Zambia Country Risk Report

Published 27 May 2015 | Quarterly

  • 48 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
Zambia Country Risk Report

Core Views:

  • Despite low copper prices, we anticipate real GDP growth of 6.0% in Zambia in 2015, from an estimated 6.0% in 2014. Private and government consumption will remain the key drivers of growth, with resilient domestic demand helping to offset weaknesses in the export sector. Growth will also be supported by a stable inflationary environment .

  • Zambia's budget deficit will stand at 6.5% of GDP in 2015, significantly greater than the government's initial projection of 4.6%. Revenues will be hit by the reversal of a recent mining tax hike. Given that 2016 is an election year, this will result in capital, rather than recurrent, spending being reduced.

  • Zambia's current account balance will fall further into the red in 2015, nearly doubling from USD383mn to USD711mn. As a proportion of GDP, this means the deficit will expand from 1.5% of GDP in 2014 to 3.3% in 2015. The shortfall will narrow to 2.4% in 2016, but the balance will remain negative until 2018, when a small surplus will be recorded. The current account has been weighed down by a fall in copper production and a sharp decrease in global prices for the industrial metal.

Key Risks To Outlook:

  • The most salient risks to Zambia's economy stem from global economic developments which directly impact the price of copper, Zambia's chief export, as well as the appetite for frontier market investment. If struggles in Europe, China, and other major markets are more or less pronounced than we currently anticipate, then our forecasts would be rendered either too optimistic or too negative.

  • A meaningful shift to the left for policy could see investment flows decline, which would negatively impact growth, the currency and inflation.

  • Inclement weather could hamper agricultural production, which would send inflation higher and private consumption growth lower than we currently expect.

Macroeconomic Forecasts (Zambia 2013-2016)
Indicator 2013e 2014e 2015f 2016f
Executive Summary
Core Views
Key Risks To Outlook
Chapter 1: Political Outlook
SWOT Analysis
BMI Political Risk Index
Domestic Politics
Lower Mining Tax Will Fuel Public Discontent
Long-Term Political Outlook
A Question Of Policy, Not Politics
Chapter 2: Economic Outlook
SWOT Analysis
BMI Economic Risk Index
Economic Activity
Growth Driven By Private Consumption
Table : Economic Acti vit y
Fiscal Policy
Mining Tax Reversal Will Impact Capital Spending
Table : Fiscal Policy
Balance Of Payments
Current Account Deficit Will Widen As Copper Plummets
Table : Current Account
After The Commodity Boom: The New Growth Path
table : Structural Economic Weaknesses
table : 10 Outperforming Economies - Real GDP Growth , %
Chapter 3: 10-Year Forecast
The Zambian Economy To 2024
Mines 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
Legal Environment
Table : Sub -Saharan Africa - Legal Risk
Costs Of Labour
Table : Sub -Saharan Africa - Labour Cost Risk
Table : Regulations Governing Flexibility Of Workers
Chapter 5: Key Sectors
Table : Total Electricity Generation Data And Forecasts
Table : Total Electricity Generation Data And Forecasts
Other Key Sectors
table : Pharma Sector Key Indicators
table : Telecoms Sector Key Indicators
table : Infrastructure Sector Key Indicators
Chapter 6: BMI Global Macro Outlook
Global Outlook
EMs Still Slowing
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.

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