Zambia's unemployment rate has fallen from 12.9 percent in 2024 to 9.9 percent in 2025. It is an important improvement and, taken at face value, welcome news for an economy that has struggled to generate enough productive employment for a rapidly growing population. But the headline number also illustrates one of the problems with how we talk about unemployment in Zambia: the unemployment rate tells us about people looking for work, but not enough about the jobs available for them to find.
The first distinction is mathematical. A 9.9 percent unemployment rate does not mean that one in ten Zambians of working age is unemployed. It means that approximately one in ten people in the labour force are unemployed. ZamStats estimates that Zambia had a working-age population of 12.8 million people aged 15 and above in 2025. About 5.28 million were in the labour force, of whom 4.76 million were employed and 523,751 were unemployed.
This is why the employment-to-population ratio is just as important. It increased from 33.1 percent in 2024 to 37.1 percent in 2025. In simple terms, only around 37 out of every 100 people aged 15 and above were employed. Labour-force participation also increased from 38.0 percent to 41.2 percent. That combination is encouraging because more people entered the labour market while unemployment simultaneously declined.
But the numbers become considerably more uncomfortable when we look at young people. Unemployment among people aged 15 to 24 was 23.9 percent in 2025. In ordinary language, that is approximately one in four young people in the labour force. For Zambia's nationally defined youth population, the unemployment rate was 14.2 percent, or roughly one in seven.
Even that does not capture the full problem. About 2.09 million young people aged 15 to 24 were estimated to be neither in employment, education nor training. This is the group that should worry policymakers because time spent outside both work and education can represent lost experience, lost skills and ultimately lower lifetime earnings.
The question, therefore, should not simply be: How many Zambians are unemployed? It should also be: How many jobs is the economy actually creating, where are those jobs, what skills do they require and how many vacancies remain unfilled?
This is where Zambia could learn something from how more sophisticated labour-market systems operate elsewhere. In the United States, for example, unemployment is accompanied by the Job Openings and Labor Turnover Survey, or JOLTS. The US Bureau of Labor Statistics tracks not only unemployment but also job openings, hires, quits, layoffs and other separations. In August 2026, the US economy had approximately 7.08 million job openings, equivalent to a 4.3 percent job-openings rate, alongside information on roughly 5.19 million hires and 5.07 million total separations.
The point is not that Zambia should copy the United States mechanically. The point is that unemployment is only one side of a labour market.
The other side is demand for labour.
If 500,000 people are unemployed but businesses are simultaneously reporting 100,000 vacancies, the problem may be partly one of skills, geography, wages or information. If there are 500,000 unemployed people but almost no vacancies, the problem is much more fundamentally one of insufficient demand for labour. Those are two very different economic problems requiring two very different policy responses.
Zambia has actually taken an important step in this direction. The Ministry of Labour and Social Security launched a Labour Market Information System in 2025 designed to connect information about labour supply and demand, employment opportunities, skills shortages, qualifications and emerging job trends. The system explicitly recognises that the labour market is where workers and employers meet and that better information can improve the matching of skills to opportunities.
The next step should be to make that system considerably more ambitious.
Zambia should know, preferably on a quarterly or even monthly basis, how many jobs employers are trying to fill, which occupations are experiencing shortages, how long vacancies remain open, how many people are being hired, how many are leaving jobs, which sectors are expanding and which are contracting. We should know whether companies are unable to recruit because there are insufficient skilled workers, because wages are too low, because vacancies are concentrated in particular provinces, or simply because there are not enough businesses creating jobs.
A national Job Openings and Labour Turnover series could become one of the most useful economic indicators Zambia produces.
It could sit alongside unemployment in the same way that inflation sits alongside interest rates. Instead of asking only whether unemployment has fallen, policymakers could ask whether vacancies are rising, whether hiring is accelerating and whether firms are struggling to find workers.
That would also make the discussion around skills development much more concrete. Rather than training young people simply because they are unemployed, government could increasingly train people for occupations where employers are actually reporting persistent vacancies.
This matters because Zambia's employment problem is not simply one of joblessness. It is also a problem of job matching.
There is another complication: not every person without a conventional job is statistically unemployed. ZamStats itself has explained that the standard unemployment definition requires a person to be without employment, available for work and actively seeking work. People who want work but have stopped looking, are unavailable to start immediately or otherwise fall outside those criteria can be excluded from the strict unemployment measure. ZamStats therefore also points to broader measures such as potential labour force, underemployment and discouraged job seekers.
That is particularly important in Zambia, where informal economic activity is extensive. About 3.02 million employed people, or 63.4 percent of total employment, were estimated to be in informal employment in 2025. This was actually an improvement from 68.3 percent in 2024, but it remains a defining feature of the labour market.
A person selling vegetables, running a small shop, farming, driving for income or operating a small informal enterprise may not be unemployed. But that does not necessarily mean that the person has a sufficiently productive or secure livelihood. This is why unemployment statistics need to be considered alongside earnings, hours worked, underemployment, informality and productivity.
The youth figures make this particularly urgent. A young person who is technically employed but earns very little from irregular informal work is experiencing a different labour-market reality from a young person in a stable, productive job with training and prospects for higher earnings.
This brings us to the more interesting macroeconomic question: how much further can unemployment fall before Zambia begins to experience labour shortages and wage pressures?
This is where the concept of the Non-Accelerating Inflation Rate of Unemployment, or NAIRU, becomes useful. The NAIRU is an estimated level of unemployment consistent with relatively stable inflation. If unemployment falls persistently below it, employers may increasingly compete for scarce workers, wages may accelerate and businesses may pass higher labour costs into prices.
But Zambia should not simply borrow a NAIRU estimate from the United States or another economy and apply it here. Zambia's labour market is structurally different. Informality is high, labour-force participation is relatively low, agriculture remains important and workers frequently move between formal employment, informal activity, unemployment and economic inactivity.
The better approach would be to estimate a Zambia-specific NAIRU or, perhaps more realistically, a range of unemployment consistent with stable inflation. Such an exercise could examine unemployment, inflation, wage growth, GDP growth, productivity, vacancies and labour-force participation over time.
That would give policymakers another important piece of information. If unemployment is still substantially above the level consistent with full utilisation of labour, Zambia may have considerable room to expand productive investment and employment without immediately creating significant wage and inflationary pressures. But if vacancies begin rising rapidly while unemployment falls, the constraint could shift from a shortage of jobs to a shortage of skills.
That distinction matters enormously for economic policy.
If Zambia's problem is insufficient demand for labour, the answer lies partly in investment, business formation, infrastructure, exports and economic expansion. If the problem is skills mismatch, the answer is different: apprenticeships, vocational training, better labour-market information and closer links between employers and training institutions become more important.
If the problem is geographical mismatch, then transport, housing and migration constraints matter. If the problem is poor wages relative to the cost of living, employers may report vacancies even when large numbers of people are technically unemployed.
These are questions that a single unemployment rate cannot answer.
Zambia's 9.9 percent unemployment rate is therefore worth celebrating, but it should not become the final word on the labour market. The more important question is what is happening underneath it.
Are vacancies increasing? Are employers hiring? Are wages rising? Are young people moving from school into productive employment? Are firms struggling to find skilled workers? Are people working enough hours? Are informal workers becoming more productive? And is economic growth creating jobs faster than the working-age population is growing?
These are the numbers Zambia increasingly needs.
The country has already built the beginnings of the institutional infrastructure through the Labour Market Information System. The next step should be to turn that system into something closer to a national labour-market dashboard: unemployment, participation, vacancies, hiring, separations, wages, skills shortages, underemployment, informality and youth NEET rates in one place.
That would change the conversation from “How many people are unemployed?” to the much more useful question:
“Is the economy generating enough productive work, and does the workforce have the skills to fill it?”
That is ultimately the employment test for the Grow Zambia agenda.
A falling unemployment rate is good news. But the real measure of economic transformation is whether Zambia can turn its growing working-age population into a growing productive workforce.
