Zambia is aiming for a strong economic recovery next year, with plans to significantly reduce its budget deficit, Finance Minister Situmbeko Musokotwane announced on Friday.
In his budget speech, Musokotwane projected economic growth of 6.6% for 2025, a sharp increase from the 2.3% expected for 2024, as the nation recovers from the severe El Nino-induced drought that has devastated crops across southern Africa and hampered the region’s economic prospects.
The anticipated rebound hinges on improved performances in mining and agriculture. Zambia also aims to cut its budget deficit to 3.1% of GDP by 2025, down from the 6.4% forecast for 2024.
About 80% of the 2024 budget will be covered by domestic revenue, while the remainder will be funded through grants (4%) and borrowing (16%).
Musokotwane added that Zambia is still negotiating debt restructuring with some commercial creditors, following the completion of its Eurobond restructuring.
Zambia recently secured provisional restructuring deals with the Industrial and Commercial Bank of China and China Development Bank, aligning with its IMF program and the “Comparability of Treatment principle” to ensure the Paris Club of creditor nations doesn’t offer larger concessions than other creditors.
The country’s prolonged debt restructuring has stifled investment and impacted local financial markets.
YOU MAY ALSO READ: Former Senegalese minister jailed for embezzlement