Standfirst: Zambians vote on 13 August in a poll that markets are already treating as a referendum on five years of fiscal orthodoxy. Whichever way the count goes, the economics of a second Hichilema term are worth examining on their own terms.
Polls and investors alike expect President Hakainde Hichilema to win a second term on 13 August, facing a fragmented opposition led by first-time contender Brian Mundubile. Before the result is in, it is worth asking a narrower question than who wins: what would five more years of this economic programme actually deliver, and where would it struggle?
The record he would be extending
When Hichilema took office in August 2021, Zambia had defaulted on its Eurobonds, inflation stood at 24.4%, and public debt had reached roughly 130% of GDP. Foreign exchange reserves covered barely two months of imports. The scale of that inheritance is the baseline against which any second-term claim has to be measured.
Since then, roughly 80% of external debt has been restructured, reserves have rebuilt to around $6.5 billion, and inflation fell as low as 6.5% in June this year, its lowest point in more than eight years. None of that happened by accident. It came from a specific policy choice: prioritising IMF-backed fiscal discipline over the populist spending a country in Zambia’s position is often tempted toward.
That choice is also where the criticism starts. Inflation did not fall in a straight line, it spiked to 16.7% in December 2024 on currency weakness and drought, a reminder that the stabilisation is real but not yet shock-proof. And tax revenue still sits at just 16.8% of GDP, barely above the sub-Saharan African average, which means the fiscal space to absorb the next shock without new borrowing remains thin.
What continuity actually buys investors
For copper investors, a second term is not really about Hichilema personally, it is about not having to reprice Zambia’s mining fiscal regime. Government has said it does not intend to change mining tax rates, and the local-content rules under Statutory Instrument 68 are already being implemented rather than debated. Vedanta, Barrick and First Quantum are each mid-expansion. A change in direction now would be more disruptive to the 3-million-tonne copper ambition than a change in personnel.
That continuity premium is real, but it is not unconditional. Zambia’s previous IMF programme ended in January, and a handful of commercial creditors, Afreximbank and TDB among them, are still contesting their treatment in the restructuring. A second term would need to close that file, not just manage it, for the continuity story to hold past the next credit cycle.
The gap the numbers do not close
The uncomfortable part of this record is the one that shows up least in investor briefings: extreme poverty sat at 48% in 2025, barely down from 49% the year before, even as GDP per capita growth accelerated. Unemployment fell to 10.3%, but a falling unemployment rate next to a flat poverty rate usually means people are finding work that does not pay enough to move them off the line.
This is the pattern behind the “Bally will fix it” slogan that carried Hichilema to power in 2021 running up against its own results. The macro turnaround is not in serious dispute. Whether it has reached households as fast as the debt spreadsheets suggest is the argument the opposition has built its campaign around, and it is not an unreasonable one.
What a second term would need to prove
Three things separate a second term that consolidates the recovery from one that stalls on it.
Power supply. Mining expansion and macro stability both run into the same constraint: a hydro-dependent grid that drought keeps exposing. Industry estimates put the shortfall at close to 2,000MW against expansion targets. This is now as much a fiscal question as an engineering one, since load-shedding costs businesses money that shows up later as weaker tax receipts.
Revenue diversification. A tax base stuck near 17% of GDP, and an economy still generating 70% of export earnings from one metal, is not a resilient one. A second term’s credibility on fiscal discipline will depend on whether it can widen the base rather than simply holding spending down.
Translating growth into income. Cash transfers and CDF expansion, from roughly K1.8 million to K36 million per constituency, are the tools currently deployed. Whether they are sized and targeted well enough to move the poverty number, not just the growth number, is the test that actually decides how this term is remembered.
The bottom line
A second Hichilema term, if it materialises as expected, would extend a genuinely rare thing on this continent: five more years of a government that chose fiscal discipline over short-term political comfort, twice. That is worth taking seriously as an achievement. It is also worth being precise about what it has not yet delivered. Investors have their answer already. Zambian households casting a ballot on 13 August are still waiting for theirs.
Key takeaways
- Debt restructuring and disinflation since 2021 are real and measurable achievements, not spin
- Continuity matters most to copper-sector investors already committed to expansion plans
- Poverty and unemployment data show the recovery has not yet reached households at the same pace as the macro numbers
- Power supply and tax-base diversification are the structural risks that would define a second term more than campaign rhetoric will
By Zambian Economist Analyst
Related: UPND’s Elvis Nkandu on why the opposition has offered no alternative policies.
Also read: Kelvin Chisanga: Why Zambia’s election is a major economic event.
