Bank of Zambia Credits Mining Inflows for Kwacha Gains

The Bank of Zambia (BoZ) has attributed the Kwacha's near 15 per cent appreciation against the United States dollar in the first quarter of 2026 to robust foreign exchange inflows from the mining sector.

BoZ Governor Denny Kalyalya said the local currency strengthened by 14.8 per cent against the dollar, buoyed by higher inflows from mining companies and foreign financial institutions. Net foreign exchange sales by mining firms reached 626 million dollars in the first quarter, with mining tax remittances to the central bank totalling close to 290 million dollars.

Dr Kalyalya said overall foreign exchange liquidity from the mining sector climbed to more than 915 million dollars, compared with around 759 million dollars in the previous quarter. He added that foreign financial institutions injected a further 542 million dollars into the market, bolstering liquidity across the wider economy.

The Governor said the mining sector's continued strength remains pivotal to stabilising the foreign exchange market and underpinning Zambia's broader economic recovery. Looking ahead, Dr Kalyalya said the country's medium-term outlook remains positive, with mining set to anchor growth alongside agriculture and electricity generation.

The economy is forecast to expand by an average of 4.9 per cent between 2026 and 2028, despite headwinds from the conflict in the Middle East and the prospect of adverse weather linked to El Niño.

ZANACO echoed the Governor's assessment, describing mining as central to Zambia's recovery and long-term growth prospects. ZANACO Chief Risk Officer Mutisunge Zulu said Zambia produced approximately 891,000 tonnes of copper in 2025, the highest output since independence, with production projected to surpass one million tonnes in 2026.