The Economic System of Zambia: An Analysis

Zambia's economic system is a mixed economy that pairs market and planned features, built largely on copper mining, which generates more than 75% of export earnings, plus maize, tobacco, and a growing tourism sector. What type of economic system does Zambia have? The 2025 Index of Economic Freedom scores it 50.9, ranking 142nd globally and rating it mostly unfree.

Zambia economy — Financial growth chart (illustrative). Photo: Pexels.

What is the economic system of Zambia? The economy of Zambia is based on a mixed economy. The country’s economic system combines elements of a market economy and a planned economy.

Zambia’s economy is largely agrarian, with maize, tobacco, and sugarcane being key crops. Mining, especially copper, contributes significantly to GDP and exports — copper generates more than 75% of the country’s export earnings. Tourism, hinged on Victoria Falls and wildlife, is growing, though infrastructural challenges persist.

In Zambia, the economy is composed of a private sector, consisting of individuals and businesses that make autonomous decisions based on self-interest, and a public sector, where the state determines the production and distribution of certain goods and services. No country is purely capitalist or purely communist.

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What do the freedom indexes tell about the economic system of Zambia?

Now, to determine if a country is mostly a market economy or a planned economy, it is useful to examine some economic indexes. For instance, according to the 2025 Index of Economic Freedom, which measures the ability of every human to control his own labor and property, Zambia is ranked 142nd globally and 33rd in Sub-Saharan Africa with a score of 50.9, indicating that the country has a mostly unfree economy.

In a similar way, the 2025 Freedom House index evaluates the state of political rights and civil liberties globally. Generally, market economies tend to align more with democracy and freedom, while command economies tend to be characterized by greater state control and fewer democratic and civil liberty protections.

Zambia gets a score of 53/100 in the 2025 Freedom House report, which qualifies it as Partly Free. Zambia is considered to have a government that does not control what people do, and people can make their own economic decisions, but it is only considered an electoral democracy, lacking full liberal democratic protections.

The Link Between Public Sector Employment and the Economic System of Zambia

An indicator of the extent to which the State is involved in the economy is the number of public sector employees. In Zambia, according to ILOSTAT, the number of public sector employees as a percentage of the total workforce is 6.7% (2019).

In the country’s mixed economy, the number of public sector employees as a percentage of the total workforce varies based on the specific policies and practices adopted by the State.

Some economic activities are left to the private sector while others are under government control. The bigger the public sector the closer is the economy to being a command economy.

Industry and trade in Zambia — Open-air market bazaar (illustrative). Photo: Pexels.

What do the biggest companies in Zambia say about the country’s economic system?

The biggest company in Zambia should also be looked at, as well as whether it is a state-owned or private company. In this case, Kansanshi Mining is a copper mining company that produces copper concentrate for export and is one of the largest copper mines in Africa. In August 2025, First Quantum Minerals opened the $1.25 billion S3 expansion at the Kansanshi mine, extending its operational lifespan through 2046.

The company is owned by First Quantum Minerals Ltd., a Canadian-based mining and metals company. It shows how the biggest companies in the country are privately owned, in this case by multinationals.

The historical factors that have influenced the economic system of Zambia

The current mixed economy system of Zambia is a result of the country’s colonial history, its post-independence economic policies, and its current economic structure.

Colonial rule saw the introduction of a capitalist system, while post-independence policies focused on state-led development and the promotion of private enterprise. This has resulted in a mixed economy with a strong public sector, a large informal sector, and a growing private sector.

Zambia defaulted on its external debt in 2020, becoming the first African country to default during the COVID-19 pandemic. In March 2024, Zambia reached a landmark restructuring agreement with bondholders worth approximately $3 billion, which included roughly $840 million in debt forgiveness. The deal marked a key turning point in Zambia’s economic recovery, supported by the IMF’s Extended Credit Facility program. As of 2025, Zambia’s GDP is estimated at approximately $28.9 billion, with real GDP growth projected at around 5.2–6.2% and inflation easing toward single digits after peaking above 15% in 2024 (IMF, World Bank).