Ensuring Economic Prosperity in 2025

By Michelo Maunga

2024 is behind us. The year that saw rolling power outages never before seen in this country, is in the past. 2025 beckons. And with it the hopes of this country rest for a new beginning and respite from the hardships that befell us the year prior. What must we do to ensure that 2025 is indeed an improvement on 2024? Away from the President, his Cabinet, what role must we as citizens play in actualizing this aspiration? Having spent my 2024 peering through newspapers and economic articles, as I do every year, I believe I have a modest understanding of the happenings in our economy. There are, nevertheless, many amongst us who indeed have a better understanding of the Zambian economy. The foregoing, notwithstanding, I believe my opinion is worth some salt.

The Zambian economy narrowly avoided recession in 2024. Besides the economic hardships, which have been well articulated by scribes across this country, the preceding year set in motion a humanitarian crisis that put at risk half of our country’s population to the threat of starvation. While I do believe more could have been done to avoid this crisis, the Government deserves commendations for preventing the loss of any Zambian life during this catastrophe. A raft of interventions was set in motion, beginning with the declaration by the Republican President of a State of National Emergency and Disaster, sometime in February 2024, forgive me for not recalling the date, writing this article in the dead of the night. An appeal was issued that would avert the loss of any Zambian life from the ravages of over a million hectares of planted area being lost. To put this into context, roughly 3 provinces in the country received sufficient rainfall to produce adequate food in the 2023/24 rain season. There are 10 provinces in Zambia, not like anyone needed reminding.

Now then, 2024 is the history. Where shall our hopes lie for this year. To begin with, in Economics, the year after a shock tends to see economies rebound. If we recall, in 2021, the year after the height of the COVID pandemic, the economy recorded noteworthy growth, in the range of 5%. This was after a contraction. Economies tend to rebound in such situations because they are beginning from a low base. It is therefore, safe to say that the economy will perform better this year, regardless. Some of this is due to common sense. Believe it or not, most economic jargon can be boiled down to common sense. You need an example? When demand is high, the price goes up. When supply is high, price reduces. The famous Law of Demand and Supply, or as I like to think of it, common sense. Let me not lose my thought, or you the reader. Where was i? Yes, the economy performing better in 2025. Common sense.

Ok. Let me boil down to the gist of my article. What must we do to create a better 2025. I have said this before and will say it again, our economy is too reliant on the rain. Kenya experienced successive droughts from 2020 to 2023. Their economy continued to trudge along just fine. To mitigate their food deficit, during that period, Zambia provided them with much of their maize. Botswana, Egypt and Namibia. What do these countries have in common? They are largely deserts. However, their economies continue to thrive. There are ways to navigate low rainfall. Part of the problem is that too large a share of our people are subsistence farmers. Economics teaches us that as nations progress, they transition away from being agrarian societies, or societies that rely primarily on low yield farming. We need to work towards moving our rural communities into industrial activities, value addition to agricultural produce for instance or what is know as as moving from a  primary to secondary economy. Beyond this, economies evolve further, what is often termed the tertiary economy. That’s an article for another day, however.

I have mentioned one thing, we are too reliant on natural rain. What is the second thing? Diversification in our energy sources. The Kariba Dam was constructed decades ago, before independence. This year, Zambia will be 61. Surely, I do not think even the architects of this piece of infrastructure, expected it to last as this long. We will be lucky if the Kariba North Bank Power Station ever provides us with what it has done for so long. Would you use a car for 61 years? I doubt it. The Kariba has served us very well and we are grateful to the colonialists for constructing it. It is, however, time for growth, time for change. Time to move beyond Kariba. Allow me to say what may not be popular, whilst acknowledging my hope for better rainfall this year, but even if the rains improve, what happens next year, the year after? The year after that? An El Nino will forever be around the corner. How do we adapt to this new reality? I believe, as a people we have to start asking ourselves some difficult questions.

As I conclude, there were some bright spots last year. It was not all doom and gloom. Tourism did well. According the Ministry responsible, we were due to record 2 million visits, which has never been achieved. For context, tourism is the largest forex receipt earner in Egypt, one of the largest economies in Africa, should be third after South Africa and Nigeria. Copper production is also expected to have risen. The benefit of little rain is that Mines do not have to pump out as much water from underground. Lastly, the failed planting season has forced most of our farmers to take more seriously climate smart agriculture. Government, itself realigned the Constituency Development Fund to induce just such a change. The Loans and Grant component, I believe was partially redirected to this effect.

Therefore, there is hope. Zambians are a resilient people. Over the course of our history, we have experienced difficult times, but we have also experienced good times. At the threat of sound cliché, it is truly darkest before dawn. Our best days are ahead of us. 2025 will be better. This is not on the hope/faith of better rain. It is founded in my belief in my people, that in the nature of the Creator, we are able to surmount even the most indomitable of tasks. If nothing is too difficult for God, as his people, nothing shall be too difficult for us. Even reduced rain.

The Author is an Economist and Member of the Economics Association of Zambia.