Zambia has spent the better part of a decade learning that stability is not the same as growth. The hard arithmetic of debt restructuring, fiscal consolidation and inflation control has steadied the ship, but a steady ship that does not move is still stuck. The IMF’s diagnosis at the close of its recent staff visit accepts that the stabilisation work is largely done and asks the next question: what actually drives the economy forward once the books are balanced. Its answer is a shift in who does the driving — from the state to the private sector.
Under a successor Extended Credit Facility, the Fund framed the priorities as consolidating stability while pivoting to inclusive, private-sector-led growth through non-distortive industrial policy. The named engines are familiar but specific: copper value addition, energy supply and agri-business, tourism and textiles. The phrasing matters as much as the list.
Non-Distortive: The Adjective Carrying the Argument
“Non-distortive” is the load-bearing word. Industrial policy in much of Africa has historically meant subsidies, protection and state-picked champions — interventions that often outlast their usefulness and entrench the inefficiencies they were meant to cure. The IMF is endorsing industrial policy while ruling out that version of it.
What it points to instead is the enabling kind: reliable power, predictable rules, functioning logistics, competitive input costs and a tax regime that does not punish formalisation. The state’s job, on this reading, is to remove the frictions that stop private capital from flowing into value addition, not to substitute for that capital. As the IMF concluding statement frames it, the model is enabling, not commanding.
Takeaway: the prescription is not less industrial policy — it is industrial policy that builds the road and lets others drive it.
Copper Plus: From Ingot to Industry
The sequencing of the named sectors is a strategy in itself. Copper value addition sits first because it is where Zambia’s comparative advantage is most underexploited. The country digs and exports the metal; it captures little of the margin that sits in wire, rod, cable and the cobalt chemistry feeding the battery economy. Moving up that chain is the single largest available step from commodity dependence to industrial earnings.
Energy supply and agri-business come next because they are the binding constraints. Value addition needs reliable power, and a drought-exposed grid cannot guarantee it; agro-processing needs both energy and a stable feedstock. Solve power and you unlock both manufacturing and processing at once. Tourism and textiles round out the list as labour-intensive, foreign-exchange-earning sectors that broaden the base beyond mining and spread the gains more widely — the “inclusive” half of the brief.
Takeaway: the order of the list is the order of the bottlenecks — power and processing first, then everything they unlock.
The Inclusive Test: Who the Growth Reaches
The word “inclusive” is doing quiet but real work alongside “private-sector-led”. Copper-led growth can be real and still narrow, concentrating gains on the Copperbelt and in capital-intensive operations that employ relatively few. Pairing the mineral story with textiles, tourism and agri-business is how the strategy reaches the labour market — the smallholders, the small manufacturers, the service workers who do not appear on a mining balance sheet.
For operators, the signal is a green light with conditions. The state is being told to enable rather than direct, which favours firms ready to invest in beneficiation, processing and labour-intensive export sectors. But the green light depends on the enabling work actually being done — the power, the rules, the logistics. A list of priority sectors is a destination. Whether Zambia builds the road to it is the year’s real test.
Takeaway: Zambia has been handed a map from extraction to industry; the private sector will only travel it if the state clears the road first.
