The GDP Fetish and What It Conceals
Guest Writer: Savior Mwambwa
Despite rapid GDP growth averaging 7.7% annually in the 2000s during the copper boom, poverty remained widespread, with 60% of Zambians still below the poverty line in 2022, and between 1996 and 2015, the number of people living in poverty actually increased by 2.5 million. This is not an anomaly but rather a feature of extractive, enclave-style growth.
The IMF’s projections reveal nothing about income distribution, employment quality, structural transformation, or ecological sustainability. They simply measure aggregate output, regardless of who captures that growth or at what cost. Job creation has been driven by low-productivity sectors like agriculture, where output has declined nearly 50% over two decades, suggesting that GDP expansion occurs alongside deteriorating livelihoods for most Zambians.
The Structural Trap
Zambia’s reliance on copper for 70% of export earnings leaves the economy continuously vulnerable to price swings. Copper prices have been extraordinarily volatile, plummeting from $5.22 per pound on March 26 to $4.06 on April 8, 2025, then surging to a new all-time high of $5.65 on July 10. This volatility undermines any notion of sustainable development, creating instead a pattern of boom-bust cycles that enrich foreign capital while leaving domestic populations exposed to external shocks.
The dependency critique remains relevant: Zambia remains locked in a neo-colonial economic structure where it exports primary commodities and imports manufactured goods. Manufacturing contributed just 8.1% to GDP in 2022, while copper contributed 12.9% to GDP but 70% of export revenues. Six decades after independence, the fundamental structure of extraction and underdevelopment persists, merely dressed in the language of “growth” and “reform.”
Pro-Cyclical Austerity Masquerading as Reform
The IMF’s structural adjustment conditions reveal orthodox economics at its most destructive, generating a government surplus of 3.2% by 2025, up from a 6% deficit in 2020, through procyclical budgetary cuts and tax increases, removing VAT exemptions on beverages, cement, coal, and fertilizer, and curtailing subsidies on fuel, seeds, and fertilizer.
This policy package imposes fiscal contraction during acute crisis. Generating fiscal surpluses when inflation hit 16.7% in December 2024, food prices increased by 18.6%, and a 2024 drought cut crop yields by 15% exacerbates poverty and strangles domestic demand. The prescription of austerity during humanitarian crisis reflects ideological commitment rather than economic logic.
Moreover, tax revenues account for only 16.8% of GDP, slightly above the sub-Saharan Africa average of 16.5%. Rather than building state capacity for progressive taxation of mineral rents and wealth concentration, the IMF pushes regressive consumption taxes that disproportionately burden the poor. This represents a failure to address the fundamental issue of domestic revenue mobilization in favor of spending compression that undermines social reproduction.
The Debt Trap and Architectural Failure
Public debt surged to 103.5% of GDP in 2020, and Zambia defaulted on a $42.5 million Eurobond payment in November 2020. The G20 Common Framework has proven inadequate while debt restructuring negotiations have extended nearly four years, holding the economy hostage to creditor interests.
The IMF assessment that Zambia’s public debt is sustainable, but the country remains at high risk of overall and external debt distress reveals contradictory logic. If a country remains at high risk of debt distress, its debt cannot meaningfully be called sustainable. This linguistic contortion obscures the reality that debt service obligations constrain developmental possibilities while ordinary citizens bear adjustment costs through reduced access to health, education, and basic subsidies.
The concept of odious debt applies here much of Zambia’s borrowing financed projects that benefited political elites and foreign capital rather than broad-based development, yet debt service obligations fall on the population as a whole through austerity measures.
Climate Vulnerability and Ecological Constraints
A 2024 drought cut crop yields by 15% and disrupted hydroelectric production, causing electricity shortages that constrain industrial activity. Climate change represents not an external shock but a permanent structural constraint that undermines conventional growth projections.
Agriculture employs approximately 60% of the workforce yet agricultural productivity has declined, with output per worker falling nearly 50% over two decades. Without substantial investment in climate adaptation, irrigation infrastructure, and agricultural transformation, projecting 6.4% growth becomes an exercise detached from ecological and material reality. The IMF framework treats climate impacts as temporary disruptions rather than fundamental challenges requiring transformation of production systems.
What must be done going forward?
A genuine development strategy would prioritize:
Industrial policy focused on downstream copper processing, manufacturing capacity, and value-added production. This requires protective tariffs, directed credit, and public investment precisely what IMF liberalization agendas preclude.
Agricultural transformation through public investment in irrigation, climate-resilient technologies, rural infrastructure, and comprehensive farmer support systems. This contradicts IMF demands for subsidy removal and spending compression.
Fiscal justice via progressive taxation systems, mining taxation reform, capital controls, and debt restructuring or cancellation. This conflicts with IMF emphasis on regressive consumption taxes and creditor protection.
Energy sovereignty built on diversified, publicly-owned renewable energy systems rather than privatized infrastructure that socializes risks while privatizing returns.
Regional integration aimed at building intra-African trade networks and industrial clusters, reducing dependence on raw material exports to the Global North.
Social protection including universal healthcare, education, and income guarantees. This requires expanded rather than compressed social spending.
Conclusion: Growth for Whom?
The IMF projections may materialize if copper prices remain elevated. But the relevant questions are not about GDP growth rates but about structural transformation, distributional outcomes, and developmental sovereignty.
Will Zambians experience improved nutrition, health, and economic security? Will the economy become less vulnerable to external shocks? Will structural transformation occur, or will extractive patterns persist? Will inequality decline or intensify?
Historical evidence suggests pessimistic answers under orthodox policy frameworks. Zambia experienced 7.7% annual growth during the 2000s copper boom while poverty remained endemic and even expanded in absolute terms. Without fundamental restructuring of economic relations, 5.8% growth under similar conditions will likely produce comparable outcomes enrichment of foreign capital and domestic elites while the majority remains impoverished.
Real development requires moving beyond GDP fetishism toward building economic sovereignty, productive capacity, and equitably distributed prosperity. This necessitates challenging rather than reinforcing the structural adjustment paradigm that has dominated African development policy for four decades.
