Drought dries up business confidence

Drought in 2024 contributed to a drop in business confidence, with Zambia dropping from eighth to tenth in the Standard Bank Africa Trade Barometer (SB ATB). Some 29% of the business leaders polled in 2025 were pessimistic compared to 24% in August 2024. “This pessimism may, in part, be due to the lingering impact of the unprecedented 2023– 2024 El Niño drought, which led to severe power outages that persisted into early to mid- 2025, subjecting businesses to between 12 and 21 hours of load shedding per day,” according to the report authors. There could be a repeat in 2026 if the predictions of a “Super El Niño” drought are accurate. The impact of the drought was one of the themes running through the 2026 budget address by Situmbeko Musokotwane, minister of finance and national planning. “Zambia and our region experienced the worst drought in 2024, never seen in our living memory,” he said. The Bank of Zambia supported business through a K5 billion (R4.3bn) Stability and Resilience facility. “Demand on the facility has been overwhelming, with approximately K4.7bn (R4.2bn) approved mainly to the agriculture, manufacturing and energy sectors,” he said. Another measure taken to improve climate resilience is the development of drought- resistant crop varieties for maize, millet, sorghum, cowpea and cassava. Despite the drought, Zambia experienced the largest real GDP growth improvement among surveyed countries, with real GDP growth increasing to 5.1% in 2025, compared to 4% in 2024, according to the SB ATB. The barometer focuses on Angola, Ghana, Kenya, Mozambique, Namibia, Nigeria, South Africa, Tanzania, Uganda and Zambia. The Zambian GDP recovery was driven by several key factors. “First, agricultural output rebounded strongly following the severe drought of 2024, as adequate rainfall returned in 2025 and enabled farmers to restore production levels. “Second, copper mining production surged, with output rising by 30% as early as the first quarter of 2025, boosting export revenues, a critical contributor to Zambia’s GDP given that copper is the country’s primary export. “Third, the economy benefited from stable fiscal policy underpinned by the IMF’s Extended Credit Facility programme.” ER