ZAMBIA: An Introduction

An Overview of Economic, Political and Legal Trends

Introduction

In recent years, Zambia has experienced significant economic shifts, evolving political dynamics and notable legal reforms that continue to shape its business and social landscape. In this article, we highlight the latest economic, political and legal trends shaping Zambia’s future, aimed at providing insights for stakeholders operating across various sectors.

Economic trends

As of early 2025, Zambia is navigating a complex economic landscape marked by both challenges and opportunities.

The International Monetary Fund (IMF) has projected a significant rebound in Zambia’s Gross Domestic Product (GDP), forecasting a growth rate of 6.6% for 2025, positioning Zambia among the top ten fastest-growing economies in sub-Saharan Africa. This matches the Zambian government’s forecast stated in its 2025 budget. However, not all analysis aligns with the IMF’s projections. For instance, Oxford Economics Africa has offered a more conservative estimate, anticipating a GDP growth of 3.4% in 2025, based on concerns over an unsatisfactory rainy season, which could adversely affect agricultural output, power generation and overall economic performance.

Despite projected growth, Zambia is currently experiencing a recession, primarily due to the severe El Niño-induced drought that has adversely affected agricultural output and power generation. Other economic challenges faced by the country include currency depreciation, which hit a record low of 27.95 per US dollar in January 2025 and Zambia’s debt burden. While Zambia has secured debt restructuring deals with bilateral lenders and bondholders in excess of USD8 billion, managing repayments remains a challenge and adds to national risk.

Despite the highlighted challenges, Zambia offers opportunities for investment with leading sectors in terms of potential for 2025, largely being considered to be mining, renewable energy, large-scale infrastructure (roads and urban development are planned), agriculture and agri business, financial and technology, retail, tourism and services sectors. 

Political trends

Zambia operates under a unitary presidential system with a multi-party democracy. The country follows a constitutional framework that defines the roles of the executive, legislature and judiciary, ensuring a system of checks and balances.Elections are held every five years for presidency, parliament and local councils with the next elections scheduled for Thursday 13 August, 2026.

Zambia is one of Africa’s most politically stable democracies having recorded multiple peaceful elections resulting in power shifting between parties without violence. The next elections will be very telling of the trajectory Zambia will take, but overall, its political system provides a stable environment for governance, investment and regional co-operation, although continued reforms are needed to enhance democratic governance.

Legal trends

As of early 2025, key developments in Zambia's legal landscape include the following.

Changes to the Property Transfer Tax Act

In terms of the Property Transfer Tax (Amendment) Act No 27 of 2024 (the “PTT Act 2024”), effective 1 January 2025, property transfer tax (PTT) rates were increased from 5% to 8% of the realised value of land, shares, mineral exploration licences and intellectual property on transfers of land, shares (for onshore transfers and certain offshore transfers), mineral exploration licences and intellectual property. This represents a 60% increase in the tax burden on such transactions.

Additionally, the PTT Act 2024 has also introduced a benefit forfinancial service providers, building societies and money-lenders by allowing for the realised value on the sale of foreclosed property to be the actual purchase price received by thefinancial service providers, building societies and money-lenders, which change acknowledges that distressed assets are usually sold below their market value.

New tax clearance certificate requirements

Effective 1 January 2025, the Income Tax (Amendment) Act No 22 of 2024 (the “ITA 2024”) increased the instances when a tax clearance certificate is required. In terms of Section 81 (B) of the ITA 2024, transfers of property now require a transferor of the property to produce a tax clearance certificate before a transfer can be registered or effected. Further, government offices empowered to issue trading permits and licences including an exploration licence, mining licence, mineral processing licence, gold panning certificate, mineral trading permit, mineral import permit or mineral export permit will require the applicant to now produce a tax clearance certificate before the permit or licence can be issued. In addition, there is a requirement for every person, institution or corporate to only transact with a supplier of goods and services that has a tax clearance certificate. The ITA 2024 allows the Minister of Finance to prescribe a threshold for goods and services that will require production of a tax clearance certificate, but no prescription has been made yet.

New Mines Act

On 20 December 2024, the President assented into law the Mineral Regulation Commission Act No 14 of 2024 (the “New Mines Act”) which will, once operationalised, repeal and replace the current Mines and Minerals Development Act, 2015. The New Mines Act will come into operation on the date appointed by the Minister by statutory instrument. The New Mines Act will create the Minerals Regulation Commission and provide for its functions and establish the Mining Appeals Tribunal, among other things. The Mineral Regulation Commission shall be a body corporate that shall now regulate and monitor the mining industry and mining operations including issuance, suspension and revocation of licences in the mining sector, regulation and monitoring of mineral marketing and trading in, and export of, minerals.

The Green Economy and Climate Change Act, 2024

In December 2024, the Zambian government enacted the Green Economy and Climate Change Act, 2024, which will, among other things, regulate the carbon markets in Zambia and domesticate the United Nations Framework Convention on Climate Change and the Paris Agreement. The Act shall come into operation on the date the Minister of Green Economy will appoint through a statutory instrument.

The proposed Bank of Zambia Currency Regulations, 2024

In June 2024, the Bank of Zambia announced its intention to introduce the Bank of Zambia Currency Regulations, 2024, which, if promulgated, will make the Zambian kwacha the sole legal tender for all domestic transactions in Zambia. The exemptions to the proposed foreign currency restrictions include the payment of sums of money towards satisfying foreign currency liabilities, including interest, due to and from financial service providers, taxes paid in foreign currency to the government, payments for tolling services in the mining sector, inter and intra mine sales of copper, trading of electricity in regional power pools, and payments by non-residents for tourism services offered by enterprises. It is unclear when or if the proposed Regulations will be enacted into law.

Mobile Money Transaction Levy Act 2024

This Act requires mobile money service providers to collect a levy on all person-to-person mobile money transfers from the transferors and remit, within ten days after the end of each month, the total levies collected for that month to the Zambia Revenue Authority, failing which, a financial penalty would be imposed on the mobile money service providers. The Act also requires mobile money service providers to keep and maintain a record of the mobile money service provider’s operations for a period of six years.