GROWTH MUST IMPROVE LIVES
CSPR warns that the 2027 Budget risks falling short of the needs of ordinary Zambians, citing a modest growth target, rising tax pressure, debt repayments and inadequate funding for essential services.*
By Francis Maingaila ♥️
Lusaka, Zambia24 — November 13, 2026 — The success of the 2027 National Budget should not be measured by how much revenue Government collects, how impressive economic growth figures look or how ambitious its development targets are, but by whether it makes a meaningful difference in the lives of ordinary Zambians by putting food on the table, creating decent jobs, improving access to healthcare and education and easing the cost of living for struggling households.
Ms Mukelabai said the scale of poverty in Zambia made it necessary for Government to look beyond economic growth projections and focus on whether development policies were improving living conditions, particularly for households already struggling to meet their basic needs.
She noted that more than 60 per cent of the population lived in poverty, while about 48 per cent faced extreme poverty. Children remained among the most affected, with approximately 70 per cent experiencing poverty in different forms.
Ms Mukelabai warned that without deliberate interventions, about 68 per cent of children could still be living in poverty by 2030, raising concerns about the country's ability to break the cycle of deprivation across generations.
She said climate change had added another layer of difficulty for poor households, particularly in rural communities that depended on agriculture for food and income. Poor rainfall, droughts and unpredictable weather patterns continued to undermine harvests, weaken household incomes and threaten food security.
Ms Mukelabai argued that the budget needed to give greater attention to environmental protection, water and sanitation, noting that allocations to these areas remained below one per cent of the national budget despite their importance to livelihoods, public health and climate resilience.
On public debt, Ms Mukelabai acknowledged progress in external debt restructuring, which had reached about 96 per cent, but said the cost of servicing debt continued to place considerable pressure on public finances.
She noted that debt servicing was projected at K67.59 billion, representing 23.7 per cent of the 2027 Budget, leaving less room for Government to adequately finance health, education and social protection programmes.
Ms Mukelabai said the pressure on public resources raised questions about how effectively the budget would respond to the needs of citizens, especially when households continued to face high living costs and limited access to essential services.
She said Government expected to raise K233.6 billion in domestic revenue, representing 82.1 per cent of the proposed budget, but cautioned that the approach to revenue collection needed to consider the effect of taxation on ordinary people and businesses.
Ms Mukelabai expressed concern over proposed tax measures, including the increase in Value Added Tax from 16 per cent to 16.5 per cent, mobile money levies and the proposed personal income tax rate of 39.5 per cent for higher-income earners, arguing that such measures risked increasing the cost of living and placing additional pressure on households.
She also pointed to the proposed withholding tax on mining dividends and the K60.3 billion in VAT refunds, saying the country's revenue system needed to be examined alongside the challenges businesses faced in recovering money owed to them by Government.
Ms Mukelabai urged Government to strengthen the recovery of illicit financial flows, address tax avoidance and improve revenue administration instead of depending excessively on taxes that could make essential goods and services more expensive.
She said improved revenue collection should also be accompanied by greater transparency and accountability in the management of public resources so that citizens could see the benefits of the taxes they paid.
On education, Ms Mukelabai said the proposed K1 billion allocation for the school feeding programme needed to be assessed against the number of learners requiring support.
She noted that the programme was expected to reach about 5.6 million learners against a target of 6.6 million, raising concerns about children who might remain outside the programme despite the importance of adequate nutrition to learning.
Ms Mukelabai said hunger affected children's concentration, attendance and ability to participate effectively in school, making school feeding an important investment in education and the country's future workforce.
She also raised concerns over health financing, noting that the proposed K30.25 billion allocation represented about 10.6 per cent of the national budget, below the 15 per cent target under the Abuja Declaration.
While acknowledging the planned expansion of National Health Insurance Management Authority (NHIMA) coverage, Ms Mukelabai said the effectiveness of health spending should ultimately be measured by whether people could access medicines, health workers and quality services when they needed them.
She said improved budget allocations needed to translate into better medicine availability, adequate staffing and reduced barriers to healthcare, particularly for poor and vulnerable households.
Ms Mukelabai further called for greater transparency in public procurement, arguing that Government needed to ensure that public resources delivered value for money and that projects were completed to the required standards.
She said the 2027 Budget also needed to be aligned with the Ninth National Development Plan and the Grow Zambia 2027–2031 agenda, with greater attention to irrigation, aquaculture, agricultural processing, value addition and the development of local industries.
Ms Mukelabai said investment in productive sectors needed to create opportunities for small-scale farmers, businesses and communities, while public-private partnerships could help mobilise resources for development provided that the arrangements were transparent and protected public interests.
She said the central measure of the budget's success should remain its contribution to reducing poverty, expanding economic opportunities and improving the everyday lives of Zambians.
Mr Zulu said Zambia's ambition to double the size of its economy required sustained growth beyond the levels projected in the budget, noting that the economy was expected to record average growth of about 7.4 per cent in 2026.
He said Vision 2030 required annual economic growth of approximately 10 per cent, while the Medium-Term Budget Plan projected growth of around six per cent, creating a need for Government to demonstrate how the country would progressively move towards the higher growth levels required to achieve its long-term ambitions.
Mr Zulu said the 2027 Budget needed to provide a clearer pathway for stronger growth in 2028 and 2029, rather than treating the projected rate as sufficient on its own.
On inflation, Mr Zulu said the country had maintained inflation within the target band between January and October 2026, but warned that the end of the temporary suspension of VAT on fuel would expose consumers to the full tax cost.
He said electricity tariffs were also moving towards cost-reflective pricing, adding to the possibility of higher costs for households and businesses.
Mr Zulu said Government needed to balance its inflation target of between six and eight per cent with the impact of tax changes and higher energy costs on consumers and productive sectors.
He also cautioned that the threat of El Niño during the 2026/2027 agricultural season required early preparation, particularly given the damage caused by drought during the 2024/2025 season.
Mr Zulu said investment in irrigation infrastructure and boreholes was important to reduce dependence on rainfall and protect agricultural production from increasingly unpredictable weather patterns.
On fiscal consolidation, Mr Zulu said the proposed reduction in the fiscal deficit from 5.9 per cent in 2026 to 2.9 per cent in 2027 demonstrated Government's intention to strengthen public finances.
However, he noted that the original 2026 deficit target had been between 2.1 and 2.2 per cent, raising questions about the risks of supplementary expenditure and the possibility of further pressure from drought-related interventions.
Mr Zulu said fiscal discipline was important, but cautioned that efforts to reduce the deficit should not come at the expense of essential social services and development programmes that directly benefited citizens.
He said the proposed tax measures were expected to generate about K10 billion, but warned that the country needed to examine the distributional effects of the measures, particularly where consumption taxes affected low-income households more heavily.
Mr Zulu said VAT was generally regressive because lower-income households spent a larger proportion of their earnings on consumption, while changes to mobile money charges could also affect people who relied on digital transactions for everyday financial activities.
He said Government needed to broaden the tax base by bringing more economic activities into the tax system, including the informal sector and digital services, rather than placing an excessive burden on existing compliant taxpayers.
Mr Zulu cited digital services such as Netflix as examples of areas where the tax base could be widened as the economy changed.
He also expressed concern over net domestic borrowing exceeding three per cent, warning that Government borrowing from the domestic market could crowd out private sector investment by competing with businesses for available credit.
Mr Zulu said small and medium-sized enterprises were particularly vulnerable to the effects of expensive or limited financing because they depended on affordable credit to expand operations, invest in equipment and create jobs.
He noted that general public services accounted for about 31 per cent of the budget, with debt servicing and the public sector wage bill absorbing substantial resources that could otherwise support development spending.
On Government arrears, Mr Zulu said the proposed allocation of about K4 billion towards dismantling outstanding obligations needed to be assessed against the scale of the problem facing businesses.
He said VAT refund claims stood at approximately K51 billion, while the broader exposure was estimated at about K60 billion, warning that delays in paying refunds tied up business capital and affected the ability of companies to maintain operations and meet their obligations.
Mr Zulu said timely payment of arrears and VAT refunds was important because businesses needed predictable cash flows to sustain production, protect jobs and invest in expansion.
He also raised concerns over the proposed transition of the Farmer Input Support Programme (FISP) into an agricultural loan scheme, saying the change needed to take account of the circumstances of small-scale farmers who might not have collateral or the capacity to access commercial financing.
Mr Zulu said the transition should not exclude vulnerable farmers from agricultural support and urged Government to consult farmers and other stakeholders while addressing challenges within the existing financing arrangements.
He said the proposed agricultural financing model needed to be practical and responsive to the realities of small-scale farmers, particularly those whose production remained vulnerable to weather conditions and limited access to markets.
On the Grow Zambia 2027–2031 agenda, Mr Zulu said the targets of producing three million tonnes of copper, 10 million tonnes of maize and generating 10,000 megawatts of electricity were ambitious and required clear implementation plans.
He said increasing copper production from the projected 930,000 tonnes in 2026 to three million tonnes would require annual growth of about 26.4 per cent, making it important for Government to identify measurable milestones and the investments needed to achieve the target.
Mr Zulu said the agricultural targets for maize, soya, sugar and wheat also needed to be supported by investment in production, irrigation, storage, processing and access to markets.
He said the proposed addition of about 1,400 megawatts of electricity was important for industrial growth, but Government needed to distinguish between installed generation capacity and the electricity actually available to consumers and businesses.
Mr Zulu said the country's tourism ambition of attracting five million visitors also required investment in infrastructure, tourism attractions and supporting services to make Zambia more competitive as a destination.
He said the creation of jobs in mining and other productive sectors was important, but the focus needed to be on decent and sustainable employment rather than simply increasing the number of people employed.
Mr Zulu also said the purchasing power of beneficiaries of social cash transfers had been weakened by inflation, making it important for Government to consider whether the support provided remained adequate in meeting household needs.
On the country's external position, Mr Zulu said international reserves stood at about US$6.1 billion at the end of August 2026, with projections indicating approximately four months of import cover.
He said this remained below the Vision 2030 ambition of maintaining reserves equivalent to 12 months of imports, highlighting the need to strengthen the country's external position over time.
Mr Zulu said improved credit ratings following progress in debt restructuring were encouraging, but the benefits needed to extend to domestic businesses through more affordable financing and improved access to credit.
He said fiscal discipline and a broader tax base were necessary to support economic stability while creating room for private sector investment and job creation.
Ms Tembatemba said the budget needed to be examined through a human rights and feminist perspective, with particular attention to how public resources affected women, girls, young people, persons with disabilities, small-scale farmers and poor communities.
She said economic growth figures alone could not demonstrate whether the country was making progress when vulnerable groups continued to face difficulties accessing opportunities and essential services.
Ms Tembatemba said the budget needed to respond to the different challenges faced by citizens and ensure that development spending reached communities that needed public support the most.
She said lessons from the 2025 Auditor General's Report were important in assessing how public resources were managed and whether Government institutions were delivering value for money.
Ms Tembatemba said accountability needed to remain central to the implementation of the 2027 Budget because even well-designed policies would have limited impact when resources were not properly managed or projects failed to deliver the intended results.
She said the Grow Zambia 2027–2031 agenda and the Ninth National Development Plan needed to be supported by meaningful citizen participation, allowing communities to contribute to decisions that affected their livelihoods and development priorities.
Ms Tembatemba said citizens also needed to be able to monitor public expenditure and understand how budget allocations translated into projects and services in their communities.
She questioned who benefited from public investments, whether resources were reaching those most in need and what more could be done to ensure that no one was left behind.
Ms Tembatemba said such questions needed to remain central to discussions about the national budget because the true value of public spending was reflected in the lives it improved.
She thanked CSPR for convening the engagement and acknowledged the support of the Swedish International Development Cooperation Agency and the Embassy of Sweden in Zambia.
Responding to issues raised during the discussions, Ministry of Finance and National Planning Senior Economist and Director of the Trade and Tax Budget Office Castagramde Nondo said Government welcomed contributions from stakeholders as it continued examining the proposed 2027 National Budget.
Speaking on behalf of Permanent Secretary for Budget and Economic Affairs Mwaka Mukubesa, Mr Nondo said the national budget was an important statement of Government's plans and priorities, making engagement with civil society, the media and other stakeholders necessary.
Mr Nondo said the discussions had provided an opportunity for different groups to examine the proposals, raise concerns and offer recommendations on issues affecting the country's economic and social development.
He said Government was interested in the views raised on economic growth, exchange-rate developments and tax policy, adding that such contributions formed part of the wider process of examining the budget.
Mr Nondo said public scrutiny and constructive engagement were important in strengthening the budget process, and assured participants that the views gathered would be shared with senior Government officials and Parliament for consideration.
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