Sheila Mudenda, the Acting Statistician-General, reported that consumer prices increased 12.6% in August, down from 13% in July.
Food inflation, the primary driver of household spending pressures, fell to 14.9% from 15.3% the previous month, while non-food inflation slowed to 9.3% from 9.7%. Monthly costs increased by only 0.5%.
The decrease in inflation comes as Zambia, Africa’s second-largest copper producer, benefits from a jump in copper prices.
Looking ahead, the Bank of Zambia expects inflation to return to its 6-8% target range by the first quarter of 2026, with an average rate of 13.3% in 2025.
If the country’s currency, the kwacha, continues to perform well and copper prices remain high, the government may experience a much-needed period of price stability, which would encourage growth while alleviating the burden on consumers.
Zambia’s recent gains
The global thirst for Zambia’s copper has bolstered the kwacha, which is expected to increase by over 19% versus the US dollar by 2025, making it one of the world’s best-performing currencies tracked by Bloomberg.
The stronger currency has helped lower the cost of imports, from petrol to food, directly reducing inflationary pressures throughout the economy.
Additionally, Zambia recently signed a landmark deal to establish a $1.1 billion crude oil refinery and energy complex in Ndola, located in the country’s copperbelt region.
The planned facility is expected to process up to 60,000 barrels of crude oil per day, enough to cover the full domestic fuel demand and allow future exports to neighboring nations.
Construction is scheduled to begin in the third quarter of 2025, with the first phase of commercial operations targeted for 2026.
Given Zambia’s fast resources, and the fallout between Sahel states in West Africa and its former Western partners, reports indicated that Canadian mining giant Barrick Gold Corporation is ramping up its investment in Zambia with a $2 billion expansion plan.
