In mid-May 2026, Zambia and Angola both announced interest rate cuts to support economic growth, improve borrowing conditions, and encourage investment activity. Zambia lowered its benchmark interest rate by 25 basis points to 13.25% in May 2026 after easing inflation, currency stability, and expectations of a stronger maize harvest boosted confidence in the economy. Angola has also shifted toward looser monetary policy to stimulate business activity and support domestic growth, with both countries aiming to strengthen economic momentum and improve financing conditions for industries and infrastructure development.
Zambia has continued easing monetary policy to support growth, with the Bank of Zambia reducing its benchmark interest rate to 13.25% in May 2026 from 13.5%, following an earlier 75-basis-point cut from 14.25% to 13.5% in February 2026. The decision was driven by sharply slowing inflation, a stronger kwacha, and expectations of a bumper maize harvest from the 2024/2025 farming season, which helped lower food prices and improve economic confidence. Annual inflation has slowed for four months in a row and stood at 6.8% in April 2026, down from 7.1% the previous month and within the bank’s 6%-8% target range, with the Bank of Zambia now expecting inflation to move into its 6%–8% target range faster than previously forecast. The easing cycle is expected to reduce borrowing costs for businesses and households, encourage lending, boost investment, and support industrial and infrastructure activity across the country. Policymakers also revealed favourable weather conditions, stronger copper prices, and improving macroeconomic stability as key positive drivers for Zambia’s economy, while lower interest rates are expected to strengthen consumer spending, business expansion, and overall economic recovery.
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Zambia: interest rate and inflation rate trends
Angola’s National Bank (BNA) cut its key interest rate by 50 basis points to 17% during its May 2026 monetary policy meeting, marking another step in its easing cycle as inflation continues to slow across the country, despite the ongoing Iran war and rising global uncertainty. This was followed by an interest rate of 17.50% in April 2026 and March 2026. Angola’s annual inflation rate fell to 11.58% in April from 12.42% in March, the lowest level since June 2023, continuing a disinflation trend that began in mid-2024.
The central bank revealed the decision was aimed at supporting economic activity, improving borrowing conditions, and encouraging investment while maintaining macroeconomic stability. Earlier in January 2026, the BNA had already reduced rates by 100 basis points to 17.5%, following previous cuts from 19.5% in August 2025 and 18.5% in November 2025, reflecting stronger confidence in the economy and easing price pressures. The Monetary Policy Committee has revised its inflation rate projection downward to 11.5% for 2026, while maintaining its GDP growth forecast at 3.5%, supported by exchange-rate stability, improving liquidity conditions, and lower inflation expectations. The continued rate cuts are expected to stimulate business activity, support infrastructure and industrial investment, and improve financing conditions across key sectors of the economy, even as global geopolitical tensions remain elevated.
Angola: interest rate and inflation rate trends
The interest rate cuts, along with decreasing inflation, augur well for the construction industry in both countries in 2026. According to the Zambia Statistics Agency, construction value-add growth accelerated sharply to record 19.6% year-on-year (YoY) increase in Q4 2025, preceded by a YoY growth of 5.7% in Q3 and a decline of 1% in Q2 2025. In annual terms, the value-add increased by 4% in 2025 and 6.6% in 2024. In Angola, according to the Instituto Nacional De Estatísticas (INE), construction value-add, measured in seasonally adjusted terms, increased by 5% YoY in Q4 2025; this was preceded by YoY growth of 1.5% in Q3 and a YoY decline of 2.1% in Q2 2025. Overall, the construction value-add grew by 2.2% in 2025, following an annual growth of 1.8% in 2024.
Zambia and Angola construction value-add overview (2021-2025)
GlobalData forecasts that the construction industry in Zambia is expected to grow by 3.9% in real terms in 2026, before registering an expansion at an average annual rate of 4.5% during 2027–2030, supported by the government’s investment in transport, energy, and manufacturing projects. Zambia’s 2026 economic strategy, as outlined by President Hakainde Hichilema in January 2026, which aims to strengthen economic growth. The government plans to build on macroeconomic stability and fiscal consolidation achieved under the 38-month International Monetary Fund (IMF) Extended Credit Facility, while targeting economic growth above the current 6.4% forecast. The engagement with international investors reflects improving investor confidence and reduced risk premiums. Priority sectors for expansion are mining, energy, and agriculture. In particular, the government’s plan to scale electricity generation capacity to 10,000MW and beyond is expected to drive large-scale energy and transmission projects, supporting demand for engineering and construction services. Overall, strengthened economic stability, rising investment interest, and energy sector expansion are likely to accelerate infrastructure delivery, increase private-sector construction activity, and improve long-term project viability across Zambia’s construction industry.
Similarly, GlobalData expects the Angolan construction industry to expand in real terms by 4.9% in 2026, before registering an annual average growth of 5.7% between 2027 and 2030, supported by rising investments in transport infrastructure and renewable energy. In December 2025, the Angolan National Assembly approved the general state budget for 2026, which includes a total expenditure of Kz33.2trn ($29.5bn); the latest budget projects oil revenues to reach KZ7.5trn ($6.7bn) and non-oil revenues to reach Kz10.7trn ($9.5bn) in 2026. Some of the key allocations under the 2026 budget include KZ2.3trn ($2bn) for education sector, KZ2.1trn ($1.9bn) for the healthcare sector, KZ2.5trn ($2.2bn) for defense, security and public sector, KZ2.4trn ($2.1bn) for housing and community sector, and another KZ599.3bn ($531.4m) for transport infrastructure sector.
