Zambia and Angola announce rate cuts, boosting the construction industry

GlobalData

Wed, May 20, 2026 at 11:33 AM EDT 5 min read

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.

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.