By Jane Chanda
Economics Association of Zambia (EAZ) president Dr. Oswald Mungule says Zambia’s economy is on a resilient trajectory, driven by domestic and external factors, with the Kwacha’s appreciation attributed to a weak United States (US) Dollar.
And Dr. Mungule said despite global economic uncertainty, including recent tensions between the US, Israel, and Iran, the country’s economic trajectory remained positive.
The local currency gained value, trading at K23.28 and K23.67 on the bid and offer respectively, from K24.00 to the US dollar a week ago.
In an interview with Daily Revelation yesterday, Dr. Mungule said strong agricultural performance played a significant role, enhancing rural incomes after the drought period while reducing food imports and increasing export earnings, and that the Bank of Zambia (BOZ’s) effective monetary policy created a favorable macroeconomic environment.
He explained that tax inflows were strengthening the government’s fiscal position, enhancing liquidity and supporting national development programs and the supply of US Dollars increased substantially by mid-June 2025, supported by quarterly taxes and annual direct taxes, further boosting the Kwacha.
Dr. Mungule said the high local demand for the Kwacha in trade and domestic transactions reflected growing confidence in the currency and overall economy and that the import demand for energy and food remained subdued due to increased local productivity and substitution, easing pressure on foreign reserves.
“Zambia is currently experiencing a favorable macroeconomic environment supported by a combination of domestic and external factors,” he said. “The Bank of Zambia continues to play a vital role by maintaining a policy rate regime that effectively responds to inflation dynamics while preserving monetary stability.”
He also explained that by mid-June 2025, the supply of US Dollars substantially increased, supported by the simultaneous due dates of quarterly taxes and annual direct taxes, further boosting the Kwacha.
Dr Mungule said the recent drop in diesel and fuel prices also had a positive impact, lowering transportation and production costs and providing relief to consumers and businesses.
“Moreover, the recent drop in diesel and fuel prices has lowered transportation and production costs, providing further relief to consumers and businesses alike. Together, these dynamics are fostering a resilient and stable positive economic outlook for Zambia,” Dr. Mungule said.
While acknowledging potential risks from global economic uncertainty, including the recent tensions between the US, Israel, and Iran, Dr. Mungule remained optimistic about Zambia’s economic trajectory.
“However, continued focus on sovereign-to-sovereign portfolio investments with Namibia, Angola, and the Democratic Republic of Congo, as well as structural reforms, domestic value-chain investments, and policy consistency, will be essential in sustaining the positive trajectory,” said Dr. Mungule.
