Lusaka, Zambia, 2 October 2025 — The Zambia Institute for Policy Analysis and Research (ZIPAR) in partnership with the United Nations in Zambia released today their analysis of the 2026 National Budget, presented under the theme “Closing the Loop: Sustaining Momentum Toward Inclusive and Resilient Growth.” This budget comes at a pivotal moment: it is the final year of the 8th National Development Plan (8NDP) and an election year, when the country must safeguard recent economic progress while addressing urgent social needs.

At K253.1 billion, the 2026 Budget has grown by 16.6 per cent from 2025. But beneath the headline increase, difficult trade-offs remain, as debt repayments continue to consume a considerable share of national resources. The analysis highlights both the opportunities and risks in this year’s allocations.

“The 2026 national budget is more than just a financial plan of government; it is the tool for the people of this country for the delivery of the kind of development that they want to see - in terms of improvements in their livelihoods. The development that leaves no one behind. With effective collaboration between government and its stakeholders- by ensuring continued discipline, unity, and a shared vision, we can turn the promise of this budget into tangible results for every Zambian, for every child, for every youth and for every household,” said the Permanent Secretary of Budget and Economic Affairs, Mwaka C Mukubesa, representing Hon. Dr. Situmbeko Musokotwane, Minister of Finance. 

Zambia’s 2026 budget signals a push for stability and growth. With a 2.1 per cent fiscal deficit target, the Government aims to maintain discipline ahead of elections, supported by the IMF programme. Domestic revenue remains fragile at 22.3 per cent of Gross Domestic Product (GDP), calling for deeper reforms. New financing tools like the electricity fund and Public Private Partnerships (PPP) offer promise but require strong oversight. In addition, increased Constituency Development Fund allocations also highlight a continued focus on local development.

Looking at social sectors, the 2026 budget outlines mixed progress. Education and health see increased allocations with K33 billion and K26.2 billion respectively – supporting teacher and health worker recruitment, infrastructure, and essential supplies. However, education’s share of the overall budget has declined, and health still faces a K21 billion financing gap to meet Zambia’s international commitment in the Abuja Declaration. Social protection funding drops slightly, though the Social Cash Transfer programme will expand to 1.5 million households, with stronger government ownership and commitment to sustainability. Nutrition remains critically underfunded, reaching only a fraction of children in need, while WASH and child protection allocations fall far short of national targets, raising concerns about long-term sustainability and child welfare. 

“The 2026 Budget offers Zambia a unique opportunity: to protect economic stability, to accelerate recovery from the drought, and to ensure that social gains reach every household. If implemented with discipline and inclusiveness, this budget could significantly contribute to achievement of the goals in the national development plan, including attainment of the SDGs. As we prepare for the Ninth National Development Plan and enter the last five years of the SDGs, the choices made now will shape the country’s future," stated the Resident Representative of the United Nations Development Programme (UNDP), James Wakiaga PhD, on behalf of Beatrice Mutali, United Nations Resident Coordinator.

The analysis notes that social spending has slowed as debt pressures grow, and both now consume roughly one-third of the National Budget. This means Zambia is spending as much on repaying debt as it is on delivering essential services to its citizens. Poverty remains stubbornly high, with 60 per cent of Zambians poor in 2024, against a target of 45 per cent by 2026. Children remain especially vulnerable, with 6.6 million facing multidimensional poverty.

“As ZIPAR, we are proud to host this platform where evidence-based analysis meets open dialogue. A national Budget, after all, is far more than a financial spreadsheet—it is the Government's most potent instrument for fostering development. It reflects our priorities for mobilising resources, addressing the urgent needs of our citizens, and building a resilient nation prepared for future challenges. We convene at a truly pivotal moment. The 2026 national budget is not just the final one under the 8th National Development Plan; it also coincides with an election year. This dual significance presents a unique opportunity: the chance to cement the progress made in stabilising our economy and restoring fiscal prudence, while also navigating the risks that can accompany the political season,” said Zali. B. Chikuba, ZIPAR Executive Director. 

As the 8NDP closes, the 2026 Budget must not only protect Zambia’s economic stability but also ensure that social gains reach households. Without stronger investment in health, education, nutrition, and child protection, Zambia risks leaving many behind.

ZIPAR and the United Nations in Zambia urge government and partners to translate budget allocations into real, tangible improvements for ordinary Zambians — from medicines in rural clinics, to teachers in overcrowded classrooms, to cash transfers that keep families afloat.

Note to Editors: 

Macroeconomic and Fiscal Highlights

• Ambitious Growth Target: Government projects the economy to grow by 6.4% in 2026, led by mining, ICT, and energy. While encouraging, this goal faces risks from climate shocks and election-year fiscal pressures.
• Debt Dominates Spending: Over 36% of the budget will go to debt servicing and general public services. This leaves less space for critical investments in health, education, and climate resilience.
• Fiscal Discipline Tested: With elections ahead, spending discipline will be key. Government has set a 2.1% fiscal deficit target, signaling commitment to stability, especially under the IMF Extended Credit Facility.
• Revenue Mobilisation: Domestic revenues are expected at 22.3% of GDP but remain fragile and heavily dependent on taxes. Broader reforms are needed to sustain revenue growth.
• Electricity Fund & PPPs: New financing models, including a proposed electricity fund and public-private partnerships for roads and infrastructure, could unlock growth. However, success depends on strong governance and risk management.
• Constituency Development Fund (CDF): Funding has increased from K36.6 million to K40 million per constituency, reaffirming government’s commitment to local development. However effective administration of the CDF is crucial to its success.

Social Sector Analysis

Despite progress, the analysis notes that social spending has slowed as debt pressures grow. Poverty remains stubbornly high, with 60% of Zambians poor in 2024, against a target of 45% by 2026. Children remain especially vulnerable, with 6.6 million facing multidimensional poverty.

• Education: Allocation rises to K33 billion, supporting teacher recruitment, new school infrastructure, and a 26% increase in Early Childhood Education funding. However, education’s share of the total budget has declined from 14.5% to 13.1%.
• Health: Funding grows to K26.2 billion, including a 30% increase for medicines and recruitment of 2,500 health workers. Yet, a financing gap of K21 billion remains to meet international commitments.
• Social Protection: Allocations decline by 3%, from K16.2 billion to K15.7 billion. The Social Cash Transfer programme will still expand to 1.5 million households, with monthly payments of K400 (K600 for households with disabilities). Importantly, 88% of funding now comes from government, showing stronger national ownership.
• Nutrition: Still severely underfunded, with just K33.7 million allocated — less than 0.02% of the national budget. Current funding for Severe Acute Malnutrition treatment will reach only 15% of children in need.
• Water, Sanitation, and Hygiene (WASH): Funding rises slightly to K2.6 billion, but this represents just 1% of the budget, well below the 8NDP’s 5% target. Structural cost gaps continue to threaten sustainability of water services.
• Child Protection: Alarmingly, funding for child registration and protection services has been slashed, undermining safeguards for vulnerable children. Staffing for social welfare services remain well under the need.

About ZIPAR

The Zambia Institute for Policy Analysis and Research (ZIPAR) is a think tank that provides evidence-based policy analysis to support Zambia’s development agenda. Learn more at Contact Us – Zambia Institute for Policy Analysis and Research

About the United Nations in Zambia

The support of the UN System in Zambia is coordinated under Zambia- United Nations Sustainable Development Cooperation Framework (UNSDCF) 2023–2027, developed in close partnership with the Government of the Republic of Zambia and in consultation with development partners, enables a coherent UN response supporting Zambia to achieve the 2030 Agenda, the African Union’s Agenda 2063 and the country’s National Vision 2030. Learn more at United Nations in Zambia

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For further inquiries, please contact:

ZIPAR 

Penelope Chileshe, Knowledge Manager, ZIPAR. +260974818735

Email: pchileshe@zipar.org.zm 

UNICEF

Mainza Kawanu, Communication Officer, UNICEF. +260969100157.

Email: mkawanu@unicef.org    

UNDP Contact

Mercy Khozi, Communications Analyst, UNDP. +260966750787

Email: mercy.khozi@undp.org