In August 2025, Zambia recorded its lowest annual inflation rate in over two years — 12.6%, down from 13% in July. The decline, driven by easing food and non-food prices, marks a turning point for Africa’s second-largest copper producer. For Zambia, where consumer prices have long been volatile, this is more than just a statistical milestone; it signals how resource wealth, currency strength, and strategic investments can realign an economy. For Africa, it offers a case study in how macroeconomic discipline and commodity leverage can unlock continental resilience.
Inflation remains one of Africa’s most stubborn economic challenges. From Nigeria to Ghana to Ethiopia, food prices and currency depreciation weigh heavily on households. Zambia’s slowdown, however, reflects a different trend: structural stability powered by favorable external dynamics and prudent monetary targeting.
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Zambia saw further relief from price pressures as food inflation, the main driver of household expenses, eased to 14.9% from 15.3%, while non-food inflation slowed to 9.3% from 9.7%. Monthly costs rose by just 0.5%, marking one of the lowest increases in years and signaling a steady moderation in consumer price growth.
The kwacha’s strength is central to this story. Bloomberg projects it will appreciate by nearly 20% against the dollar in 2025, making it one of the world’s strongest-performing currencies. In a continent often defined by currency weakness, Zambia’s position challenges assumptions about African exchange rate fragility.
The Bank of Zambia has set a target to return inflation to its 6–8% range by 2026. If achieved, Zambia will become one of the few African countries able to align its price dynamics with global stability benchmarks.
Zambia’s resilience is closely tied to copper — the “new oil” in the energy transition era. With global demand surging for electric vehicles, renewable energy grids, and semiconductors, copper’s importance has never been higher. Prices have strengthened accordingly, giving Zambia a windfall opportunity.
Barrick Gold’s $2 billion expansion of the Lumwana mine in Zambia is set to double annual copper output to 240,000 tonnes, positioning the country as a stronger global copper hub. The project includes a new high-capacity processing plant, expanded electricity lines, and supporting infrastructure, further embedding Zambia into global supply chains. With 81% of Q1 2025 spending directed to Zambian suppliers and nearly 12,000 local jobs sustained, the expansion underscores both its economic impact and commitment to local participation.
Copper’s rise repositions Zambia as not just a supplier of raw materials, but as a hub for industrial capacity and skill-building. Barrick’s investment in Manyama township, training centres, and sustainability projects shows a shift from extractive models to ecosystem-building models, where mining fuels broader development.
Energy Sovereignty in the Copperbelt
Another underreported milestone is Zambia’s move to build a $1.1 billion crude oil refinery in Ndola. The refinery will process 60,000 barrels per day — enough to meet full domestic demand and allow exports to neighbours.
For a continent where imported refined fuel remains a critical inflation driver, Zambia’s refinery signals a push toward energy self-reliance. If completed on schedule in 2026, Zambia will reduce its dependence on volatile global fuel markets while creating new export revenue streams.
This fits into a wider African trend: countries are seeking to capture more value locally rather than exporting raw commodities and importing finished products. From Dangote’s refinery in Nigeria to Uganda’s East African Crude Oil Pipeline ambitions, the pattern is clear — Zambia’s refinery adds momentum.
Zambia’s trajectory matters beyond its borders. It highlights three critical lessons for the continent:
1. Currency Strength as an Anti-Inflation Tool
Africa is often locked in cycles of weak currencies and high inflation. Zambia shows that resource leverage, combined with disciplined monetary policy, can flip the script.
2. Copper as a Continental Asset
As the world electrifies, copper is to Africa what oil was in the 20th century. Zambia’s expanding role strengthens Africa’s bargaining power in the global green economy. If managed well, this could underpin industrial growth across the continent, from smelting to battery production.
3. From Resource Dependency to Sovereignty
Zambia’s refinery signals a shift from import dependence to strategic self-sufficiency. This matters for Africa’s long-term resilience, especially as global energy and commodity markets remain unstable.
