CSPR Warns on Supplementary Budget

Civil society raises concerns over transparency, debt risks and unclear expenditure allocations

Lusaka, Zambia24   --- (8-05-2026)-- Civil Society for Poverty Reduction (CSPR) is urging government to balance emergency spending needs with transparency, accountability, and responsible debt management following the 2026 supplementary budget, warning that gaps in clarity and rising borrowing levels could undermine fiscal discipline.

CSPR Executive Director Isabel Mukelabai told Zambia24 that while the organisation welcomed government’s transparency in presenting the supplementary budget and the decision to finance part of it through reprioritisation of existing expenditure, there remained serious concerns over debt sustainability, accountability, and unclear expenditure lines.

She commended government for the approach taken in reallocating funds, noting that about K10 billion, representing 38 percent of the supplementary budget, had been drawn from existing expenditure lines.

However, Mukelabai raised concern that although K19.2 billion—representing 73 percent of the budget—had been clearly allocated to specific sectors, there was still no clear explanation for the remaining K7.1 billion, accounting for 26.6 percent of the supplementary budget.

“This means that there is a lack of clarity on the expenditure for the remaining K7.1 billion. It is very important for the public and stakeholders to be made aware of where this significant portion of public funds is actually being placed,” she said.

She warned that the lack of detail risked fueling speculation and undermining public confidence, especially in an election year.

Mukelabai also expressed concern over Zambia’s rising debt exposure, noting that the country remains classified at high risk of debt distress.

She said the supplementary budget proposes increasing domestic borrowing by about K7.5 billion, pushing total domestic borrowing from K21.6 billion to K29.1 billion, which could jeopardize fiscal targets.

“In our perspective, this places the macroeconomic target of 2.3 percent of GDP for domestic borrowing in 2026 at risk,” she said.

She further raised concerns about a proposed non-concessional external loan for the Lobito Corridor project, warning that it could increase long-term repayment pressures.

“These factors, combined with weakening demand in the domestic bond market, suggest that debt sustainability remains fragile and dependent on continued fiscal discipline,” Mukelabai said.

CSPR also questioned the lack of detail on the K10 billion reprioritisation exercise, warning that critical sectors such as environmental protection and oversight institutions like the Office of the Auditor General could be affected.

The organisation welcomed the K95.7 million increase in the social cash transfer programme but stressed that administrative weaknesses continued to undermine its effectiveness.

Mukelabai cited findings from the Auditor General’s 2024 report, which highlighted irregularities including poor record-keeping, beneficiary manipulation, and weak accountability systems.

She called for stronger administrative, monitoring, and accountability frameworks to ensure effective delivery of social protection programmes.

CSPR further urged government to improve budget transparency, enhance public participation, and publish a detailed breakdown of both the unexplained K7.1 billion and the K10 billion reprioritisation.

The organisation concluded that while the supplementary budget responds to urgent fiscal pressures such as wage obligations and food security, it also exposes weaknesses in fiscal management, transparency, and debt sustainability.