Case Study: Economic Adjustments in Zambia

Zambia's economy faced considerable external headwinds following a sovereign debt restructuring process and fluctuating copper prices. Severe drought conditions in certain regions also constrained agricultural output and power generation, leading to upward pressure on domestic food and utility prices. The Zambian Kwacha experienced periods of depreciation, which escalated the domestic cost of imported refined petroleum and agricultural inputs. Although the Bank of Zambia adjusted its policy rate to curb these pressures, price stability remained a critical challenge. Youth unemployment remained elevated at approximately 12.4%, and underemployment in the informal sector remained a major structural issue. Rising costs of staple foods, particularly maize meal, significantly squeezed household disposable incomes, forcing many households to reallocate their expenditures.

Table 1: Annual Consumer Price Inflation in Zambia (2016–2022)