Zambia has set a goal of reducing its budget deficit in 2026 as part of its medium-term economic framework, aiming to strengthen fiscal discipline and investor confidence. The 2026–2028 plan, recently approved by Cabinet, prioritises revenue growth, reduced borrowing, and tighter expenditure controls, as reported by APA News.
Under the framework, domestic revenue is projected to rise above 22 percent of GDP annually, while net domestic borrowing will be capped at around 1.7 percent of GDP. Inflation is expected to remain in single digits by 2028, with foreign reserves maintained at no less than three months of import cover, according to Zambia Monitor.
Finance Minister Situmbeko Musokotwane emphasised that fiscal tightening is necessary after recent droughts and global shocks strained public finances. “Fiscal policy will be contractionary, with the fiscal deficit projected at 0.7 percent of GDP by 2027 from 3.1 percent in 2025,” he said, outlining the government’s deficit-reduction path.
Analysts, however, caution that implementation risks persist. Diggers News noted that election-year spending pressures in 2026, combined with volatility in copper prices and climate-related challenges, could undermine revenue forecasts and test the government’s fiscal resolve.
The plan includes broadening the tax base, tightening oversight of tax exemptions, and improving efficiency in tax administration. If successfully executed, the narrower deficit target is expected to enhance Zambia’s macroeconomic stability and provide a stronger foundation for long-term growth, APA News added.
