Growth of the real gross domestic product (GDP) in Zambia

Southern Africa's two economies—Zambia and Eswatini—present contrasting investment narratives as they navigate post-pandemic recovery through 2031. Understanding their gross domestic product (GDP) growth projections is critical for investors assessing regional exposure, currency risk, and sectoral opportunities across the subregion.

**Zambia's GDP recovery hinges on copper price stabilization and debt restructuring success.** The country exited its second sovereign default in late 2023 after securing a creditor agreement, unlocking IMF financing and restoring investor confidence. Real GDP growth is projected to accelerate from 2.9% in 2024 toward 4–5% annually through 2031, driven by mining sector rehabilitation, energy infrastructure investment, and agricultural expansion. However, this recovery remains fragile: copper commodity volatility, persistent kwacha weakness, and infrastructure deficits pose downside risks. Investors should monitor the central bank's monetary policy stance and external debt servicing capacity—both critical to sustained growth.

Eswatini's growth profile reflects a smaller, more diversized economy. Nominal GDP in current prices is forecast to expand steadily, though real (inflation-adjusted) growth remains modest at 2–3% annually. The kingdom's economy is anchored by sugar exports, textile manufacturing (via AGOA preference), and South African remittance inflows. Unlike Zambia's commodity dependency, Eswatini benefits from regional trade integration, though it faces fiscal pressures from public service wage demands and climate vulnerability in agriculture.

## What drives the divergence in these two economies' growth paths?

Zambia's recovery depends on commodity price rebounds and mining investment recovery, whereas Eswatini's growth is tied to regional trade, agricultural output, and service sector stability. Zambia is riskier but offers higher growth upside; Eswatini provides steadier, lower-volatility returns.

## Why should international investors pay attention to these forecasts now?

The 2024–2031 projection window captures critical transition periods for both nations. Zambia's debt restructuring and mining rehabilitation represent a rare re-entry opportunity for risk-tolerant investors; Eswatini's AGOA benefits and regional proximity to South Africa create stable, lower-risk plays. Currencies remain weak, offering long-term entry points for patient capital.

## How do inflation and currency stability affect these GDP forecasts?

Nominal GDP growth in current prices (Eswatini's headline metric) masks real purchasing power erosion if inflation outpaces growth. Zambia's kwacha depreciation and Eswatini's lilangeni peg-dependency complicate hedging strategies. Investors must analyze real (inflation-adjusted) growth rates and track central bank policy responses.

**Market implications for 2024–2031 are sector-specific.** In Zambia, mining, hydropower, and agriculture present entry points; in Eswatini, textiles, sugar, and financial services offer stability. Both economies lack deep capital markets—direct investment or bilateral project finance remain primary vehicles. Currency hedging is non-negotiable for foreign investors.

The consensus forecast assumes steady commodity recovery, stable rainfall, and continued IMF support. Tail risks include copper demand collapse (China exposure), regional drought, and political instability. Investors should build 12–18 month reassessment cycles into portfolio reviews.

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