By Lovemore Lubinda
Zambia’s economy is moving from crisis management to balance-sheet management, with copper demand, a bumper maize harvest and changes in the foreign exchange market set to define the rest of 2026, according to Zambia National Commercial Bank (Zanaco) Chief Risk Officer Mutisunge Zulu.
Speaking in a conversation with Mwelwa Chibesakunda, Founder of Financial Insight Zambia, Zulu said the global backdrop remains complex but is creating specific opportunities for Zambia, particularly in mining and agriculture.
The discussion covered geopolitics, commodity cycles, public debt management, banking sector performance and the outlook for the kwacha after the August 13 elections.
On the global economy, Zulu pointed to two structural drivers lifting demand for copper: artificial intelligence data centres and the expansion of electric vehicles.
Both are power-intensive and rely heavily on copper wiring, which he said is contributing to what he described as a renewed boom in the metal.
“Copper is back at the centre of the global growth story,” Zulu said. “The energy transition and digital infrastructure are not short-term themes. They are multi-year demand drivers, and Zambia is directly exposed to that.”
Domestically, he highlighted agriculture as another bright spot.
Zambia recorded a bumper maize harvest this season, but Zulu noted that the challenge now is in how the crop is traded and priced.
He said inefficiencies in the marketing chain and price discovery remain a risk to farmer incomes and to food inflation.
The conversation also turned to public finance. Zulu said Zambia has shifted from managing an acute debt crisis to managing the government balance sheet more actively.
He cited the recent eurobond buyback financed through a facility from the African Development Bank as an example of liability management aimed at reducing debt service pressure.
On reserves, he said the Bank of Zambia’s approach to reserve management and the evolving dynamics in the FX market will be critical in the months ahead.
With election-related uncertainty typically driving volatility, Zulu said the market is watching how policy will support kwacha stability while allowing enough flexibility for exporters and importers.
For the banking sector, Zulu said institutions are adjusting to a tougher operating environment marked by currency risk, margin pressure and a repricing of credit risk. With interest rates still elevated, he said banks are looking beyond traditional interest income.
“We are seeing a deliberate push into non-interest income,” he said. “That includes transaction banking, fees, trade finance and digital products. The sector cannot rely on lending spreads alone in this cycle.”
The sector’s performance so far this year supports that view. According to data discussed in the conversation, the first quarter of 2026 saw strong credit growth. At half-year, banks collectively recorded their highest-ever profit after tax.
Zulu said the growth reflects both higher economic activity and improved risk management by banks, but he cautioned that asset quality will need close monitoring as rates stay high and as the economy adjusts to post-election policy.
On the kwacha, he said the immediate outlook will be shaped by three factors: copper prices, donor and multilateral inflows, and market sentiment after the elections.
He said a stable political transition and continued progress on debt restructuring would help anchor confidence, while external shocks could add pressure.
He added that corporates and banks are already hedging more actively against currency moves. “The FX market is not what it was two years ago. It is deeper, but it is also more sensitive to news flow. Risk management has to be front and centre,” Zulu said.
Chibesakunda asked about the broader risk environment. Zulu said geopolitical tensions, supply chain shifts and climate variability remain key external risks, while domestically the focus should be on improving the efficiency of agricultural markets and sustaining fiscal discipline.
He said Zambia’s fundamentals are stronger than during the last debt crisis, but the country cannot be complacent. “We are in a better place, but it is about execution now. How we manage the copper windfall, how we trade our maize, and how we keep the macro stable will determine whether 2026 is a breakout year,” he said.
The session ended with Zulu noting that Zanaco, as one of Zambia’s largest banks, is positioning for the next phase by strengthening risk frameworks, investing in digital channels and supporting clients in sectors tied to the copper and agriculture value chains.
With elections days away and global demand for Zambian copper rising, he said the next six months will be important in setting the tone for growth into 2027.
The International Monetary Fund’s July 2026 World Economic Outlook Update has reinforced the importance of Zambia’s ongoing economic reform programme, with many of the global risks and policy recommendations identified by the Fund closely mirroring priorities outlined in the country’s 2026 National Budget and subsequent stakeholder consultations.
The IMF projects global growth to moderate to 3.0 percent in 2026 before recovering to 3.4 percent in 2027, while growth in sub-Saharan Africa is expected to remain broadly stable at 4.3 percent amid rising geopolitical tensions, higher energy and fertilizer costs, persistent inflationary pressures and increasing uncertainty in global trade and financial markets.
The Fund warns that low-income and commodity-importing economies remain vulnerable to higher fuel, fertilizer and food prices resulting from conflict-related disruptions in global energy markets, while also highlighting growing risks associated with elevated debt levels, weakening fiscal buffers and declining official development assistance.
These concerns closely align with the assumptions underpinning Zambia’s 2026 Budget, which was presented under the theme “Consolidating Economic and Social Gains Towards a Prosperous, Resilient and Equitable Zambia.”
