Govt warns of increased financial pressure
By Ludia Ngwadzai
GOVERNMENT has warned that rising personnel costs, increased Constituency Development Fund (CDF) allocations, maize marketing arrears and the potential effects of El Niño may put financial pressure on the country.
Speaking during the opening of the 2027 national budget hearings yesterday, Secretary to the Treasury Felix Nkukukusa said Zambia had made hard-fought gains in restoring macroeconomic stability and debt sustainability.
But Nkulukusa warned that sustaining those gains would require prudent fiscal management.
“The nation has achieved hard-fought gains in achieving macroeconomic stability, which has set us on a stable development trajectory. However, sustaining these gains will require prudent fiscal management,” Nkulukusa said.
He said the pressures were being compounded by the expansion of constituencies from 156 to 226.
Nkulukusa said the increased constituencies required increased CDF allocations.
He also said the treasury was required to settle maize marketing arrears and address the potential effects of the 2026/2027 El Niño.
“The 2027 budget is projected at K271.9 billion, up by K18.8 billion from K253.1 billion in 2026, representing a 7.4 per cent increase,” Nkulukusa said.
He said the budget was being prepared at a critical point in Zambia’s development trajectory.
Nkulukusa said government was seeking to consolidate macroeconomic stability while accelerating inclusive economic growth under the Grow Zambia Agenda.
“Economic growth is projected at 5.3 per cent in 2026 and is expected to average 6.9 per cent over the 2027-2029 medium term,” he said.
Nkulukusa said the budget would also be implemented alongside preparations for the Ninth National Development Plan [9NDP], which would guide Zambia’s development priorities over the next five years.
He said the 2027 framework provides for increased resources for key programmes, with the discretionary spending envelope rising from K67.8 billion in 2026 to K86.8 billion in 2027.
Nkulukusa said CDF was projected to increase by K2.8 billion to K9 billion while funding for dismantling arrears was expected to rise by K10.3 billion to K15 billion.
“The increase in available resources will be accompanied by higher financing requirements, largely driven by domestic borrowing to clear obligations arising from maize purchases by the Food Reserve Agency.
Domestic financing is projected to rise by 72.3 per cent to K37.3 billion in 2027, while external financing is expected to fall by 40.4 per cent to K7.7 billion,” he said.
Nkulukusa said the treasury projects a K5.3 billion increase in the public service wage bill, taking personal emoluments to K70.3 billion, while transfers were expected to rise by K7.6 billion and social benefits by K3.2 billion.
He warned line ministries, provincial administration and spending agencies against exceeding their expenditure ceilings.
Nkulukusa urged spending offices to prioritise programmes capable of delivering measurable economic and social returns.
“Given the constrained resource envelope, we must adopt a one-government approach, strengthen coordination across institutions and direct available resources towards programmes with the greatest impact on citizens,” he said.
Nkulukusa said institutions should focus on cost-effective planning, efficient use of public resources and value for money.
“Every allocation must be justified by its contribution to national priorities and the Grow Zambia Agenda to ensure that the required benefits are provided to our citizens,” he said.
Nkulukusa said climate change, exchange-rate volatility, delayed investments in mining and energy, geopolitical tensions, delayed policy reforms and fluctuations in copper prices were key risks to the 2027 national budget and the medium-term economic outlook.
