Zambia's economy is 56.4 percent free, according to a 2008 assessment by the Heritage Foundation, which makes it the world's 99th freest economy. Its overall score is 0.8 percentage point lower than last year, mainly reflecting a much-worsened score in labor freedom. Zambia is ranked 15th out of 40 countries in the sub-Saharan Africa region, and its overall score is slightly higher than the regional average.

Zambia scores better than the world average only in terms of government expenditures, which are low in formal terms. This is likely a sign of government weakness, not efficiency. Personal and corporate tax rates are moderately high, but overall tax revenue is relatively low as a percentage of GDP. Total government expenditures equal about one-fourth of national GDP.

All of Zambia's other scores are equal to or below the world average. The judicial process is slow, and many courts cannot arbitrate commercial suits effectively. Corruption is widespread. The regulatory environment hinders business activity, and labor regulations are especially difficult. The government has streamlined foreign investment procedures, but capital is still subject to extensive restrictions.

Background:
The former British protectorate of Northern Rhodesia became the independent Republic of Zambia in 1964. Popular demand for multi-party democracy led President Kenneth Kaunda, who had ruled since independence, to remove restrictions on political p... Read more »