Official unemployment fell to 10.3% in 2025, the joint-best reading in years, but extreme poverty is still close to 48% and most working Zambians earn their living outside any formal payroll.

What Actually Fell

Zambia’s unemployment rate stood at 10.3% in 2025, down from previous years, according to the African Development Bank’s latest Zambia Economic Outlook. The improvement sits alongside a rise in real GDP per capita growth to 2.4%, up from 1.0% in 2024, and the Bank frames it as evidence of “progressively more inclusive growth.”

The number is real. It is also incomplete. A national unemployment rate measures whether someone worked for pay or profit in a reference period. It does not measure whether that work paid enough to live on, whether it came with a contract, or whether it lasted beyond the harvest or the campaign season.

The Informal Economy Problem

Most working Zambians earn their living outside a formal payroll: market trading, smallholder farming, transport, piecework construction and small-scale retail. None of that counts as unemployment in the official statistics, and much of it does not show up in tax records either. A falling headline rate can therefore coexist with rising underemployment, where people who say they are working are doing so for a fraction of a standard week or for income well below the poverty line.

Growth Without Jobs Feeling Like Growth

Real GDP growth was initially estimated at 5.2% for 2025 before the government revised it down to 3.8% in March 2026, matching 2024’s pace, after underperformance in information and communication, wholesale and retail trade, and finance and insurance. Extreme poverty eased only slightly, from 49% in 2024 to 48% in 2025. Put together, growth is translating into fewer jobless people on paper, but not yet into a broad-based lift out of poverty.

Business Implications

A tighter formal labour market can push up wage expectations in sectors competing for skilled staff, from mining services to banking. Employers hiring for formal, salaried roles should expect more competition for qualified candidates even while informal underemployment remains widespread. For retailers and consumer-facing businesses, the poverty numbers matter more than the jobs numbers: nearly half the population still has extremely limited spending power.

Investor and Policy Implications

The Bank of Zambia and the Ministry of Finance and National Planning have both leaned on education, health, agriculture and cash transfers as the main tools for reducing inequality. For investors, the read-through is that Zambia’s growth story remains real but narrow, concentrated in mining, agriculture and energy recovery rather than broad-based job creation. Sustained progress on poverty will depend on whether growth reaches labour-intensive sectors such as agro-processing and construction, not just capital-intensive mining expansion.

Key Takeaways

• Zambia’s unemployment rate fell to 10.3% in 2025, but extreme poverty remains close to 48%.
• Most working Zambians are in informal employment, which the headline unemployment rate does not fully capture.
• Real GDP growth was revised down to 3.8% for 2025, matching 2024, after weaker services performance.
• Education, health, agriculture and cash transfers remain the government’s main levers against inequality.

Related reading: Zambia’s 7.7% GDP Growth: Why It Doesn’t Feel Like It and Zambia Copper Production 2026: Can Copper Deliver Jobs, Growth and Lasting Prosperity?

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