LUSAKA, Nov 6 – Zambia is targeting economic growth of around 5% in 2027 while reducing its fiscal deficit to no more than 3% of gross domestic product, as the government seeks to restore budget discipline following a significant increase in public spending this year.
Finance Minister Situmbeko Musokotwane announced the targets in his budget speech on Friday, outlining plans to reduce the deficit from an estimated 5.9% of GDP in 2026.
The wider deficit this year reflects government measures to cushion households and businesses against higher fuel costs associated with the Iran war, including fuel tax reductions. Additional expenditure on maize purchases for the country’s strategic food reserves also contributed to the increase.
Zambia’s economic growth for 2026 was projected at 5.3% last month, providing the basis for the government’s ambition to sustain growth at approximately 5% in the following year while tightening fiscal policy.
The budget targets come as Zambia continues to consolidate its recovery from a prolonged sovereign debt crisis. The country became the first African sovereign to default on its external debt during the COVID-19 period in 2020, triggering years of restructuring negotiations and economic adjustment.
In October, Zambia secured staff-level backing from the International Monetary Fund for a new $1.5 billion programme, providing a framework for continued engagement with the Fund and support for its economic reform agenda.
Mining remains central to the government’s growth and revenue strategy, particularly as Zambia seeks to expand copper production and attract further investment into the sector.
Musokotwane said copper output was projected to reach 930,000 metric tons in 2026, up from approximately 890,000 tons in 2025. He also reaffirmed the government’s commitment to maintaining a stable and predictable fiscal regime for mining companies.
Zambia aims to increase annual copper production to 3 million tons by 2031, more than tripling output from its 2025 level. Achieving that target will require sustained investment in existing mines, new projects and supporting infrastructure.
The government’s fiscal and mining objectives are closely linked. Higher copper production could strengthen export earnings, support foreign exchange availability and expand government revenues, while improved budget management is intended to reduce borrowing requirements and create greater room for development spending.
However, the planned reduction in the deficit will require the government to balance expenditure priorities with revenue mobilisation, particularly as fuel costs, food security needs and mining-sector investment remain important considerations for the economy.
