In response to Zambia’s ongoing economic challenges, the country’s Central Bank has launched a Stability and Resilience Facility aimed at securing the financial sector amid the devastating effects of the worst drought the nation has faced in more than a century. This unprecedented drought has had a significant impact on the agricultural sector, further exacerbating Zambia’s inflationary pressures, which have surged to a three-year high.
Mukwandi Chibesakunda, the Chief Executive Officer of Zanaco, Zambia’s largest commercial bank, addressed these pressing concerns during an interview with Jennifer Zabasajja, Bloomberg’s Chief Africa Correspondent. Speaking on Horizons Middle East and Africa, Chibesakunda provided valuable insights into the economic outlook for 2025, outlining strategies for recovery and resilience in the face of the ongoing challenges.
The recent drought, which has deeply affected crop production, particularly in key agricultural regions, has placed considerable strain on Zambia’s economy. With agricultural output down and food prices climbing, inflation has spiked, reaching levels not seen in the past three years. This economic strain, combined with global market uncertainties, has resulted in a challenging environment for businesses and households alike.
To mitigate the risks posed by the drought and help maintain economic stability, the Central Bank’s Stability and Resilience Facility is focused on providing liquidity support to banks and other financial institutions. This facility is designed to bolster the financial sector’s ability to withstand external shocks, ensuring that Zambia’s banking system remains robust during the recovery period.
Chibesakunda’s comments during the Bloomberg interview highlighted the importance of both domestic and international collaboration in ensuring that Zambia can recover from this crisis. Zanaco, under his leadership, has played an instrumental role in supporting businesses and communities impacted by the economic downturn, particularly in rural areas where the drought has hit hardest.
Looking ahead to 2025, Chibesakunda expressed cautious optimism about the country’s recovery. He noted that while the drought has caused significant setbacks, the implementation of policy measures aimed at stabilising the economy and the anticipated return of more favourable weather conditions in the coming seasons offer hope for a gradual recovery. In particular, he highlighted the importance of diversifying Zambia’s economy beyond agriculture, pointing to opportunities in sectors such as mining, energy, and technology as potential drivers of growth in the coming years.
Chibesakunda’s interview underscored the resilience of the Zambian people and the commitment of both the public and private sectors to navigate through these difficult times. With the Stability and Resilience Facility in place and key reforms underway, the country is taking crucial steps toward securing a more stable economic future.
In addition to addressing domestic challenges, Zambia’s recovery will also depend on its ability to strengthen trade relations with regional partners and attract foreign investment. By diversifying the economy and focusing on infrastructure development, Zambia aims to become a more competitive player in the global market.
As the nation works towards economic recovery in 2025, the drought’s long-term effects will continue to shape the country’s trajectory. However, with the combined efforts of the government, financial institutions, and the private sector, Zambia remains focused on rebuilding and positioning itself for future growth and stability.
This outlook will depend heavily on the successful implementation of key policies and the ability to adapt to changing climatic conditions. With international support and a strategic approach to economic diversification, Zambia can hope to emerge from this crisis stronger and more resilient.
