By Jeff Kapembwa
Anxiety has gripped Zambia over the possible content of the national budget for the fiscal year 2026 by finance minister Situmbeko Musokotwane on Friday, dubbed: ‘launch pad for economic recovery spurred by prudent fiscal and monetary management.
Reeling from a nagging El Nino-induced drought that washed away economic gains, dwarfing food production, affecting energy and other infrastructure, leaving over 10 million hungry with an addition 3 million children malnourished, interest groups seek a budget driven by restraint and devoid of induced politically inclined appeasements in the 2026 Presidential and general poll,
Zambia Institute for Policy Analysis and Research (ZIPAR), Centre for Policy and Development and KPMG, among other Non-State-actors-are poking finance minister Musokotwane and want a budget aligned in tandem with IMF’s policies, able to reduce poverty among the 20 million people.
In various voices ahead of the budget presentation to Parliament on Friday, players are asking minister Musokotwane to ensure expenditure restraint and induce fiscal consolidation as agreed with the IMF. And demanding prudent resource management.
ZIPAR-in its pre-budget analysis foresees a forward looking budget incorporating clear safeguards against election-related slippages.
It is urging Government to avoid unplanned expenditures to preserve the gains achieved and ensure debt sustainability, what with the debt restructuring and macroeconomic stability, while creating leeway for growth.
With the country’s fiscal position delicate and vulnerable to shocks, the budget is envisaged to adhere to respect the IMF’s extension of Zambia’s Extended Credit Facility (ECF) beyond October 2025. This has helped to restore some measure of fiscal stability.
“we anticipate that the 2026 National Budget will be framed within the confines of the IMF programme, thereby helping to contain election-year spending pressures and sustain recent gains in debt and macroeconomic management.”, Zali Chikuba, the think-tank’s interim Executive Director told Lusaka-based reporters.
The think tank notes that over the past one year, Zambia had suffered global aid tectonic plate shift, driven by the withdrawal of USAID and other donor funding, threatening its budget credibility and financial sustainability.
The unexpected shock, represents additional public spending which must now be addressed through domestic resource mobilisation (DRM). The resumption of external debt servicing places even more strain on the budget. Now more than ever.
The Government must focus on the potential of domestic resource mobilisation to fund its budget. It cites the MTBP, where domestic revenues are forecasted to reach 22.3% of GDP in 2026, higher than the 21.3% of GDP projected for 2025.
This gives a new dimension and raises expectations for the 2026 National Budget to ramp up DRM to the next level, exceeding 22.0% of GDP. This rise will be maintained through a comprehensive set of fiscal policy and administrative reforms.
Rationalising tax incentives, modernising VAT and excise regimes, formalising the informal sector, reforming property taxes, using digital technologies for enforcement, and establishing a coherent medium-term revenue strategy are paramount.
There are also unavoidable for effective execution, all areas being attended to, cautiously, a call for fiscal discipline.
“the 2026 National Budget must prioritise implementing fiscal consolidation measures that safeguard budget credibility and efficiency.” He says, noting that managing excess expenditure like financing State Enterprises should be reviewed while much of the programs be supported through Public Private Partnerships (PPPs) to defray expenses.
“The budget should be supported by a comprehensive Fiscal Risk Statement that covers State-Owned Enterprises (SOEs) and Public-Private Partnerships (PPPs). “
The Centre for Trade and Policy Development (CTPD), another think tank commends the Government for its resilience amid various headwinds, climate change included with a call for actualisation of the 2026 budget without being tempted into uncalled for expenditure to derail the growth focus. It suggests among other remedies:
The Government should be prudent and should allocate sufficient resources and conclude ongoing geological mapping and survey exercises, critical in informing policy decisions that can accelerate investment in both brownfield expansions and new greenfield projects.
Isaac Mwaipopo, the CTPD executive director, in a statement to Lusaka-based reporters called for expedition of the formalizing artisanal and small-scale mining (ASM) and enhance productivity, improve safety, diversify rural livelihoods, alleviate poverty and ensure their contributions are captured within the formal economy.
There is unwavering need to enforce the national critical minerals strategiy-2024-2028, while leaning on strengthening local content policies to promote Zambian participation in mining supply chains.
It calls for advancing beneficiation and value addition of copper and critical minerals to capture greater domestic economic benefits. There is a call to scale up exploration of strategic minerals beyond copper, supported by geoscientific data and surveys.
The success of the 2026 budget will be aided by enhancing environmental, social, and governance (ESG) standards to ensure sustainability and community development. There is need to provide clarity and stability in mining tax and regulatory frameworks to strengthen investor confidence and unlock new capital flows, as way of realising the country’s vision.
“If these priorities are integrated into the 2026 budget, Zambia can transform its mining sector into a genuine driver of sustainable growth, helping the country achieve its copper production ambitions while also ensuring that the country is benefitting meaningfully.”
KPMG, in collaboration with the UN systems in Zambia have weighed in on the need to undertake prudent review of the various policies that are inimical to the economic growth, having scaled down potential in various sectors, while private sector participation has been gagged because of high cost of finance to re-invest in various projects.
Jason Kalizimani, the KPMG Zambia country manager, in a launch of the pre-budget survey findings from a cross section of respondents urged Minister Musokotwane to prioritise policies that balance fiscal consolidation with inclusive development.
This, interest groups say, can be achieved by strengthening local businesses, investing in health and education, promoting climate resilience, and implementing targeted measures to reduce inequality and empower women and persons with disabilities.
There is a clarion call for Minister Musokotwane to consider announcing policies that will control and prevail over the country’s macroeconomic status.
Although the economic activity has remained resilient following the post-pandemic surge in 2022 and severe drought of 2024, stakeholders are concerned with inflation continuing to surge upwards since 2024 spurred by drought, coupled with rising exchange rate, affecting food supply.
The players further note that although fiscal deficit has largely been contained with government surpassing its targets in 2023 through to the second quarter of 2025, the downward trend may hold over the medium-term as government’s fiscal consolidation gains are safeguarded through expenditure rationalization and enhanced domestic revenue mobilization.
Though there are concerns for possible slippages over the election cycles, the Government should restrain from appeasement decisions noting that under IMF program there has been discipline and should not be derailed.