raise the key policy rate at their next meeting. However, a rate hike will do little to stabilise the currency and stem inflation without direct intervention in the currency market.

  • Zambia's budget deficit will see a marginal improvement in 2016 as the government makes efforts to improve domestic revenue collection. While this marks an upward revision to our expectations for the country's budget balance, the government will still fall short of its aim to halve the deficit to 3.8% of GDP due to overambitious targets and a challenging macro-economic environment.

  • Hakainde Hichilema will win the 2016 presidential election in Zambia following the collapse of the country's currency and worsening macroeconomic picture.

  • The Zambian kwacha will continue its trend of depreciation in 2016 on the basis of a weak outlook for the country's copper industry. The lack of a stronger reserve arsenal means the central bank will have little in the way of ammunition to halt an expected 21.6% fall in the currency's value by year-end 2016 .

Macroeconomic Forecasts (Zambia 2013-2016)
Indicator 2013 2014e 2015f 2016f
e/f=BMI estimate/forecast. Source: National Sources
Real GDP growth, % y-o-y 6.7 4.6 3.6 3.9
Nominal GDP, USDbn 26.1 25.5 14.7 13.2
Consumer price inflation, % y-o-y, eop 7.1 7.8 8.1 7.0
Exchange rate ZMW/USD, eop 5.55 6.39 12.00 14.59
Budget balance, % of GDP -5.5 -6.4 -7.3 -7.1
Current account balance, % of GDP -0.8 -1.5 -5.8 -6.3

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Executive Summary
Core Views
Key Risks To Outlook
Chapter 1: Political Outlook
SWOT Analysis
BMI Political Risk Index
Domestic Politics
2016 Re-Election Increasingly Difficult For President Lungu
Table: Political Overview
Long-Term Political Outlook
A Question Of Policy, Not Politics
Chapter 2: Economic Outlook
SWOT Analysis
BMI Economic Risk Index
Economic Activity
Investor Concerns Will Weigh On Headline Growth
TABLE: Economic Activity
Monetary Policy
Key Policy Rate Will Be Maintained Until H216
TABLE: Monetary Policy
External Debt
External Debt Rise Manageable For Now
TABLE: Debt Indicators
Banking Sector
High Interest Rates Hurt Asset Growth
Chapter 3: 10-Year Forecast
The Zambian Economy To 2024
Mining Sector Both A Driver Of, And Risk To Growth
TABLE: Macroeconomic Indicators
Chapter 4: Operational Risk
SWOT Analysis
Operational Risk Index
Operational Risk
TABLE: Operational Risk
Market Size And Utilities Risk
TABLE: Sub -Saharan Africa - Market Size And Utilities Ris k
Interstate Security Risk
Chapter 5: Key Sectors
Pharmaceuticals & Healthcare
TABLE: Pharmaceutical Sales, Historical Data And Forecasts
TABLE: Healthcare Expenditure Trends, Historical Data And Forecasts
Other Key Sectors
table: Telecoms Sector Key Indicators
table: Infrastructure Sector Key Indicators
Chapter 6:BMI Global Macro Outlook
Global Outlook
Assessing The Aftermath Of Three Key Events
Table: Global Assumptions
Table: Developed States, Real GDP GrowtH, %
Table: Emerging Markets, Real GDP Growth, %

The Zambia Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in The Zambia and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market..

An influential new analysis of The Zambia's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of The Zambia's economic and industry growth through end-2017.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise The Zambia's country risks against regional peers using BMI's country comparative Risk Ratings system.
  • Evaluate external threats to doing business in The Zambia, including currency volatility, the commodity price boom and protectionist policies.

The Zambia Country Risk Report by Business Monitor International (BMI) includes three major sections: Economic Outlook, Political Outlook and Business Environment.

Economic Outlook:

How will the Zambian economic policy-making and performance impact on corporate profitability over 2013-2017?

BMI provides our fully independent 5-year forecasts for The Zambia through end-2017 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Zambia Country Risk Report features BMI's forecasts with supporting analysis for 2013 through to end-2017, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:


  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Ratings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2017 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for The Zambia and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on The Zambia, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in The Zambia over the next 5-years?

BMI's The Zambia country Risk Ratings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Zambian Market - Political Strengths, Weaknesses, Opportunities and Threats facing The Zambia.
  • Political Stability and Risk Assessment - BMI's Risk Ratings assess explicit short- and long-term risks to political stability; latest ratings, rankings and trends for The Zambia's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark The Zambia's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Business Environment

Business Environment Risk Ratings with SWOT Analysis - Business environment Risk Ratings for The Zambia, benchmarked against ratings for regional neighbours.

Country Competitiveness - Competitiveness of The Zambia's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Ratings.