Social Aid Under Pressure

CSPR warns that rising debt costs, lower revenue and unpredictable Treasury releases are squeezing funding for social programmes

By Francis Maingaila

Lusaka, Zambia24  -- 20-08-2026 -- The Civil Society for Poverty Reduction (CSPR) has warned that Zambia’s social programmes are coming under pressure as Government grapples with lower-than-planned revenue, increased domestic borrowing and high debt-service costs.

CSPR Executive Director Isabel Mukelabai said the country had recorded positive economic developments, including stronger economic growth, falling inflation, a stronger Kwacha and progress in debt restructuring.

However, she said the gains were being recorded against a budget that remained under strain.

Mukelabai said Government collected less revenue than planned during the first half of 2026, with most revenue lines underperforming, particularly Value Added Tax (VAT).

She said Government also introduced a K26.3 billion supplementary budget to meet higher public service wages, fuel-price pressures, maize purchases and outstanding Farmer Input Support Programme obligations.

Mukelabai said Government authorised an additional K7.5 billion in domestic borrowing, raising the year’s authorised net domestic borrowing from K21.6 billion to K29.1 billion.

She said much of the supplementary budget was used to clear arrears and meet wage commitments, leaving less room for new priorities.

Mukelabai warned that this was putting further pressure on social-sector programmes that were already struggling for adequate funding.

She said the pressure was particularly evident in Treasury releases.

Mukelabai said Government released K49.1 billion in June alone, with K34.9 billion, or 71 percent, going towards debt servicing, including the full buyback of Bond B.

She acknowledged that debt repayment was important for fiscal credibility and long-term sustainability.

But Mukelabai said high debt-service costs were crowding out development spending, with social and capital expenditure accounting for only 11.5 percent of the June release.

She said programmes such as the Social Cash Transfer, Food Security Pack and Farmer Input Support Programme had received allocations below, or unevenly against, their budget targets.

Mukelabai also raised concern over unpredictable Treasury releases, saying some months recorded spending far above target while others were far below.

She said the inconsistent funding made it difficult for ministries, service providers and programme managers to plan and deliver services on time.

Despite the concerns, Mukelabai said Zambia’s economic performance had shown encouraging signs.

She said real GDP grew by an estimated 7.7 percent in the first quarter of 2026, while the Kwacha appreciated from K19.26 to K17.82 against the US dollar between January and June.

Mukelabai said these gains must now translate into better public services, stronger social protection and improved living conditions for Zambians.

She called on Government to protect social programmes from funding cuts and delays, improve domestic revenue collection and provide clear explanations for major differences between planned and actual Treasury releases.

Mukelabai also urged Government to exercise caution over additional domestic borrowing, warning that it could increase debt-service costs and reduce credit available to the private sector.

She said Zambia must preserve its recent economic gains while ensuring that fiscal stability does not come at the expense of citizens who depend on government support.

Mukelabai said fiscal stability should ultimately translate into reliable services and protection for citizens.