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Zambia’s economy is at a crossroads due to the devastating effects of drought, Secretary to the Treasury Felix Nkulukusa has warned.
In a White Paper released Sunday on the 2025-2027 Medium Term Budget Plan, Nkulukusa noted that while the economy posted strong growth in 2022 and 2023—averaging 5.3 percent —growth in 2024 had slowed significantly due to the drought’s impact.
He said the government was setting a strategic foundation to strengthen economic resilience and promote higher growth, projecting an annual expansion of over six percent in the medium term.
“Fiscal policy will be contractionary, with the fiscal deficit projected at 0.7 percent of Gross Domestic Product (GDP) by 2027 from 3.1 percent in 2025. Domestic revenues are projected at no less than 21.2 percent of GDP by 2027,” Nkulukusa stated.
He explained that tax policy enhancements and technology-driven tax administration would boost compliance and revenue collection.
Meanwhile, government expenditures are projected to decline from 26.6 percent of GDP in 2025 to 24.8 percent in 2027 through expenditure rationalization and plugging leakages.
“Social sector spending will remain a priority. Government will also utilise Public-Private Partnerships to finance developmental projects, especially in infrastructure,” he added.
As part of its financing strategy, the government plans to secure more concessional loans aligned with the country’s debt restructuring and the 2024–2026 Medium Term Debt Strategy.
Nkulukusa emphasized the need for risk management integration across all public sector levels as climate change effects intensify.
He reaffirmed government’s commitment to ensuring sustainable economic growth while enhancing public service delivery.
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