Pouring Prosperity: How Zambian Breweries Tapped into Economic Growth

As with most countries, no trip to Zambia is complete without sampling the local tipple. In most cases that means a pint of either Mosi- the country’s most popular lager – or Eagle, a casava-based brew that was launched in 2017.

 Both are the products of Zambian Breweries: a local institution with roots that stretch back to before the country’s independence, and which now boasts the support of the world’s largest brewing company.

Humble Beer-ginnings

 Northern Breweries was founded in 1963, the year before the then-colony of Northern Rhodesia gained independence. Nationalised by Kenneth Kaunda’s government in 1968, it was separated into two entities, Lusaka-based Zambian Breweries and Ndola-based Northern Breweries. Ending in 1994, it was during this period of state control that household names such as Mosi Lager first appeared on the taps in bars, restaurants and hotels across Zambia.

Privatisation came in the 1990s as Zambia liberalised both politically and economically. During this time, both Northern Breweries and Zambian Breweries came under the ownership of SABMiller, who reunited them under the Zambian Breweries (ZB) label.

The iconic Mosi Lager was first launched following privatisation in the 1990s.

 The association with SABMiller brought both economic success and cultural visibly as Zambian Breweries solidified its near-monopoly on the country’s brewing industry, and Mosi Lager became a household name. However, its prospects for profound growth really intensified in 2016, when SABMiller was acquired by AB InBev, the world’s largest brewing conglomerate and makers of Budweiser, Corona and Stella Artois.  

The acquisition brought with it scope for increased integration with AB Inbev’s worldwide operations, access to expertise and human capital, and of course to investment hitherto unobtainable. In 2022, the parent company allotted $80 million to expand ZB’s plant in Lusaka.   

The investment’s primary goal was to address beer shortages and meet the growing domestic demand by increasing the brewery's annual production capacity by one-third. This expansion included upgrades to brewing, fermentation, and packaging facilities, as well as the installation of high-tech equipment to enhance operational sustainability. This expansion helped create 5,000 new jobs in Lusaka.

Betting big on Zambia

Given that AB InBev’s operations are truly global in scope, it is telling that the company’s decision-makers identified Lusaka as a worthwhile destination for such a sizeable investment. It is reflective not just the brewing industry’s potential in Africa, but of Zambia’s macroeconomic climate more generally.

After years of economic chaos, President Hakainde Hichilema’s government, is making great strides to stabilise and grow the Zambian economy, and welcome foreign investment. In 2024, Zambia successfully completed its G20-devised debt restructuring programme, becoming the first debtor nation to do so under the new ‘Common Framework’ architecture. This provides vital context explaining why investment in Zambian businesses is ticking up across a range of sectors. 

AB InBev invested $80 million into Zambian Breweries to double the capacity of its Lusaka plant.

Zambian Breweries went on to repay AB InBev’s faith almost immediately; already the best performing stock on the Lusaka Securities Exchange, at the end of that year ZB recorded a 55% increase in operating profit – a total of $10.8 million

Not Small Beer

Beyond returning a tidy profit for both local and international shareholders, Zambian Breweries’ success points to long-term growth and prosperity within Zambia’s economy.  

Firstly, beer is a ‘normal good’; demand grows as the economy does – simply put, people with money in their pockets reliably frequent bars and restaurants. If Zambia continues on its present trajectory of growth (6.2% GDP growth projected for 2025), you can expect more pints of Mosi to be sold.  

Secondly, these sales bode well for government revenue. Zambia struggles with enforcing income taxation as the country’s informal sector is so large and pervasive. Not only does this necessitate a greater emphasis on sales taxes, but there is already a widely accepted moral case for taxing alcohol sales. Success for Zambian Breweries is great news for government finances; in 2022 it paid almost $50 million in excise revenue, up 15% from 2021.

Thirdly, Zambia’s demographics are favourable. Beer is mostly drunk by young adults and the middle-aged. While most the world’s other markets are ageing, Zambia, like the rest of Africa, is young. The country’s median age is just 18, with its prime beer-drinking years still ahead.  

The reasons don’t stop there. In the Global North during the 18th and 19th centuries, the brewing industry emerged as a key lobby in favour of implementing water sanitation standards. They did so for selfish reasons, as water is the industry’s biggest input and a reliable supply of clean water is necessary to ensure profits, but the wider social benefit of this is clear. Growth in the brewing industry therefore provides added impetus and funding for improved water sanitation in Zambia.  

ZB’s expansion brought an additional 5,000 jobs to Lusaka.

This social benefit extends to other industries. The growth of Zambian Breweries provides a domestic market for Zambian agricultural produce, and also an incentive to diversify its crops and not rely so heavily on maize. Zambian Breweries has actively invested in both barley and cassava farming and launched an agricultural buying programme that prioritises small-scale farmers. Thus far, an estimated 20,000 farmers have directly benefitted from the programme.

This is all well and good, but perhaps the single most important reason why Zambian Breweries ought to be a prized national asset and will help propel economic growth is the brewing industry’s unique integration into global supply chains.

Ale Around The World

We live in an increasingly globalised world – something Zambia is intimately familiar with due to its status as a world leader in copper exportation. This has however given rise to the concern that African countries may become dependent on cheap imports from Asia rather than developing their own industrial bases.

These concerns are well founded, yet brewing provides a unique exception. Despite increased global connectivity, countries worldwide have continued to rely on the domestic market for their beer. Imported beers tend to exclusively serve an exotic, high-end market, whilst the majority enjoy locally produced brews. Anecdotally, China is a massive exporter, yet only 0.15% of Tsingtao’s output (the country’s biggest beer) gets sent overseas.

This provides an opportunity for investment in an industry that is less susceptible to the effects of global trade, for which the prospects of long-term growth are strong, and with both a financial benefit for the government as well as a broader social benefit.

Zambian Breweries is a company with great heritage and recognition. Not only that, it also has the potential to propel a broader economic success story across Zambia that is already well underway. Good governance, promising macroeconomic fundamentals, and the brewing industry’s unique assets make it likely that AB Inbev’s massive investment in 2022 will come to be seen as a masterstroke.