Zambia’s economic freedom score is 47.8 in 2023, making it the 158th freest economy in the world and the 41st in Africa.
The ranking is included in the “Index of Economic Freedom 2023” report by The Heritage Foundation, a comprehensive analysis of the economic freedom and policies of 184 sovereign countries worldwide.
The report assesses factors such as trade, investment, property rights, and government intervention in the economy, evaluating their impact on economic growth and prosperity.
Zambia’s overall score is below the regional and world averages and has decreased by 0.9 points from 2022.
Zambia is ranked 41st out of 47 countries in the Sub-Saharan Africa region, and 158th out of 184 countries.
“The Zambian economy is still characterized by a need for more intensive structural reform. With its inefficiency and lack of transparency, the legal framework discourages long-term economic development,” the report reads.
The overall rule of law is fragile and undermined by political interference, in addition to which rampant corruption corrodes the foundations of economic freedom.
Rule of Law
The overall rule of law is weak in Zambia. The country’s property rights score is below the world average; its judicial effectiveness score is below the world average; and its government integrity score is below the world average.
The top individual and corporate tax rates are, respectively, 37.5% and 30%. The tax burden equals 14.7% of GDP. Three-year government spending and budget balance averages are, respectively, 31.8% and –10.5% of GDP. Public debt equals 119.1% of GDP.
Despite some reforms, the regulatory environment is not conducive to entrepreneurial activity. Businesses can be established with no minimum capital required, but commercial licensing requirements are time-consuming and costly. Labour regulations are outdated and not consistently applied. Monetary stability has been weak.
The trade-weighted average tariff rate is 9.9%, and extensive nontariff barriers distort trade flows. Zambia has no modern investment framework. The financial system is dominated by banking, and financial intermediation and credit to the private sector have gradually expanded.