Zambia's annual inflation rate climbed to its highest point in nearly four years in September, while the economy grew at its slowest rate since 2021, primarily due to an El Niño-induced drought that harmed crops and raised prices for corn, rice, and meat.

Consumer prices increased to 15.6%, slightly up from 15.5% in August, as reported by Statistician-General Goodson Sinyenga during a press conference in Lusaka on Thursday. 

This marks the highest inflation rate since December 2021, Bloomberg reports.

Additionally, the economy expanded by 1.7% in the second quarter, down from 2.2% in the previous quarter.

In addition to reducing agricultural output, the worst drought in over a century has limited hydropower generation, leading to instances where households and businesses experience more than 24 hours of continuous power outages.

This situation has compelled the government to cut its economic growth forecast for the year to 2.3%, with the possibility of a further downward revision expected on Friday when Finance Minister Situmbeko Musokotwane presents his annual budget.

Indeed, the worst drought in over a century is pushing Zambia to its limits, necessitating that the finance minister craft an annual budget capable of revitalising an economy still recovering from a difficult debt restructuring.

Situmbeko Musokotwane’s 2025 spending plan, set to be unveiled on Friday, will be one of the “greatest challenges” he faces in his term, according to financial analyst Trevor Hambayi.

Furthermore, the worsening economic outlook and the rising imports of electricity and food have contributed to the depreciation of the Kwacha, further exacerbating price pressures. 

According to the statistics agency, food prices increased by 17.9%, up from 17.6% in August, while the growth rate of non-food prices slowed slightly to 12.4%, down from 12.5% the previous month.