Zambia has an emerging economy. It is a developing country, and it achieved middle-income status in 2011. Through the first decade of the 21st century, the Zambian economy was one of the fastest-growing economies in Africa, and its capital, Lusaka, the fastest-growing city in the Southern African Development Community (SADC). Zambia's economic performance has stalled in recent years due to declining copper prices, significant fiscal deficits, and energy shortages. The economy has been reliant on mineral extraction since the 1920s, in particular copper.

Upon achieving independence, Zambia had a higher GDP per capita than almost all sub-Saharan African countries. Over the subsequent decades, Zambia's economy contracted, in part due to declining copper prices. Since the 2000s, Zambia's economy has been growing. As of 2019, Zambia's GDP per capita (current international dollars) stands at $1,305.00.

Zambia is one of Sub-Saharan Africa's most urbanized countries. About one-half of the country's 16 million people are concentrated in a few urban zones strung along the major transportation corridors, while rural areas are under-populated. Copper and cobalt are among Zambia's main exports, while non-traditional exports include cotton, coffee, fresh flowers, burley tobacco, gemstones and maize (corn). Zambia is eligible to export duty-free goods to the United States under the African Growth and Opportunity Act (AGOA); the Act allows eligible countries from sub-Saharan Africa to export over 6,400 goods to the United States.

Copper output has increased steadily since 2004, due to higher copper prices and the opening of new mines. The maize harvest was again good in 2005, helping boost GDP and agricultural exports. Cooperation continues with international bodies on programs to reduce poverty, including a new lending arrangement with the IMF in the second quarter of 2004.

History Economic policies soon after independence (1964–1967)

The British South Africa Company (BSAC, originally set up by the British imperialist Cecil Rhodes) retained commercial assets and mineral rights that it acquired from a concession signed with the Litunga of Barotseland in 1892 (the Lochner Concession). Only by threatening to expropriate the BSAC, on the eve of independence, did the incoming Zambian government manage to get the BSAC to relinquish the mineral rights. The Federation's government assigned roles to each of the three territories: Southern Rhodesia was assigned the responsibility of providing managerial and administrative skills; Northern Rhodesia provided copper revenues; and Nyasaland provided the Black labour.

After independence, Zambia instituted a program of national development plans, under the direction of a National Commission for Development Planning: the Transitional Development Plan (1964–66) was followed by the First National Development Plan (1966–71). These two plans, which provided for major investment in infrastructure and manufacturing, were largely implemented and were generally successful. This was not true for subsequent plans.

The Mulungushi Economic Reforms (1968)

A major switch in the structure of Zambia's economy came with the Mulungushi Reforms of April 1968: the government declared its intention to acquire equity holdings (usually 51% or more) in a number of key foreign-owned firms, to be controlled by a parastatal conglomerate named the Industrial Development Corporation (INDECO). By January 1970, Zambia had acquired majority holding in the Zambian operations of the two major foreign mining corporations, the Anglo American Corporation and the Rhodesia Selection Trust (RST); the two became the Nchanga Consolidated Copper Mines (NCCM) and Roan Consolidated Mines (RCM), respectively. The Zambian government then created a new parastatal body, the Mining Development Corporation (MINDECO). The Finance and Development Corporation (FINDECO) allowed the Zambian government to gain control of insurance companies and building societies. However, foreign-owned banks (such as Barclays, Standard Chartered and Grindlays) successfully resisted takeover. In 1971, INDECO, MINDECO, and FINDECO were brought together under an omnibus parastatal, the Zambia Industrial and Mining Corporation (ZIMCO), to create one of the largest companies in sub-Saharan Africa, with the country's president, Kenneth Kaunda as chairman of the board. The management contracts under which day-to-day operations of the mines had been carried out by Anglo American and RST were ended in 1973. In 1982 NCCM and RCM were merged into the giant Zambia Consolidated Copper Mines Ltd (ZCCM).

In 1973 a massive increase in the price of oil was followed by a slump in copper prices in 1975, resulting in a diminution of export earnings. In 1973 the price of copper accounted for 95% of all export earnings; this halved in value on the world market in 1975. By 1976 Zambia had a balance-of-payments crisis, and rapidly became massively indebted to the International Monetary Fund (IMF). The Third National Development Plan (1978–83) had to be abandoned as crisis management replaced long-term planning.

By the mid-1980s Zambia was one of the most indebted nations in the world, relative to its gross domestic product (GDP). The IMF was insisting that the Zambian government should introduce programs aimed at stabilizing the economy and restructuring it to reduce dependence on copper. The proposed measures included: the ending of price controls; devaluation of the kwacha (Zambia's currency); cut-backs in government expenditure; cancellation of subsidies on food and fertilizer; and increased prices for farm produce. Kaunda's removal of food subsidies caused massive increases in the prices of basic foodstuffs; the country's urbanized population rioted in protest. In desperation, Kaunda broke with the IMF in May 1987 and introduced a New Economic Recovery Programme in 1988. However, this did not help him and he eventually moved toward a new understanding with the IMF in 1989. In 1990 Kaunda was forced to make a major policy about-face: he announced the intention to partially privatize the parastatals. Time, however, was running out for him. Like many African independence leaders Kaunda tried to hang on to power but unlike many he called multiparty elections and lost them to the Movement for Multiparty Democracy (MMD) and abided by the results. Kaunda left office with the inauguration of MMD leader Frederick Chiluba as president on 2 November 1991.

Chiluba's economic reforms (1991–2000)

Zambia's Economic System of Government is Unitary because of that the Frederick Chiluba government (1991–2001), which came to power after democratic multi-party elections in November 1991, was committed to extensive economic reform.

Zambia's economic transformation into a free market system began toward the end of 1991 following a change of government. To tackle a serious economic crisis, the government agreed to introduce substantial economic reforms to secure much-needed loans from the World Bank and IMF.

One of the greatest challenges was the privatization of the country's copper mines, Zambia's prime export earner. The government privatised many state industries, and maintained positive real interest rates. Exchange controls were eliminated and free market principles endorsed. It remains to be seen whether the Mwanawasa government will follow a similar path of implementing economic reform and undertaking further privatization. Zambia has yet to address issues such as reducing the size of the public sector, which still represents 44% of total formal employment, and improving Zambia's social sector delivery systems.

After the government privatized the giant parastatal mining company Zambian Consolidated Copper Mines (ZCCM), donors resumed balance-of-payment support. The final transfer of ZCCM's assets occurred on March 31, 2000. Although balance-of-payment payments are not the answer to Zambia's long-term debt problems, it will in the short term provide the government some breathing room to implement further economic reforms. The government has, however, spent much of its foreign exchange reserves to intervene in the exchange rate mechanism. To continue to do so, however, would jeopardize Zambia's debt relief. Zambia qualified for HIPC debt relief in 2000, contingent upon the country meeting certain performance criteria, and this should offer a long-term solution to Zambia's debt situation.

2001–2010 On 2 January 2002, MMD's Levy Mwanawasa won the presidential election which many observers claimed had actually been won by the opposition. In January 2003, the Zambian Government informed the International Monetary Fund and World Bank that it wished to renegotiate some of the agreed performance criteria calling for privatization of the Zambia National Commercial Bank and the national telephone and electricity utilities.

Foreign investors liked Mwanawasa, owing partly to his anti-corruption drive. During his presidency, Zambia received foreign investment.Zambia: Why Africa needs more cabbage The Economist The main driver of economic growth was minerals. Mwanawasa's policies helped to lower inflation to single digits in 2006, a record the country had not seen in over 25 years, and spread some benefits to the poor. Tourists and white farmers diverted from Zimbabwe and helped the Zambian economy. The policies turned the Zambian town of Livingstone, near Victoria Falls, into a tourist hub.Levy Mwanawasa The Telegraph Zambia received a relatively large amount of aid and debt relief because of liberalisation and Mwanawasa's efforts. Overall, economic growth increased to about 6% per year.

After Mwanawasa suffered a stroke while attending an African Union summit in Egypt on 29 June 2008, Rupiah Banda became acting president and subsequently President.James Butty, "Zambian President Has Had a History of Hypertension, Says Information Minister", VOA News, 2 July 2008. With divisions within the MMD, Banda promised to "unite the party and the entire nation" and to "continue implementing [Mwanawasa's] programs". After taking office, however, Banda dismantled much of the anti-corruption effort put into place by his predecessor, Mwanawasa. This, compounded with the effects of the Great Recession, led to a sustained period of increased inflation.

2011–2020 In September 2011, the social democrat, Michael Sata led the Patriotic Front (PF) to victory with a vow to improve conditions for their Zambian employees."Zambia Swears in Opposition Leader as New President", VOA News, 25 September 2011. Though known to previously oppose Chinese investment, he declared his change in perspective prior to his election victory.Shapi Shacinda, "Sata warms to Chinese investment in Zambia", Reuters, 8 September 2008. Sata died on 28 October 2014 and was succeeded by Edgar Lungu. The period, saw an infrastructure boom with the development of the Kafue Gorge Lower Power Station, two multi-purpose stadiums, Levy Mwanawasa Stadium and National Heroes Stadium, expansions of the Kenneth Kaunda International Airport, the Harry Mwanga Nkumbula International Airport and the Simon Mwansa Kapwepwe International Airport, and the Pave Zambia 2000 project intended to create and repair major urban roads countrywide.

Unfortunately this came at a huge debt cost that slowed the economy and compounded by corruption and the COVID-19 pandemic resulted in weak GDP growth and a recession in 2019 and 2020 respectively. Zambia's GDP had shrunk from US$29 billion to US$19 billion and its debt grew from 16% to 140% of GDP from 2010 through 2020. In November 2020, Zambia became Africa's first coronavirus-era default when it opted to bow out of a US$42.5 million eurobond repayment.

From 2021