Zambia’s economic outlook positive-Musokotwane

Minister of Finance and National Planning, Situmbeko Musokotwane, says Zambia’s economy has been growing consistently from 2021 with an average growth of four percent despite many challenges.

Dr Musokotwane said this economic growth must continue so that progress is seen in the lives of the people, adding that further growth will ensure repeated social services in the country.

He expressed optimism that the economy will continue to grow with projected high revenues in the mining and tourism sectors.

“We expect to see a big push in the mining sector in 2026 through to 2028. We have seen strong growth in the tourism sector with visitors in excess of two million visitors per year and that is expected to grow,” he said.

Dr Musokotwane has however disclosed that despite making significant progress on external debt, Zambia’s domestic debt still remains a concern as it has not been restructured.

The minister added that restructuring the domestic debt may negatively impact the financial sector in the country.

He was speaking in Lusaka today during the Town Hall meeting on second quarter budget and economic performance and the 2026 – 2028 medium term budget plan.

Dr Musokotwane appreciated developments in the energy sector saying by the end of the year 2025, an addition of 1,000 more megawatts from solar power sources are expected on the national grid.

And speaking at the same event, Secretary to the Treasury, Felix Nkulukusa, disclosed that in the first quarter of 2025, the economy grew by 4.5 percent compared to 2.2 percent in the first quarter of 2024, representing a 2.3 percent increase in growth compared to the same quarter in 2024.

Mr Nkulukusa further disclosed that inflation had gone up to 16.8 percent in February 2025 and as at June 2025, it had slowed down to 14.1 percent.

“In terms of currency performance, the Kwacha is stronger by 19 percent against the dollar in 2025 compared to eight percent last year. In the external sector performance, the gross international reserves increased to US$4.5 billion at end of March 2025 from US$4.3 billion at endnote December, 2024,” he added.

Explaining the 2025 budget outlook, Mr Nkulukusa said tax and non-tax revenue is projected to be on target, supported by increasing mining production, prudent policies and reforms as well as decreasing shocks.

He however said down risks are anticipated due to volatility in the exchange rate, copper prices and uncertainties in production which may lead to a decline in revenues.

He also disclosed that external debt obligations are expected to be higher than initially planned following the successful debt restructuring, adding that spending pressures will be driven by fuel arrears, Farmer Input Support Programme and social protection programmes.

Mr Nkulukusa noted that in the medium-term outlook, Zambia is expected to outperform its peers with a 6.4 percent projected gross domestic product growth in 2026 due to an increasing mining production, restored debt sustainability and effective reforms.

Meanwhile, Ministry of Finance and National Planning Permanent Secretary for Planning and Administration, Prudence Kaoma, said the government is prioritising the development of sustainable financing models for essential services to cushion against abrupt withdrawal of donor support.

Ms Kaoma also said the government is accelerating digital infrastructure investments in rural and underserved areas.

“Government is also strengthening the policy and regulatory environment to attract greater private sector involvement in national development,” she added.