By Angela Moonga
Finance minister Dr Situmbeko Musokotwane says it’s clear from President Hakainde Hichilema’s speech that Zambia is transitioning from the hard-earned macroeconomic stabilization phase into a growth acceleration era anchored on investment expansion, more jobs for citizens, and broad-based prosperity.
In a statement yesterday, Dr Musokotwane stated that a macroeconomic and fiscal standpoint, the presidential speech served as a strategic confirmation that Zambia’s economic reform trajectory remains consistent with the vision of the UPND administration, the 2026 National Budget, and the overall multi-sectoral development framework.
”Let me now share a structured interpretation of the Presidential message, integrating budget and economic affairs commitments across the stabilization-to-growth continuum. Policy Consistency and Reform Credibility. The President’s message implicitly reinforces one of the strongest investor signals currently available to markets — policy consistency,” he stated. “The 2026 Budget confirms that reforms initiated since 2021 remain intact and aligned with the Eighth National Development Plan while preparing the foundation for the Ninth National Development Plan.”
He stated that macroeconomic projections showed GDP growth strengthening from 5.2 percent in 2022 toward 6.4 percent in 2026, while the fiscal deficit is projected to decline from 8.1 percent to approximately 2.1 percent of GDP over the same period.
”International reserves are also projected to strengthen toward about five months of import cover. This consistency is supported by structural reforms in mining taxation stability, dispute resolution mechanisms, energy sector liberalization, and fiscal legislation, including the Tax Administration Bill and State-Owned Enterprises policy reforms. From a sovereign risk perspective, continuity reduces uncertainty premiums, supports investor confidence, mitigates borrowing costs, and facilitates long-term capital inflows,” Musokotwane stated. “President HAKAINDE HICHILEMA’s reference to the strengthening Kwacha, declining inflation, and improving fundamentals is strongly supported by Budget metrics. Inflation has declined significantly and is trending toward the 6–8 percent target band after peaking above 21 percent in 2021, while gross international reserves have increased to approximately US$5.5 billion, representing a substantial improvement in external buffers.”
He stated that fiscal consolidation had reduced the deficit from around 9 percent of GDP in 2021 to 3.5 percent in 2024, with a target of about 2.1 percent in 2026.
”The 2026 Budget totals K253.1 billion, equivalent to 27.4 percent of GDP, with domestic revenue contributing K206.5 billion and revenue projected at approximately 22.3 percent of GDP. Debt restructuring progress — with approximately 94 percent of external debt under agreement — combined with strengthened parliamentary oversight and implementation of the Parliamentary-approved Annual Borrowing Plan further reinforces debt sustainability credibility. This macroeconomic stabilization provides the platform for the growth phase referenced by the President,” Musokotwane stated. “Fiscal discipline remains central to both the Presidential narrative and the Budget framework. The fiscal deficit is projected to decline to 2.1 percent of GDP in 2026, supported by new revenue measures estimated at K3.1 billion and arrears dismantling allocations of approximately K4.7 billion. Net domestic borrowing is expected to remain contained at approximately 2.3 percent of GDP.”
He stated that fiscal consolidation was being achieved without undermining social spending — a balance that signals improved expenditure efficiency rather than austerity-driven contraction. This approach strengthens long-term debt sustainability while supporting overall socio-economic stability.
He stated that formalization of artisanal mining through 1,498 licenses since 2023, TEVET training targeting 100,000 youth, and projections of up to 875,000 green jobs illustrate a multi-sector employment strategy, the President’s emphasis that jobs and revenues arise from growth is therefore economically grounded.
”Zambia is now entering a period where the benefits of reform will increasingly become visible across sectors and communities. With disciplined governance, productive investment, and collective national effort, the country is positioned to convert economic recovery into sustained and inclusive prosperity,” stated Dr Musokotwane.
