By Ukumbi Afrika Zambia heads to the polls on 13 August 2026, investors are looking beyond the election result. While President Hakainde Hichilema is widely expected to secure a second term, markets are more focused on whether the country can build on its recent economic recovery and translate it into sustainable growth, jobs and higher investment.
After emerging from a historic sovereign debt default, Zambia now faces the challenge of maintaining fiscal discipline while accelerating economic expansion. Here are the key issues investors are monitoring.
1. A New IMF Programme
One of the biggest priorities after the election will be negotiations for a new programme with the International Monetary Fund (IMF).
Zambia's previous US$1.7 billion IMF programme, which helped stabilise the economy and supported the country's debt restructuring, ended in January 2026.
Investors will closely watch:
- How quickly a new agreement is reached.
- Whether the focus shifts from debt recovery to economic growth.
- Whether Zambia can maintain fiscal discipline while increasing investment and employment.
A new IMF deal is widely viewed as an important signal of continued policy stability.
2. Copper Remains the Economic Engine
Copper continues to dominate Zambia's economy, accounting for around 70% of export earnings and serving as a major source of government revenue, jobs and foreign investment.
The government aims to triple copper production over the long term from the current level of about 1 million tonnes annually.
Several major mining investments are expected to support that ambition, including:
- Vedanta's return to Zambia.
- Barrick's continued investments.
- First Quantum Minerals' expansion projects.
However, investors are watching whether these investment commitments will translate into actual production increases.
3. Mining Policy and Local Content Rules
The government has indicated it does not intend to increase mining taxes, providing reassurance to international mining companies.
Attention is instead focused on a proposed local-content law, which would require mining companies to increase purchases from Zambian suppliers to around 40% within three to four years, up from approximately 20%.
While the policy aims to strengthen local businesses, investors are concerned that many domestic suppliers currently lack sufficient financing and technical capacity, potentially creating supply chain challenges for expanding mining operations.
4. Economic Reforms Beyond Mining
Mining remains central to Zambia's economy, contributing more than 10% of GDP, but investors believe broader reforms are essential.
Key priorities include:
- Increasing investment in mineral exploration, as only two major mines have opened during the past decade.
- Improving government tax collection efficiency.
- Reforming Zambia's grain market by encouraging greater private-sector participation.
Currently, the government purchases large quantities of maize from farmers. Following expectations of a record harvest in 2026, these purchases could significantly increase public spending.
Standard Chartered estimates Zambia's 2026 fiscal deficit could reach 5% of GDP, well above the government's original 2.1% target, partly due to election-related spending and grain purchases.
5. Electricity Supply Is Critical
Reliable electricity has become one of Zambia's biggest economic challenges.
The severe 2023–24 El Niño drought reduced hydropower generation, leading to widespread electricity shortages and power rationing that affected both households and mining companies.
Although investment in solar energy is expanding, investors want to see stronger reforms that ensure stable electricity supplies needed for future mining expansion.
6. Political and Climate Risks
While the election is expected to be competitive, observers have expressed concerns over:
- Alleged voter-card confiscation.
- Vote-buying.
- The possibility of localised unrest, particularly in the Copperbelt and northern provinces if results are disputed.
Climate also remains a significant risk. Zambia's heavy dependence on hydropower and rain-fed agriculture means another poor rainy season could once again disrupt electricity generation, reduce agricultural output and slow economic growth.
Outlook
For investors, Zambia's election is about more than politics. The focus is on whether the next government can maintain economic stability while unlocking stronger growth through mining expansion, infrastructure improvements and structural reforms.
A successful IMF agreement, increased copper production, reliable power supply and disciplined fiscal management will likely determine whether Zambia can fully capitalise on its economic recovery and attract long-term investment.
Source: Reuters
Reporter: Colleen Goko
Editing: Karin Strohecker&Clarence Fernandez