Zambia After the Oath: The Economic and Diplomatic Tests of Hichilema’s Second Term

Hakainde Hichilema’s oath at National Heroes Stadium settled who leads Zambia until 2031. It did not settle whether five calmer macroeconomic years can be turned into a new IMF arrangement, a tripled copper industry and a foreign policy that survives the scrutiny his own re-election has drawn.

By The Zambian Economist Analyst | Lusaka | 1 September 2026

Hichilema’s second term opens with a narrower excuse than his first. He inherited a defaulted economy in 2021. He hands himself one where debt has been largely restructured, inflation has fallen for consecutive months and government bonds are finding buyers again. What happens next in the economy, and in Zambia’s relationships abroad, depends less on Tuesday’s ceremony than on decisions still to be made: whether the IMF signs a new programme this year, whether copper output actually moves toward the government’s target, and whether the goodwill on display at National Heroes Stadium survives the treason case unfolding a few kilometres away at Mukobeko Maximum Security Prison.

A calmer inheritance than 2021

The macro numbers Hichilema starts his second term with are better than the ones he started his first with, by a wide margin. Inflation came in at 6.2% in August 2026, down from 6.5% in July and inside the Bank of Zambia’s target band of 6 to 8%. Public external debt is, in the IMF’s words, largely restructured following four years of talks with bondholders and bilateral creditors. The central bank has been easing rather than defending the currency, cutting its policy rate by 25 basis points to 13.25% at its most recent review.

Investors noticed. The first government bond auction after the election drew bids worth 37% more than the K6.3 billion on offer, and yields on seven-year paper fell by more than a percentage point. Zambia’s 2033 dollar bond traded at 97.72 cents on 18 August, holding up better than much of the wider African sovereign debt market that week.

Hichilema has staked his second term on turning that macro stability into something voters can feel in their pockets. “This term will focus on two things above all: bringing down the cost of living and creating more jobs,” he told Zambians ahead of the vote. “Every decision this Government takes over the next five years will be measured against those two tests.” It is a narrower promise than the reform agenda he ran on in 2021, and a harder one to duck: turnout fell to 57% in August, from 70% five years ago, a drop the Institute for Security Studies has linked to living-cost frustration among voters who feel the statistics more than they feel the relief.

The economic tests ahead

Will Zambia get a new IMF programme before the end of 2026?

The government says yes, and is treating it as the year’s central fiscal task. Zambia’s previous arrangement, a $1.7 billion Extended Credit Facility, expired in January after anchoring the restructuring of roughly $13 billion in external debt. Musokotwane has told investors Zambia is not yet ready to return to the Eurobond market on its own, and wants a new IMF arrangement in place first to signal continued discipline. Analysts expect Zambia to test the Eurobond market again once that relationship is renewed. “It would just build out a curve,” Philip Fielding of Fidelity International has said of a fresh issuance, allowing Zambian borrowers to price debt more competitively across a range of maturities. Until then, the 2033 bond is the closest thing markets have to a live verdict on the government’s credibility.

Copper: ambition against arithmetic

Copper still funds the state, and the government’s growth strategy leans on it more heavily each year. Output rose 8% in 2025 to 890,346 tonnes. Policy now targets 1 million tonnes in the near term and 3 million tonnes a year by 2031, a target that would require output to grow by roughly 22% annually from current levels, a pace Zambia has not sustained in decades.

Two policy levers sit underneath that target. A 10% export duty on unprocessed copper concentrate, designed to push mining houses toward refining cathode locally rather than shipping ore, is waived until 30 September 2026. And new local-content regulations require mining companies to source at least 20% of annual procurement from Zambian firms, a share that rises to 40% within five years. Both are aimed at capturing more value inside Zambia’s borders rather than exporting it in raw form, a long-standing complaint of the Zambia Chamber of Mines and successive governments. Whether output actually reaches the 2031 target depends on factors the government does not fully control: global copper prices, the pace of expansion at established mines on the Copperbelt, and Zambia’s own electricity supply, which the World Bank has previously flagged as a constraint on mining growth.

The fiscal arithmetic behind all of this has loosened slightly. The primary surplus the previous IMF programme targeted was 3.8% of GDP; the 2026 outturn is expected to fall about a percentage point short, a gap the IMF attributes to the public sector wage bill, farm input subsidies and election-year spending. None of that derails the restructuring, but it narrows the margin the new finance team will have to work with when IMF negotiators next visit Lusaka.

What the international community is watching

The inauguration itself told two stories at once. On the terraces of National Heroes Stadium sat five sitting presidents, Tanzania’s Samia Suluhu Hassan, Kenya’s William Ruto, Namibia’s Netumbo Nandi-Ndaitwah, Zimbabwe’s Emmerson Mnangagwa and Botswana’s Duma Boko, alongside China’s vice-presidential envoy Xian Hui and senior representatives from the United States, the United Arab Emirates, Rwanda, Malawi and Eswatini. Most of the governments in that room hold direct interests in the railways, border posts, power links and mining projects that will shape Zambia’s next five years, and their presence reads as a bet on policy continuity.

A few kilometres away, a different story was unfolding. Eighteen people aligned with Brian Mundubile’s National Reconciliation Party for Unity and Prosperity, including Mundubile and his running mate Makebi Zulu, face treason charges, and were moved to Mukobeko Maximum Security Prison on 31 August, a day before the inauguration. The government says the group was planning a coup with the help of foreign militia. Mundubile has called the charges fabricated. An Anglican bishop was also detained during the arrests; his family reported losing contact with him for two days.

That case has drawn a level of international attention Zambia’s politics rarely attracts. UN human rights chief Volker Turk said he was “deeply concerned” and urged the government to “stop arresting people arbitrarily and uphold fully the due process rights” of those detained, including prompt access to lawyers, family contact and appearance before a judge. The European Union’s election observation mission went further on the vote itself, concluding that the “broader electoral process took place in an environment that limited fundamental freedoms,” and pointing to “late legal changes, legal uncertainty, and unequal campaign conditions” that it said distorted the contest. The Commonwealth Secretariat separately raised concern over the post-election security operations.

The joint African Union-COMESA observer mission was more measured but not silent. It found voting “generally peaceful and orderly” in 98.6% of the polling stations its observers visited, yet flagged the Electoral Commission’s decision to suspend counting nationwide on 14 August, Mundubile’s premature declaration of victory before results were confirmed, and the arrest and charging of journalists during the campaign. It also noted that electoral legislation was enacted only three months before the poll, short of the six months international best practice recommends, and that the share of female candidates fell to 12.5% from 21% in 2021 under the new mixed-member electoral system. Only 66% of polling stations opened on time, against 89% in 2021.

None of this has visibly cooled Zambia’s relationships with its largest partners. UK Foreign Secretary Ed Miliband said the two countries “share a longstanding friendship rooted in Commonwealth ties” and pledged to deepen the partnership through Hichilema’s second term. World Economic Forum president Alois Zwinggi congratulated Hichilema and committed the Forum to continued cooperation on Zambia’s development priorities. The government, for its part, has pushed back on the tone of the criticism rather than its substance, arguing publicly that the EU’s election recommendations must fit Zambia’s own national priorities rather than be adopted wholesale.

What does the world expect from Hichilema’s second term?

In practice, two things that sit in some tension. Development partners and investors want continuity on the macroeconomic programme and on copper: debt discipline, a renewed IMF arrangement, and the power and rail investment that a tripled mining sector would need. Rights bodies and several Western and Commonwealth governments want the treason case handled through ordinary due process, and want the legal and administrative gaps the AU-COMESA mission documented closed before Zambia votes again. How Hichilema manages that second demand, without appearing to bow to external pressure on a domestic prosecution, will shape how much benefit of the doubt his government gets the next time results are close.

Business, investor and policy implications

For businesses: the immediate signal is that macro conditions are stabilising even where household costs are not. Firms exposed to government and parastatal payment cycles, which slowed during the counting delays in August, should see the disruption ease as the new administration settles in. The rising local-content thresholds in mining, 20% now, 40% within five years, are a genuine procurement opportunity for Zambian suppliers of transport, catering, safety equipment and light engineering services to the Copperbelt.

For investors: the bond market has already given its interim verdict, and it is a positive one. The swing factor for the rest of 2026 is timing: whether Zambia and the IMF reach staff-level agreement on a new programme before year-end, as the government hopes, or whether the fiscal slippage on the primary surplus pushes that timeline into 2027. A confirmed programme, followed by a return to Eurobond markets, would be the clearest marker yet that the 2020 default is fully behind Zambia.

For policymakers: the test is holding the cost-of-living and jobs promise alongside fiscal discipline, while managing six live parliamentary petitions and a rerun vote in Mandevu in a way that satisfies both domestic courts and the foreign observer missions now watching Zambia’s institutions more closely than at any point since 2021.

What happens next

• The cabinet. Law caps it at 30 ministers, drawn from among MPs. The names will tell markets and diplomats far more about the next five years than the ceremony did.
• Mandevu, 24 September. The first fresh vote since the counting suspension is a public test of the Electoral Commission’s procedures, watched closely after the AU-COMESA mission’s findings.
• Six High Court petitions. Each runs on a 90-day clock and will shape how settled the new Parliament’s numbers really are.
• The 2027-2031 Medium-Term Revenue Strategy. Consultations are already running, meaning the incoming finance team inherits a budget process already in motion rather than starting from a blank page.
• An IMF staff-level agreement. The government’s own target date is before the end of 2026.

The economic numbers point one way: toward continuity, a calmer inflation profile and a government trying to convert debt relief into an actual copper boom. The treason docket and the six court petitions point to how much of this mandate Hichilema is willing to spend proving Zambia’s institutions work for everyone, not only for the side that won. Both stories are still being written, and the next entries, the cabinet list and the IMF’s answer, are due within weeks.

Related reading

• Full Text: Hichilema’s Second Inaugural Address and What It Means for the Economy
• Hichilema Takes the Oath as His Second Term Begins at National Heroes Stadium
• Hichilema Sworn In for Second Term as African Leaders Gather in Lusaka
• Hichilema’s Second Inauguration: Zambia Now Waits for the Cabinet That Will Define His Final Term
• NRPUP Leaders Charged With Treason as Docket Rises to 18
• Six Parliamentary Seats Challenged Before the Lusaka High Court
• Zambia Says EU Election Recommendations Must Fit National Priorities
• Ten Days That Tested Zambia: Hichilema’s Re-election, Sealed Courts and a Cooling Inflation Rate
• Zambia to Launch 2027-2031 Revenue Strategy Consultations
• The Economics of Zambia’s 2026 Election (pillar page)
• Economic Diplomacy and Zambia in the Global Economy (pillar page)
• 2026 Zambia Election Results Dashboard

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