THE FESTIVE SEASON

By Dr Lubinda Haabazoka

THE festive season is more than a cultural tradition, it is a period that carries significant economic implications for Zambian households and the wider economy.
At family level, spending rises sharply as people prepare for celebrations, travel and social obligations. While this provides a welcome boost to sectors such as retail, tourism, hospitality and transport, it also places substantial pressure on household budgets.
As the nation positions itself for a stronger 2026, understanding the economics behind this period is essential for both families and policymakers.
Household-level economic activity during the festive season
In December, the financial behaviour of households changes noticeably. Consumption increases across a range of categories:

ï Food and groceries, with families buying more meat, beverages, baked goods, and fresh produce to accommodate larger gatherings.

ï Travel, as many urban residents return to rural homes or visit tourist destinations, resulting in higher fuel, bus fare, and accommodation costs.

ï Gifts and social obligations, including presents, church activities, weddings, funerals and contributions to extended family.

ï Clothing purchases, as new outfits for Christmas and New Year remain a strong cultural expectation.

ï Entertainment, with increased spending on leisure outings, concerts and family events.

These expenditures stimulate economic activity, support jobs, and increase revenue for businesses in a wide range of sectors.
Inflation, economic performance and the impact on family budgets
Zambia ends 2025 with notable improvements in key economic indicators. Inflation, which had previously exceeded 20 percent, has now eased to approximately 12 to 13 percent, offering some relief to households.
Foreign exchange reserves have risen to a record US$5.2 billion, improving the country’s import cover and contributing to the stabilisation of the Kwacha.
Other encouraging developments include:

ï An estimated GDP growth rate of four percent for 2025, supported by mining, agriculture, tourism, and energy.

ï Improved investor confidence following Zambiaís credit rating upgrade.

ï Increased macroeconomic stability in exchange rates and monetary policy.

Despite this progress, many families continue to feel the effects of elevated food and fuel prices. Household buying power has improved marginally but remains constrained. This reality, coupled with festive season spending demands, underscores the need for careful financial planning and restraint.
The importance of budgeting during the festive season
Effective budgeting is essential to ensure that the joy of December does not translate into financial hardship in January. A clear financial plan enables households to:

ï Prioritise necessary expenses,

ï Avoid impulsive purchases driven by social pressure,

ï Reduce or eliminate the need for borrowing,

ï Reserve funds for January obligations such as school fees, rent and utility bills,

ï Maintain financial stability throughout the new year.

Budgeting is not about restricting celebration. It is a practical tool for safeguarding a family’s financial wellbeing.
Sources of funds for festive activities
Households typically finance festive spending through a combination of:
ï December salaries,

ï Bonuses and thirteenth cheques,

ï Savings accumulated throughout the year,

ï Village banking payouts,

ï Seasonal income from small businesses, farming, or informal trading,

ï Financial support from extended family,

ï Credit facilities from microfinance institutions or mobile money platforms, used with caution.

Borrowing for consumption should be avoided where possible because high-interest loans can create financial strain well into the new year.
How much the world spends during the festive season
Festive season spending is a global economic phenomenon. Around the world, consumer expenditure surges in December more than in any other month. The scale of spending highlights the economic importance of the holiday period.
Globally, estimates show the following patterns:

ï United States consumer spending during the festive season exceeds US$930 billion, driven by gifts, travel, entertainment and food.

ï United Kingdom households collectively spend over £80 billion, with a large share directed toward Christmas shopping, food and travel.

ï European Union countries together spend well over €300 billion, reflecting strong cultural traditions of festive markets, travel and winter holidays.

ï South Africa experiences an estimated R250 billion in festive related spending, with retail, hospitality and travel seeing the highest gains.

ï Asia, particularly countries like Japan, South Korea, India, and China, records hundreds of billions of dollars in spending driven by festivals, tourism and retail promotions.

These figures illustrate two key insights:

1. Festive spending is one of the largest economic events of the year across countries, and

2. Households everywhere face pressure to balance celebration with financial prudence.
Zambia, with rising disposable incomes in urban areas and growing domestic tourism, is part of this global trend.
Opportunities for businesses and SMEs during the festive season
While December presents financial challenges for households, it also offers significant opportunities for businesses and SMEs across the country.

Key opportunities include:

1. Increased consumer demand
Higher spending on food, gifts, clothing and entertainment creates a favourable environment for retailers, wholesalers and service providers.

2. Growth in hospitality and tourism
Hotels, lodges, restaurants, bars, and travel companies experience peak demand. SMEs offering local tours, transport services, crafts and catering can benefit substantially.

3. Seasonal product sales
Small businesses can focus on festive essentials such as chickens, fresh produce, beverages, Christmas decorations, and clothing.

4. ICT and digital services expansion
E commerce, mobile payments, delivery services, and online advertising see increased activity as consumers shop and transact more digitally.

5. Creative and cultural industries
Musicians, event organisers, photographers, tailors, decorators, and entertainers experience higher demand as social events increase.

6. Informal sector vibrancy
Street vendors, markets, and roadside traders benefit from increased foot traffic as people shop for last minute items.

7. Opportunities for business promotion

Businesses can use the festive period for brand awareness campaigns, promotions and customer loyalty programmes, positioning themselves for stronger sales in early 2026.
The festive season therefore serves both as an economic stimulant and a strategic growth window for the country’s entrepreneurial ecosystem.
Promoting local tourism: Festive season travel destinations within Zambia
The festive season presents an opportunity for families to explore the country’s rich tourism landscape. Choosing domestic tourism keeps financial resources circulating within the national economy and supports thousands of jobs in hospitality, transport and local commerce.
Some notable destinations include:

1. Livingstone
Home to the Victoria Falls, river cruises, wildlife activities, cultural tours and adventure sports.

2. Lower Zambezi National Park
A premium safari destination offering canoeing, fishing, luxury lodges, and exceptional wildlife viewing.

3. South Luangwa National Park
One of Africa’s finest wildlife sanctuaries, renowned for walking safaris and biodiversity.

4. Siavonga and Lake Kariba
A popular choice for family getaways, boating, and scenic relaxation.

5. Northern Waterfalls Circuit
Breathtaking sites such as Chishimba Falls, Lumangwe Falls, and Kalambo Falls, ideal for road trips and nature tourism.

6. Lake Tanganyika and Nsumbu
A unique setting with pristine waters, fishing activities, and natural beauty.

7. Urban tourism in Lusaka and the Copperbelt
Cultural centres, museums, hiking trails, restaurants, shopping and entertainment.

Investing in local tourism helps diversify the economy and enhances national pride.
Financial discipline as we enter 2026
Zambia enters 2026 with improved macroeconomic prospects. To fully benefit from these gains, households must adopt strong financial habits. As the festive season concludes, families are encouraged to:

ï Limit unnecessary borrowing,
ï Resume regular savings as early as January,

ï Prioritise school fees and essential expenses,

ï Set realistic financial goals for 2026,

ï Manage spending based on income rather than social expectations,

ï Teach children and dependents prudent financial behaviour.

Financial discipline strengthens households and contributes to national economic resilience.
Conclusion
The festive season is a time of joy, unity and reflection. It is also a period marked by intense economic activity at family level. With inflation easing, foreign exchange reserves at record highs, and GDP growth improving, the country’s economic outlook for 2026 is promising. However, families must play their part by budgeting wisely, supporting local tourism and maintaining financial discipline.
True celebration is not measured by excessive spending, but by the ability to enjoy the season responsibly while laying a firm foundation for a stable and prosperous new year.