As November opens, Zambia has reasons for economic optimism, but rising fuel costs, pressure on the Kwacha, tight business conditions and the struggle for household incomes are testing whether macroeconomic progress can translate into better lives. LUSAKA – A new month has begun, and for millions of Zambians, November brings the familiar calculation: how much Two months into Hichilema's second term, Zambia faces a mixed economic outlook, with growth prospects, rising fuel prices, Kwacha pressure and household cost-of-living concerns.As November opens, Zambia has reasons for economic optimism, but rising fuel costs, pressure on the Kwacha, tight business conditions and the struggle for household incomes are testing whether macroeconomic progress can translate into better lives. LUSAKA – A new month has begun, and for millions of Zambians, November brings the familiar calculation: how much

As November opens, Zambia has reasons for economic optimism, but rising fuel costs, pressure on the Kwacha, tight business conditions and the struggle for household incomes are testing whether macroeconomic progress can translate into better lives.

LUSAKA – A new month has begun, and for millions of Zambians, November brings the familiar calculation: how much will it cost to get to work, buy food, keep a business running and meet the bills before the next payday?

For a commuter, it may mean setting aside more money for transport. For a market trader, it may mean deciding whether to increase prices or accept a smaller profit. For a small business owner, it may mean reviewing fuel, electricity, stock and operating costs once again.

These everyday decisions provide an important measure of the economy that official growth figures alone cannot capture.

Two months after President Hakainde Hichilema began his second term on September 1, Zambia enters November with a mixed economic picture. There are encouraging signs of recovery and improving macroeconomic stability, but the cost of doing business and the pressure on household budgets remain significant concerns.

The Government has presented the second term as a shift from economic stabilisation towards growth. The challenge now is to make that transition visible in people’s pockets, workplaces, farms and businesses.

In its business outlook, Zambian Eye examines the economic position at the beginning of November, the opportunities emerging and the pressures that could shape the months ahead.

Growth prospects are encouraging, but the benefits must reach households

Zambia’s growth outlook remains positive.

The International Monetary Fund (IMF), following discussions with the Zambian authorities in October, projected economic growth of 5.6 per cent in 2026, supported by strong agricultural production, mining activity and exports.

The World Bank’s October 2026 assessment also projected average growth of 5.2 per cent over the 2026–2028 period.

These projections point to an economy with significant potential, particularly if mining production improves, agriculture performs well and electricity supply becomes more reliable.

However, growth figures do not automatically translate into improved living standards.

A country can record stronger economic output while many households continue to struggle with unemployment, low incomes and the rising cost of essential services.

The World Bank has cautioned that Zambia’s projected growth remains insufficient to reduce poverty rapidly. It identifies high poverty levels, limited formal job creation, debt vulnerabilities and dependence on mining as continuing challenges.

This is where the second term will be judged.

For a young person looking for employment, economic growth must eventually mean an available job. For a farmer, it must mean better access to markets and improved returns. For a family, it must mean that income can cover more than just basic necessities.

The question is not only how fast the economy grows, but how widely the benefits are shared.

Fuel prices put pressure on transport and business costs

One of the immediate concerns as November begins is the increase in fuel prices.

The Energy Regulation Board (ERB) announced new pump prices effective from midnight on October 31.

Petrol increased from K31.46 to K33.06 per litre, while diesel rose from K33.27 to K34.45.

Kerosene increased from K29.76 to K32.08, while Jet A-1 rose from K31.85 to K34.51.

The ERB attributed the increases to movements in international petroleum prices and the depreciation of the Kwacha by more than three per cent.

For ordinary motorists, the increase means paying more to fill a tank. For public transport operators, it adds pressure to operating costs. For businesses that depend on delivery vehicles, trucks and generators, fuel is an important component of the cost of doing business.

The impact can travel through the economy.

A trader transporting vegetables from a farming area to an urban market may face higher transport charges. A distributor delivering goods to shops may review delivery costs. A farmer using machinery or transporting produce may have to account for higher fuel expenses.

Eventually, some of these costs can be passed on to consumers.

The latest increase also comes after the substantial rise in October, making fuel affordability an important issue for households and businesses heading into the final months of the year.

The debate over the frequency of fuel price reviews has also returned, with Government indicating that it is considering whether monthly adjustments remain the best arrangement for business planning.

For businesses, predictability matters. Even when prices cannot be controlled, the ability to plan around them is important.

Inflation is contained, but the cost of living remains a concern

There is a positive side to Zambia’s inflation story.

The IMF reported that annual inflation declined to 6.1 per cent in September, bringing it within the Bank of Zambia’s target range.

However, the latest October figures from the Zambia Statistics Agency show annual inflation edging up to 6.3 per cent.

The increase was driven mainly by non-food inflation, which rose to 7.4 per cent, while food inflation eased to 5.7 per cent.

This distinction matters to ordinary households.

Food prices remain central to family budgets, but transport, housing, electricity, health and other non-food expenses also determine how far a salary or business income can stretch.

The October figures showed that the average price of a 25-kilogramme bag of breakfast mealie meal was K235.86, about 10.2 per cent lower than a year earlier.

That is encouraging for households whose budgets are heavily dependent on mealie meal.

But lower prices for one important food item do not necessarily mean that the overall cost of living has become affordable.

A household may spend less on mealie meal but more on transport, electricity, rent or healthcare.

For families whose incomes have not increased at the same pace as their expenses, the pressure remains.

The challenge for policymakers is to sustain price stability while ensuring that economic growth creates income opportunities.

The Kwacha and the cost of doing business

The exchange rate remains another important issue for the business community.

The Kwacha weakened significantly in October, with reports placing it around K20.30 to the US dollar towards the end of the month.

A weaker currency can increase the cost of imported goods, machinery, fuel-related inputs, medicines, vehicles and industrial materials.

For a small business importing stock, exchange-rate movements can quickly affect replacement costs.

A retailer who sells goods at a particular price may discover that restocking the same products costs more. An industrial firm importing equipment or spare parts may have to revise its operating budget.

The pressure can also affect consumers through higher prices for imported products and goods that depend on imported inputs.

The IMF has emphasised that exchange-rate flexibility will remain important in absorbing external shocks, while deeper foreign exchange markets and prudent reserve management should help support orderly market conditions.

Zambia’s foreign exchange position has also shown encouraging signs. The IMF reported gross international reserves of US$6.1 billion in September.

However, the challenge will be to maintain confidence in the currency while ensuring that businesses have access to foreign exchange for legitimate transactions.

Mining remains a major opportunity

Mining continues to be one of Zambia’s strongest economic pillars.

Copper remains central to export earnings, investment, foreign exchange generation and Government revenue.

The global demand for copper, driven by electrification, renewable energy, infrastructure and technological development, presents Zambia with a significant opportunity.

The country’s ambition to expand copper production offers the possibility of attracting new investment, creating jobs and increasing export earnings.

But translating this opportunity into broad economic benefits will require more than announcing production targets.

Mining investment must create meaningful opportunities for Zambian suppliers, contractors, transport operators, engineers, artisans and other service providers.

Local businesses must be able to participate in the supply chains surrounding the industry.

There is also a need to ensure that mining expansion supports communities through employment, infrastructure, skills development and responsible environmental management.

The bigger opportunity is to use mining as a catalyst for wider industrial development rather than allowing the economy to remain heavily dependent on exporting raw materials.

Agriculture could become a stronger driver of inclusive growth

Agriculture is another important part of the economic outlook.

The IMF has identified strong agricultural production as one of the factors supporting its 2026 growth projection.

A good agricultural season can have a wide impact, particularly in rural communities where farming supports household incomes, local trade and employment.

However, production alone is not enough.

Farmers need reliable access to inputs, extension services, storage facilities, transport, processing industries and markets where they can sell their produce at viable prices.

Small-scale farmers also need greater access to finance and practical support to move beyond subsistence production.

For a farmer in Southern, Eastern, Central or Northern Province, the economic value of a good harvest is ultimately measured by what remains after production, transport and marketing costs.

If the country is to benefit fully from agriculture, more attention must be paid to value addition, agro-processing and the development of reliable markets.

This could also create employment opportunities for young people in storage, logistics, food processing, packaging and distribution.

The electricity question remains central to business growth

Reliable electricity remains one of the most important requirements for economic expansion.

The World Bank’s latest Zambia Economic Update has emphasised the need to turn the electricity crisis into an opportunity for growth, jobs and development.

It argues that a more reliable and financially sustainable power sector is essential for industrial development and private-sector investment.

For manufacturers, reliable electricity affects production costs and operational efficiency. For small businesses, power interruptions can mean lost sales, damaged stock and additional expenditure on alternative energy.

For farmers, electricity is increasingly important in irrigation, cold storage, processing and other activities that can improve productivity.

The World Bank has recommended diversification of electricity generation, including greater investment in solar and wind, alongside reforms to improve the financial health of the power sector.

It has also highlighted the importance of protecting vulnerable households as electricity tariffs move towards cost-reflective levels.

The policy challenge is to balance the financial sustainability of the energy sector with affordability for households and businesses.

Without reliable power, Zambia’s ambitions in manufacturing, mining, agriculture and digital services will be difficult to achieve.

A new IMF programme: Opportunity and responsibility

Another major development is the staff-level agreement reached between Zambia and the IMF on a proposed new 36-month Extended Credit Facility arrangement.

The proposed programme would provide access to approximately US$1.472 billion, subject to approval by the IMF Executive Board and the implementation of agreed prior actions.

The arrangement is intended to support macroeconomic stability, debt sustainability, stronger fiscal buffers and private-sector-led growth.

It comes after the previous US$1.7 billion IMF programme expired in January 2026.

The new arrangement could provide an important framework for economic reforms and strengthen confidence among investors and development partners.

However, it also comes with fiscal discipline requirements.

The IMF has indicated that Zambia will need to strengthen domestic revenue collection, improve tax administration, manage public expenditure and gradually increase its primary surplus towards three per cent of GDP by 2029.

It has also called for stronger oversight of the Food Reserve Agency, state-owned enterprises and public-private partnerships, as well as better management of domestic payment and VAT refund arrears.

These measures matter to businesses because Government’s financial management has a direct effect on the wider economy.

When public institutions delay payments to suppliers and contractors, businesses can experience cash-flow problems, struggle to pay employees and postpone investment.

The success of the programme will therefore depend not only on meeting fiscal targets but also on ensuring that reforms support productive economic activity.

It is important to note that the agreement is not yet a final approval or a disbursement of funds. The IMF Executive Board must still consider the proposed arrangement.

Government’s economic test: Jobs, incomes and confidence

President Hichilema’s second term begins with a different economic challenge from the one he faced in 2021.

The first term was dominated by debt restructuring, economic stabilisation, inflation and restoring confidence following Zambia’s sovereign debt default.

The second term must now demonstrate that stabilisation can lead to stronger household incomes, employment and investment.

The Government’s Grow Zambia Agenda will be judged by its ability to create an environment in which businesses can expand, investors can operate with confidence and citizens can access meaningful economic opportunities.

This requires a predictable policy environment, efficient public institutions, transparent procurement, improved access to finance and a competitive private sector.

Small and medium-sized enterprises deserve particular attention.

They are often the businesses closest to ordinary citizens, employing people in retail, transport, hospitality, construction, agriculture, manufacturing and services.

Yet many face high operating costs, limited access to affordable credit, regulatory pressures and uncertain demand.

A stronger economy must make it easier for these businesses to survive, expand and employ more people.

November outlook: Cautious optimism, but no room for complacency

As Zambia enters November, the economic outlook can best be described as cautiously optimistic.

Growth projections are encouraging. Inflation remains within the central bank’s target range, despite the slight increase in October. Agriculture and mining offer opportunities, while the proposed IMF programme could provide a framework for continued economic reforms.

But there are clear risks.

Fuel prices have increased again. The Kwacha has faced pressure. The September trade balance moved into deficit, with exports falling and imports rising. Businesses continue to face operating-cost challenges, while many households remain concerned about the affordability of basic needs.

For the rest of 2026 and into 2027, attention will turn to whether Government can translate positive economic indicators into tangible improvements in people’s lives.

Can the economy create more jobs? Can small businesses access affordable finance? Can farmers earn better returns? Can the cost of transport and essential services become more manageable? Can investment create opportunities beyond the mining sector?

These are the questions that matter to citizens as much as the headline growth rate.

At Zambian Eye, our business outlook is that Zambia has an opportunity to build on the progress made in economic stabilisation, but the next phase must be measured by its human impact.

A stronger Kwacha, lower inflation and higher copper production are important national indicators. But for a family, the real measure of economic progress is whether the money coming in can meet the needs going out.

For a young graduate, it is whether there is a job to apply for. For a market trader, it is whether the business can make a sustainable profit. For a farmer, it is whether a good harvest can translate into a better livelihood.

Two months into the second term, the economic story is no longer just about stabilisation. It is about delivery. And as November begins, Zambians will be watching to see whether the promised growth can finally be felt in their daily lives.

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