• Zambia’s official unemployment rate fell to 9.9%, from 12.9% in 2021 and 12.6% in 2022, while the employment-to-population ratio improved to 37.1% in 2025
• The headline rate understates labour market stress because 76.3% of employed persons were informally employed in the 2022 Labour Force Survey, while poverty remains high at around 60%
• Zambia’s planned 2026 GDP rebasing and 2025 Economic Establishment Census could better capture informal activity, but may improve macro ratios without changing household living standards

Harare- The Zambia Statistics Agency has reported a decline in the country's official unemployment rate to 9.9%, down from 12.9% in 2021 and from 12.6% recorded in the 2022 Labour Force Survey.

 This was disclosed by Statistician General Sheilah Mudenda at a town hall meeting on Zambia's first quarter 2026 economic performance, where she also noted that the employment-to-population ratio had improved from 34.3% in 2023 to 37.1% in 2025, and announced plans for a GDP rebasing exercise in 2026 alongside the launch of the 2025 Economic Establishment Census.

The 9.9% figure is produced using the International Labour Organisation's standard definition of unemployment, a person is considered unemployed only if they are of working age, not currently employed, actively seeking work, and available to start work. By this definition, a person selling tomatoes at a roadside market in Lusaka's Chawama compound is employed. A person operating a charcoal depot in Mtendere is employed. A person hawking airtime cards on Cairo Road is employed.

A subsistence farmer in Luapula Province producing just enough maize to feed their household is employed. None of these people are unemployed by the ILO definition, and none of them appear in the 9.9% figure. But the World Bank estimates that 71.7% of Zambia's population lives below USD 3 per day, and 60% lives below the national poverty line.

Zambia's unemployment rate is 9.9%, while its poverty rate is 60%. These two numbers, published by different agencies using different methodologies, are measuring the same country at the same time and arriving at conclusions that are arithmetically incompatible , unless the definition of employment is doing considerably more work than the headline suggests.

The ILO unemployment definition was designed for labour markets in industrialised economies where the distinction between employed and unemployed is meaningful, where employment means a wage or salary, a contract, regular hours, and social protection. In that context, a person who loses their job is unambiguously unemployed: they have no income, no work, and can be counted. The definition breaks down in economies where the majority of work is informal, self-generated, subsistence-based, or undertaken in the household sector, economies, in other words, like Zambia's.

ZAMSTATS's own 2022 Labour Force Survey data, the most authoritative domestic source available, reveals the architecture beneath the headline rate. Of the total employed persons recorded in that survey, 76.3% were informally employed and only 23.7% were formally employed. The total working population in 2022 was 10.3 million, of which 3.7 million were in the labour force. Of those, 473,562 were recorded as employed in any capacity. The unemployment rate at that point was 12.6%.

By 2025, Mudenda's reported rate has fallen to 9.9%, an improvement of 2.7 percentage points. If the informal employment share has remained roughly constant at approximately 76%, then almost all of the additional employment generated between 2022 and 2025 has occurred in the informal sector. A country reducing its official unemployment rate primarily by adding more informal workers to the count is not documenting a labour market recovery in any sense that translates into improved living standards for the newly counted employed.

The employment-to-population ratio of 37.1% in 2025 is a more informative number than the unemployment rate, but it too requires qualification. An employment-to-population ratio of 37.1% means that fewer than four in ten Zambians of all ages are engaged in any form of work as defined by the ILO. Zambia's population in 2024 was approximately 21.3 million. A ratio of 37.1% implies approximately 7.9 million economically active workers. Set against a poverty rate of 60% across 21.3 million people, approximately 12.8 million people living below the national poverty line, the numbers confirm that significant employment, as officially defined, is not preventing poverty. The people counted as employed are, in very large numbers, poor.

The World Bank's Poverty and Inequality Platform records Zambia's poverty rate at USD 3.00 per day at 71.7% of the population as of 2022, and at the national poverty line at 60% of the population. The African Development Bank's economic outlook for Zambia reports rural poverty at 78.8% and urban poverty at 31.9%, a differential that reflects not a rural employment crisis and an urban employment success, but a rural employment crisis and an urban informal employment crisis that the poverty line captures more honestly than the unemployment rate does. Statista's forecast for 2025 puts the share of Zambia's population earning less than USD 2.15 per day at 65.14%, meaning the majority of Zambians in 2025 live on less than the cost of a single cup of coffee in the cities where the unemployment data is being presented.

Youth unemployment provides a sharper diagnostic. The African Development Bank estimates Zambia's youth unemployment rate at 24.7%, more than double the headline rate Mudenda reported. ZAMSTATS's own 2022 data shows youth unemployment in rural areas at 15.8% for females and 16.9% for males, and those figures include only youth who are actively seeking and unavailable for work, excluding the vast majority of rural youth engaged in subsistence agriculture.

The NEET rate, young people Not in Education, Employment, or Training, stood at 50.2% of all youth in the 2022 survey, representing 3.36 million young Zambians who are simultaneously not studying and not working in any ILO-countable way. A country with a 9.9% official unemployment rate and a 50% youth NEET rate is a country whose headline employment statistic is comprehensively disconnected from the labour market experience of its youngest and most economically vulnerable population.

The Informal Economy: Large, Growing, and Undercounted

Zambia's informal economy is estimated at approximately 38% of GDP by World Economics, though the African Development Bank and ILO analyses put informal employment's share of the workforce considerably higher, with ZAMSTATS's own 76.3% informal employment share in 2022 suggesting that the informal economy's contribution to economic activity, if measured by labour hours rather than formal value-added output, would substantially exceed the 38% GDP estimate.

Agriculture, which employed 85% of total workers at the turn of the millennium and continues to employ the majority of rural Zambians in subsistence and smallholder farming, contributes only approximately 3.3% of formal GDP, confirming that the gap between labour force engagement and GDP contribution is enormous, and that most of the people counted as employed in Zambia's agriculture sector are generating economic value that official GDP measurement does not capture.

This has a direct implication for the GDP rebasing exercise Mudenda announced at the same town hall meeting. ZAMSTATS is planning to rebase Zambia's GDP in 2026, noting that the current base year is approximately 15 years old and that the rebasing is necessary to capture sectoral shifts, economic diversification, and structural transformation. The rebasing will also need to grapple with the informal economy's contribution , the street traders, the informal manufacturers, the agricultural smallholders, the service providers operating outside the tax and regulatory net.

When Zimbabwe rebased its GDP in 2025, the revised figure of USD 52.4 billion was substantially larger than the previously estimated economy, primarily because the rebasing methodology better captured informal sector activity. Zambia's rebased GDP is likely to produce a similar upward revision, which will have the secondary effect of improving Zambia's debt-to-GDP ratio and per capita income metrics without any actual improvement in the living conditions of the citizens generating that economic activity.

The ILO has progressively developed supplementary labour market indicators that more honestly capture the employment situation in informal economies. The most useful is the concept of vulnerable employment , workers in own-account employment and contributing family work, who typically lack formal work arrangements, are not covered by social protection, and are characterised by inadequate earnings and difficult working conditions. In Sub-Saharan Africa, vulnerable employment as a share of total employment typically runs above 70%, compared to the 9.9% headline unemployment rate that ZAMSTATS reported.

A second supplementary measure is the Working Poverty Rate, the share of employed people who live below a defined poverty threshold. Zambia's combination of 60% national poverty incidence and 76% informal employment share implies a working poverty rate that substantially exceeds the official unemployment rate. The most economically honest headline Zambia could report about its labour market is not "unemployment has fallen to 9.9%" but rather "more than three-quarters of working Zambians are informally employed, and the majority of those workers live below the national poverty line." That is the labour market situation the data actually describes. The unemployment rate describes something else.

None of this is to say that the improvement from 12.9% to 9.9% is meaningless. More people entering any form of productive activity, even informal self-employment, is preferable to enforced idleness. The employment-to-population ratio improvement from 34.3% to 37.1% is a genuine measure of increased economic engagement. The GDP rebasing and the Economic Establishment Census, if executed credibly, will improve Zambia's planning data and policy formulation capacity. These are real institutional improvements, and Mudenda's agency deserves credit for transparency about the methodology and for announcing the rebasing rather than defending an increasingly stale baseline.

When a government presents a 9.9% unemployment rate without simultaneously noting the 60% poverty rate, the 76% informal employment share, and the 50% youth NEET rate, the headline creates a false impression of labour market health that can distort policy priorities, investor perceptions, and development assistance allocation. Zambia does not have a nearly-full-employment economy with a 9.9% headline rate. It has an economy where the vast majority of working people earn insufficient incomes to escape poverty, and where the measurement framework classifies most of those people as employed because they are doing something rather than nothing.

The distance between those two descriptions of the same country is the distance between a statistical artefact and a policy reality, and it is that distance, not the headline figure, that deserves the attention of Zambia's planners, its creditors, and its citizens.

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