Key points
- Zambia met the LDC graduation criteria in 2021 exceeding both the graduation thresholds for gross national income per capita and Human Assets Index, but only met one of the criteria in 2024. Its average gross national income per capita for 2020–2022 was $1,111, below the $1,306 graduation threshold.
- The economy remains highly dependent on copper and a few export markets. Copper accounted for 65.3% of merchandise exports in 2022, while the top five export destinations absorbed 74% of exports.
- Growth has not reduced poverty at the scale needed. The poverty headcount rose from 54% in 2015 to 60% in 2022, with rural poverty at 79%.
- Human assets have improved, but deeper investment is needed. Zambia’s Human Assets Index rose from 39 in 2002 to 71.4 in 2024, but gaps remain in education, skills and health services.
The report assesses Zambia’s structural vulnerabilities and what the country needs to do to return to the path towards graduation from the least developed country category.
It shows clear progress in health and education. But it also points to persistent risks linked to income, exports, debt, jobs and climate.
Zambia met the graduation criteria for the first time in 2021, with gross national income per capita of $1,403 and a Human Assets Index score of 68. But it did not meet the criteria at the 2024 review. Its average gross national income per capita for 2020–2022 was $1,111, below the $1,306 threshold.
Zambia needs growth that is less dependent on copper
Zambia’s economy rebounded after the COVID-19 shock. Growth rose from -2.8% in 2020 to 6.2% in 2021 and 5.2% in 2022. But the report shows that growth remains closely tied to copper, exchange-rate pressures and debt vulnerabilities.
Copper accounted for 65.3% of merchandise exports in 2022. The top five export destinations – China, Switzerland and Liechtenstein, the Democratic Republic of the Congo, Singapore and Namibia – absorbed 74% of Zambia’s merchandise exports.
The report says Zambia needs to diversify its production and exports more quickly. This means stronger value addition in agriculture, manufacturing, and minerals. It also means better intersectoral linkages between mining and other sectors of the economy, supported by greater value addition within the extractives, optimal tax and local content policies, as well as trade and industrial policies that promote private sector development.
Jobs and poverty are the test of graduation
Growth has not reduced poverty at the scale needed. The poverty headcount rose from 54% in 2015 to 60% in 2022. Poverty remained much higher in rural areas, at 79%, compared with 32% in urban areas.
Youth unemployment was 17% in 2021. It was highest among young people aged 15 to 24, at 25%. The report says Zambia can leverage its demographic dividend by investing more in health, education and skills, with a particular focus on youth development.
Agriculture is central to reducing poverty. The report finds that growth in agriculture has the highest impact on reducing poverty, followed by manufacturing, construction, and wholesale and retail trade.
It says the Farmer Input Support Programme, which receives nearly $350 million a year, could be redeployed towards agricultural transformation. Priorities include productivity, mechanization, technology adoption, value chains, extension services, research, and monitoring and evaluation.
Human assets improved, but gaps remain
Zambia’s Human Assets Index rose from 39 in 2002 to 71.4 in 2024. This kept the country above the 66-point graduation threshold.
Under-5 mortality fell from 99 per 1,000 live births in 2006 to 56 per 1,000 live births in 2022. Adult literacy rose from 63% in 2006 to 88% in 2020. But the lower secondary school completion rate was still 47% in 2023.
The report says Zambia needs more investment in schools, skills, health services and human capital development.
Momentum depends on resilience
The report sets out a policy agenda for graduation with momentum. It calls for agricultural transformation, stronger manufacturing and export competitiveness, better use of mineral wealth, action on hydropower deficits and climate change, investment in human capital and stronger policy coherence.
Zambia can return to the graduation pipeline by diversifying the economy, increasing value addition including in mining, strengthening non-traditional exports and building a more resilient economy. The goal is to sustain development gains before and after graduation.