Zambia Country Risk Report

Published 26 August 2015 | Quarterly

  • 52 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:

  • We forecast that Zambia will record real GDP expansion of just 5.6% in 2015 as troubles in the mining sector will weigh on investment and exports growth, compounded by negative sentiment towards the country thanks to its widening fiscal and current account deficits and volatile currency.

  • The Bank of Zambia will maintain the key policy rate at 12.50% through the remainder of 2015 and the first half of 2016, when it will begin a cutting cycle. However, more profligate government spending than we currently anticipate - a salient risk with presidential elections in 2016 - would push this loosening back.

  • Zambia's external debt position, while having taken a shock in 2015, will stabilise over the next several years as the country brings in its fiscal deficit. Nevertheless, as the kwacha depreciates there is no room for further fiscal mismanagement and borrowing to cover budget deficits.

  • A relatively tight monetary policy and high reserve requirements will squeeze commercial bank profits in Zambia in 2015. That said, the country's nascent banking sector will continue to expand robustly in the years ahead as supportive base effects will lead to solid recordings in asset growth, while commercial profitability will be driven by electronic banking platforms and new products offerings.

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...

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.

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