Zambia economic month in review: October 2026

KSJ’s monthly round-up of Zambia’s economic data for October 2026: prices, the kwacha, interest rates, money and trade, and what drove them.

At a glance

• Annual inflation: 6.3% in October (6.1% in September)
• Breakfast mealie meal: K235.86 a 25 kg bag in October
• Kwacha: K19.42 per US dollar in September (monthly average)
• Copper: $14,416 a tonne in September
• Policy rate: 13.25% at the end of September
• Trade: a deficit of $186.4m in September

What happened in October

October brought a mixed picture for Zambia's economy. Inflation edged higher for the first time since December 2025, but the increase was driven by non-food prices rather than food. Fuel prices recorded a sharp increase during the month, while mealie meal prices remained lower than a year earlier.

The kwacha also came under renewed pressure, even as copper prices remained strong. Meanwhile, Government's K19.9 billion supplementary budget put domestic borrowing, interest rates and the availability of credit to businesses back into focus.

The 2027 Budget, initially scheduled for 30 October, was postponed to 6 November. Its eventual presentation will provide a clearer picture of Government's fiscal position and financing requirements heading into 2027.

Prices

Annual inflation rose to 6.3% in October from 6.1% in September, its first rise since December 2025. Prices rose 0.7% during October itself, after 0.4% in September.

Food inflation fell to 5.7% in October from 5.8% in September, while non-food inflation rose to 7.4% from 6.6%.

The split is important. Food prices continued to ease, helping to contain the overall inflation rate, while non-food prices accelerated. The increase in fuel prices was a major part of that shift, with implications for transport and the cost of moving goods around the country.

The national average price of a 25 kg bag of breakfast mealie meal fell 0.2% to K235.86 in October, 10.2% lower than a year earlier. Roller mealie meal fell 0.1% to K181.99 in October, 11.8% lower than a year earlier. A 20-litre tin of maize grain rose 5.2% to K106.98 in October.

At the pump, petrol rose 24.4% to K31.46 in October, and diesel rose 23.8% to K33.25 (national averages per litre).

The fuel increase was one of October's clearest price shocks. Unlike a rise in the price of one food item, fuel can spread through the economy via transport, distribution, production and other operating costs.

That makes the composition of inflation worth watching in the months ahead. Food prices are providing some relief, but energy and other non-food costs are moving in the opposite direction.

Markets

The latest figures here are for September 2026, as published by the Bank of Zambia; each figure gives its month.

The kwacha averaged K19.42 per US dollar in September, weaker than in August (K18.90) and stronger than a year earlier (K23.78). At bureaux de change the dollar averaged K21.60, 11.2% above the official rate.

The September average does not capture the full movement seen during October, when the kwacha came under renewed pressure. A weaker currency matters beyond the foreign-exchange market because Zambia imports fuel, machinery, vehicles, food and a wide range of intermediate goods.

Copper rose 1.9% to $14,416 a tonne in September; Dubai crude rose 18.5% to $95.56 a barrel (monthly averages).

For Zambia, the two commodities move in opposite directions economically. Higher copper prices strengthen export earnings and foreign-exchange supply, while higher oil prices increase the country's import bill.

The Bank of Zambia’s policy rate stood at 13.25% at the end of September, unchanged since May. Commercial banks’ average lending rate rose to 27.70% in September from 27.29% in August. The interbank rate held at 13.25% in September. At the Treasury bill auctions, the 91-day yield fell to 9.75% in September from 10.50% in August, and the 364-day yield fell to 11.90% from 12.10%.

The rate picture remains mixed. Treasury bill yields have fallen, but commercial bank lending rates remain high. In other words, lower short-term government yields have not yet translated into cheap borrowing for businesses and households.

That distinction becomes more important as Government seeks additional domestic financing. The K19.9 billion supplementary budget could increase competition for domestic funds, making the interaction between Government borrowing, liquidity and private-sector credit an important issue to watch.

Money & banking

The latest figures here are for August–September 2026, as published by the Bank of Zambia; each figure gives its month.

Broad money (M3) was 3.9% larger in August than a year earlier, against 7.7% in July. Credit to the private sector stood at K106.0bn at the end of August, 9.7% higher than a year earlier. Commercial banks’ kwacha loans came to K108.6bn, 17.0% higher than a year earlier. Banks’ core liquid assets averaged 59.07% of deposits in September, against a required minimum of 6.00%.

The banking system therefore remains highly liquid, while lending continues to grow. But liquidity and affordability are not the same thing. Businesses may have access to a banking system with substantial liquidity while still facing borrowing costs that make investment and expansion difficult.

The next question is whether credit growth can continue without putting additional pressure on inflation, the exchange rate or the cost of domestic financing.

Reserves & trade

The latest figures here are for June–September 2026, as published by the Bank of Zambia (reserves) and the Zambia Statistics Agency (trade); each figure gives its month.

Gross international reserves stood at $5,802m at the end of June, down 10.6% on the month, enough to pay for about 4.5 months of imports.

Zambia ran a trade deficit of $186.4m in September, after a surplus of $48.0m in August. Exports fell 8.1% to $1,606.4m in September, and imports rose 5.4% to $1,792.8m.

The trade deficit is a reminder that strong commodity prices alone do not determine Zambia's external position. Export earnings also depend on the volume and timing of shipments, while imports determine how much foreign exchange leaves the country.

For the kwacha, the combination of strong copper prices, higher import demand and movements in the oil price will remain important as the year draws to a close.

What October tells us

October's economic story is less about the headline inflation rate than about what is happening underneath it.

Food prices are relatively contained. Mealie meal is cheaper than a year ago and food inflation continues to ease. But fuel prices jumped sharply, pushing non-food inflation higher and creating a potential second-round effect across transport and business costs.

The kwacha also came under renewed pressure, while copper remained a major source of external support. At the same time, commercial lending rates remain high despite lower Treasury bill yields.

The fiscal picture is becoming increasingly important. Government's K19.9 billion supplementary budget, and the proposed reliance on domestic borrowing, means that fiscal financing could increasingly influence interest rates, liquidity and private-sector access to credit.

The 2027 Budget, now due in November, will provide the next major test.

For businesses, the question going into November is therefore not simply whether inflation is rising or falling. It is whether fuel prices, the kwacha and Government borrowing begin to reinforce one another — or whether strong copper earnings and easing food prices continue to provide a buffer.

About the data

Inflation, household prices and trade come from the Zambia Statistics Agency’s monthly bulletin; the kwacha, commodity prices, interest rates, money, banking and reserves from the Bank of Zambia’s fortnightly statistics. Monthly figures are averages for rates and prices and end-of-month levels for stocks. Data available: Prices to October 2026; Markets to September 2026; Money & banking to August–September 2026; Reserves & trade to June–September 2026. The charts end at October 2026; explore every series on KSJ Analytics.