FATF Status

Zambia is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The latest follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Zambia was undertaken in 2024 . According to that Evaluation, Zambia was deemed Compliant for 12 and Largely Compliant for 18 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 0 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.

Zambia's anti-corruption framework, governed by the Anti-Corruption Act of 2012 and the National Anti-Corruption Policy of 2009, faces significant challenges in implementation due to limited capacity and corruption within government institutions. Despite the establishment of a fast-track financial crimes court and efforts to prosecute high-ranking officials, corruption remains pervasive, particularly in public procurement and the police service. The government's initiatives, including the Public Disclosure Act and the Integrity Committees Initiative, aim to combat corruption, but enforcement remains weak, hindering foreign investment and the overall business environment.

Zambia's economy, with a GDP of $22.15 billion in 2021, has faced significant challenges, including a contraction of 3.0 percent in 2020 and slow recovery with only 1.0 percent growth in 2021. The country is heavily reliant on its mining sector, which accounts for 77% of exports and 39% of government revenue, but ongoing debt issues and economic reforms are critical for future growth, as highlighted by the IMF's forecast of 4.1 percent GDP growth in 2023 contingent on debt relief.

Zambia's investment climate has been hindered by a history of economic challenges, including a significant debt overhang and corruption, which have affected its reputation as an investment destination. However, under President Hakainde Hichilema's administration, there have been efforts to improve the investment environment through macroeconomic reforms, including a new minerals tax policy aimed at attracting investment in the mining sector. Despite these efforts, ongoing issues such as bureaucratic inefficiencies, high costs of doing business, and a lack of skilled labor continue to pose challenges for potential investors.