2013 Index of Economic Freedom

Zambia

overall score58.7
world rank93
Rule of Law

Property Rights30.0

Freedom From Corruption32.0

Limited Government

Government Spending80.3

Fiscal Freedom72.9

Regulatory Efficiency

Business Freedom60.4

Labor Freedom58.4

Monetary Freedom66.0

Open Markets

Trade Freedom82.3

Investment Freedom55.0

Financial Freedom50.0

Embed This Data

Create a Comparison Chart

See how Zambia compares to another country using any of the measures in the Index.

vs
Close
Download PDF
Quick Facts
  • Population:
    • 13.6 million
  • GDP (PPP):
    • $21.9 billion
    • 6.6% growth
    • 6.5% 5-year compound annual growth
    • $1,611 per capita
  • Unemployment:
    • 14.0%
  • Inflation (CPI):
    • 8.7%
  • FDI Inflow:
    • $2.0 billion
Embed This Data

Zambia’s economic freedom score is 58.7, making its economy the 93rd freest in the 2013 Index. Its score has increased by 0.4 point due to improvements in labor freedom, monetary freedom, and freedom from corruption that outweigh a considerable decline in the control of government spending. Zambia is ranked 12th out of 46 countries in the Sub-Saharan Africa region, and its overall score is just below the world average.

The Zambian economy still ranks poorly in many areas of economic freedom. There is a serious need for greater structural reforms to increase the legal framework’s efficiency and transparency and improve law enforcement. Widespread corruption erodes entrepreneurial incentives, and political influence undermines the independence and integrity of legal and regulatory systems.

High youth unemployment and slow progress in improving the investment environment overshadow the benefits of economic growth that has averaged over 6 percent annually over the past five years. Prospects for sustained long-term economic development depend on effective diversification of the production base beyond the mining sector.

Close

Background

In 1991, the government of Kenneth Kaunda, in power since independence in 1964, enacted a new constitution instituting multi-party democracy. Michael Sata of the Patriotic Front won the presidency in 2011, the first time a candidate from a party other than the Movement for Multiparty Democracy had been successful. In April 2012, Zambia released a draft constitution that included press freedoms, decentralized government, a bill of rights, and a 50 percent-plus-1 vote required for a presidential win. Zambia was the world’s third-largest copper producer and a middle-income nation in the 1960s, but falling copper prices and mismanagement of state-owned mines led to steadily declining income from 1974 to 1990. Recent increases in copper prices have boosted trade revenues by 30 percent. High rates of HIV/AIDS, high unemployment, and market-distorting agricultural policies contribute to persistently high poverty rates.

Rule of LawView Methodology

Property Rights 30.0 Create a Graph using this measurement

Freedom From Corruption 32.0 Create a Graph using this measurement

The rule of law remains uneven across the country. The judicial system suffers from inefficiency, government influence, and a lack of resources. Contract enforcement is weak, and courts are relatively inexperienced in commercial litigation. The government lacks the capacity to enforce intellectual property rights laws effectively. Corruption remains widespread, undermining the foundations of economic freedom.

Limited GovernmentView Methodology

The top income and corporate tax rates are 35 percent. Other taxes include a value-added tax (VAT) and a property transfer tax. The overall tax burden equals 16 percent of total domestic income. Government spending has reached a level equivalent to 25.6 percent of GDP. The budget balance has registered chronic deficits, and public debt amounts to 26.1 percent of GDP. The government has initiated large infrastructure projects.

Regulatory EfficiencyView Methodology

Despite some reforms, the regulatory environment is not conducive to entrepreneurial activity. There is no minimum capital requirement for establishing a business, but requirements for commercial licenses are time-consuming and costly. The formal labor market remains inefficient and lacks dynamism. Firms tend to hire workers on an informal or short-term basis. Monetary stability has improved somewhat as inflation has moderated.

Open MarketsView Methodology

The trade-weighted average tariff rate is 3.8 percent, with some non-tariff barriers further distorting the flow of goods and services. Foreign investment is officially welcome, but a modern investment framework is not in place. The financial system is dominated by banking. Zambia has a relatively advanced banking regime, and financial intermediation and credit to the private sector continue to expand.

Country's Score Over Time

Bar Graph of Zambia Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Zambia to other economic country groups

Regional Ranking

rank country overall change
1Mauritius76.9-0.1
2Botswana70.61.0
3Rwanda64.1-0.8
4Cape Verde63.70.2
5Madagascar62-0.4
6South Africa61.8-0.9
7Ghana61.30.6
8Uganda61.1-0.8
9Namibia60.3-1.6
10Burkina Faso59.9-0.7
11The Gambia58.80.0
12Zambia58.70.4
13Tanzania57.90.9
14Gabon57.81.4
15Benin57.61.9
16Swaziland57.20.0
17Mali56.40.6
18Kenya55.9-1.6
19Senegal55.50.1
20Malawi55.3-1.1
21Nigeria55.1-1.2
22Mozambique 55-2.1
23Seychelles54.91.9
24Côte d'Ivoire 54.1-0.2
25Djibouti53.90.0
26Niger53.9-0.4
27Cameroon52.30.5
28Mauritania52.3-0.7
29Guinea51.20.4
30Guinea-Bissau51.11.0
31Central African Republic50.40.1
32Ethiopia49.4-2.6
33Liberia49.30.7
34Burundi490.9
35Togo48.80.5
36Sierra Leone48.3-0.8
37São Tomé and Príncipe 48-2.2
38Lesotho47.91.3
39Comoros47.51.8
40Angola47.30.6
41Chad45.20.4
42Republic of Congo 43.5-0.3
43Equatorial Guinea42.3-0.5
44Democratic Republic of Congo39.6-1.5
45Eritrea36.30.1
46Zimbabwe28.62.3
See Entire Region List ›

View all countries ›

Back to Top