THE 2027 NATIONAL BUDGET: ZAMBIA CANNOT BUILD A GROWTH ECONOMY ON THE STRENGTH OF PRONOUNCEMENTS ALONE 📊 THE PEOPLE’S ECONOMICS (20
MINUTES STUDY TIME)
The widespread approbation accorded to the 2027 National Budget, presented to Parliament by the Minister of Finance and National Planning, Dr Situmbeko Musokotwane, on 6 November 2026, has prompted me to undertake a more searching interrogation of its provisions. Having subjected the expenditure estimates to meticulous scrutiny alongside the Government’s declared economic ambitions, I have encountered a deeply disconcerting incongruity. The eloquence of the policy pronouncements is frequently unsupported by commensurate financial allocations. The further one penetrates the figures, the more conspicuous becomes the absence of sufficient fiscal congruence between the Government’s development aspirations and the instruments through which those aspirations are supposed to be accomplished.
The President’s address to the National Assembly constitutes an authoritative exposition of the Government’s public policy, development priorities and intended economic trajectory. The national budget must consequently give financial expression to those presidential commitments. Its appropriations, taxation measures, financing arrangements and implementation programmes must exhibit demonstrable consonance with the policy direction articulated by the Head of State.
Where the President proclaims accelerated agricultural production, industrial expansion, employment creation and economic transformation, the Minister of Finance bears the responsibility of ensuring that the fiscal framework provides a credible pathway towards their attainment. Otherwise, the nation is left celebrating the grandeur of its ambitions while the financial instruments required for their fulfilment remain conspicuously inadequate.
I make these observations with the benefit of parliamentary experience. I served in the National Assembly during the administration of the late President Levy Patrick Mwanawasa, SC, and witnessed the relationship between presidential direction, ministerial competence and national economic planning. President Mwanawasa was exceptionally discerning in his assessment of the calibre of those entrusted with implementing his economic programme. His determination to secure accomplished professionals transcended Zambia’s territorial boundaries. Ng’andu Peter Magande Z”L, whom he recruited from an international assignment in the Caribbean, became one of the most consequential Ministers of Finance of Zambia’s post 1991 democratic era. His stewardship demonstrated the indispensable importance of translating presidential economic objectives into fiscal measures capable of producing measurable national results.
The contrast between policy declaration and budgetary provision becomes particularly disturbing when we examine the 2027 estimates themselves. The figures that expose the disconnect. The proposed national expenditure for 2027 amounts to K284.77 billion. Of this, approximately K67.59 billion, representing 23.7% of the entire budget, is earmarked for domestic and external debt obligations. Agriculture, fisheries and livestock interventions receive K22.70 billion, representing approximately 8%. Road infrastructure receives K18.15 billion, tourism K1.36 billion, and mining K1.21 billion.
The proposed Development Finance Institution, which is expected to help mobilise productive investment, receives an initial allocation of K400 million. The Public Private Partnership Viability Gap Financing Fund receives K507.3 million. These figures invite a searching interrogation of the relationship between the magnitude of the announced production targets and the fiscal instruments ostensibly designed to facilitate their attainment.
The President has articulated an ambitious economic programme involving three million metric tonnes of copper, ten million metric tonnes of maize, three million metric tonnes of soybeans, one million metric tonnes each of wheat and sugar, US$1 billion in beef exports, 10,000 megawatts of electricity generation capacity and five million international tourist arrivals by 2031. These are formidable objectives requiring extraordinary mobilisation of capital, infrastructure, technology, human resources and productive enterprise.
The budget speech acknowledges that the private sector will be expected to provide much of the investment. However, private capital cannot be summoned into productive existence through policy declarations alone. Investors require reliable electricity, functioning transport networks, bankable projects, affordable finance, predictable regulation and credible markets. The budget must therefore demonstrate how public expenditure will dismantle the impediments that have historically obstructed these investments.
The budget proposes a real GDP growth rate of at least 4.9% for 2027, while aspiring to double the economy over the longer term. The arithmetic of economic expansion deserves greater intellectual attention. At a sustained annual real growth rate of 4.9%, doubling an economy would take approximately fifteen years. A five year doubling ambition would require annual compounded growth of approximately 14.9%. Such acceleration cannot be treated as an automatic consequence of macroeconomic stability. It demands an exceptional increase in productive investment and a rigorously coordinated programme of implementation.
Are we about to abandon the farmer to the market? Of all the policy shifts contained in the budget speech, the proposed restructuring of agricultural support and commodity marketing warrants the most exacting scrutiny. Paragraph 31 announces that the Farmer Input Support Programme will begin transitioning from its traditional subsidy arrangement into an agricultural loan scheme in 2027.
Paragraph 32 announces implementation of new agricultural marketing legislation and the repositioning of the Food Reserve Agency towards strategic food reserves. These are consequential departures from established arrangements. The budget does not expressly announce that the FRA will cease purchasing maize in 2027. However, repositioning the Agency towards strategic reserves raises an unavoidable question about the future of its broader market intervention role, particularly in remote rural communities where private purchasing networks remain underdeveloped.
The Government must explain what will happen to the small scale farmer when the FRA’s purchasing mandate is narrowed and the private sector is expected to assume a greater role in agricultural marketing. Who will purchase the harvest in villages where commercial buyers have little incentive to operate? Who will guarantee a remunerative price when farmers have neither storage facilities nor the financial capacity to withhold their produce from opportunistic middlemen? What protection will exist against geographically concentrated buyers exercising disproportionate bargaining power? What practical value will an announced floor price possess if there is no adequately financed purchasing mechanism capable of defending it?
There is an old illustration of a gazelle and a lion being released into the same arena under the proclamation that both are free to compete. The proclamation confers identical freedom upon creatures possessing profoundly unequal capacities for survival. Such is the predicament of the impoverished small scale farmer when exposed to market forces without adequate institutional protection. The commercial buyer possesses capital, transport, storage, market intelligence and negotiating power. The farmer frequently possesses little beyond the harvested crop and an urgent obligation to feed the family. The law may recognise their contractual equality, but their economic circumstances are manifestly asymmetrical.
Development planning provides an established response to precisely this predicament through the target area and target population approaches. Rather than dispersing public expenditure indiscriminately, the state identifies populations whose economic circumstances require deliberate intervention and concentrates resources where they can generate the greatest developmental multiplier.
Take approximately one million farming households participating in the Farmer Input Support Programme. At an illustrative average of five persons per household, these households represent five million people whose livelihoods are directly connected to agricultural production. Their economic influence extends to rural shopkeepers, transporters, millers, traders, agricultural suppliers and service providers. We are therefore dealing with an extensive economic fabric whose prosperity or impoverishment has ramifications throughout the country.
When a farming household earns sufficient income, the village shopkeeper sells more goods, the transporter receives more business, the miller expands operations, and children remain in school. When the harvest fails to generate income, the entire chain contracts. Rural deprivation subsequently becomes an additional financial burden upon urban households, whose members must remit money to sustain relatives in the villages. The consequences are diminished purchasing power, weakened domestic demand and mounting pressure on household finances across the economy. This is why agricultural marketing cannot be divorced from national industrialisation, employment creation and poverty reduction.
The recent maize procurement crisis illustrates the danger. With a harvest forecast approaching five million metric tonnes and FRA procurement expanding to approximately 2.7 million tonnes, the country encountered serious difficulties financing payments to farmers. The Government’s initial procurement ambition and its eventual financial obligations became dramatically misaligned. A presidential commitment that farmers should receive payment within three days requires more than an administrative instruction. It demands prearranged liquidity, efficient verification, a functioning payment system and accountable institutions. A farmer who has surrendered produce to the state must never be compelled to finance the state’s administrative and fiscal deficiencies through months of unpaid labour.
A presidential pronouncement must become an enforceable administrative obligation. Ministers, permanent secretaries and heads of implementing agencies are entrusted with the responsibility of translating the President’s directives into measurable results. Where the necessary financial and institutional arrangements are absent, they have a duty to identify the deficiencies and secure corrective action. Where officials repeatedly fail to implement attainable commitments, their continued stewardship of those responsibilities deserves rigorous scrutiny. Public office imposes a fiduciary obligation to the nation, and ministerial appointment must carry consequences commensurate with the authority conferred.
I return to the administration of President Levy Mwanawasa Z”L because it offers important lessons in the relationship between political leadership and economic management. Having served in Parliament during that period, I witnessed an administration in which the President’s economic objectives were accompanied by an insistence upon competent fiscal stewardship. Ng’andu Magande’s tenure at the Ministry of Finance exemplified an approach in which macroeconomic management, domestic resource mobilisation and national development priorities were pursued with considerable determination.
The 2008 National Budget provides an especially illuminating example. Magande introduced a far reaching recalibration of the mining fiscal regime. Mineral royalties increased from 0.6% to 3%, the corporate income tax rate applicable to mining companies rose from 25% to 30%, and a variable profit tax and graduated windfall tax were introduced to capture a greater proportion of the extraordinary returns generated by elevated international copper prices. The reforms also addressed the fiscal concessions embedded in the development agreements negotiated during the privatisation of the mines.
The projected additional revenue from these measures was approximately US$415 million in 2008 alone. That projection demonstrated the scale of the resources the Government believed could be mobilised through a more assertive mining fiscal policy. There was an additional dimension to the Magande approach that deserves renewed attention. The Government proposed a special arrangement for managing the windfall receipts, with a transparent mechanism governing their eventual utilisation. This reflected the importance of exercising macroeconomic prudence when a resource dependent economy experiences exceptional revenue inflows.
An abrupt injection of substantial mineral revenues into domestic expenditure can aggravate inflationary pressures, contribute to exchange rate appreciation and undermine the competitiveness of agriculture, manufacturing and other tradable sectors. Economists associate this constellation of risks with Dutch disease. The appropriate response is to manage the absorption of extraordinary revenues while preparing productive investments capable of expanding the economy’s capacity to supply goods and services.
The intellectual significance of that approach extends beyond the immediate collection of mining taxes. It recognises that natural resource revenues require a deliberate intertemporal expenditure strategy. A mineral windfall can finance lasting productive assets, infrastructure and human capital, provided that its expenditure is sequenced with the economy’s absorptive capacity. Without such discipline, temporary commodity prosperity can produce inflationary pressures and leave the productive structure of the economy scarcely improved.
The mining companies resisted the 2008 reforms, with some challenging the Government’s authority to alter the fiscal terms contained in their development agreements. The confrontation revealed the perennial struggle between sovereign fiscal authority and the contractual expectations of multinational mining enterprises. President Mwanawasa’s administration nevertheless proceeded with the reforms, asserting Zambia’s entitlement to a more equitable share of the proceeds from its mineral endowment.
Mwanawasa had already demonstrated his determination to defend Zambia’s interests during an earlier mining crisis. In 2002, Anglo American announced its withdrawal from Konkola Copper Mines, citing financial losses, weak copper market prospects and difficulties securing further project finance. The withdrawal threatened employment, production and the economic security of mining communities. Mwanawasa’s administration mobilised arrangements to sustain operations and pursued alternative investment rather than surrendering the future of the mines to the departing shareholder.
The political lesson from that episode deserves to be expressed with particular force. An investor may withdraw from Zambia, but the copper remains the property of the Zambian nation. Mineral deposits cannot be packed into a departing investor’s luggage. A sovereign government must possess the competence, institutional resilience and negotiating acumen to secure alternative arrangements when commercial relationships become untenable. That was the spirit of Mwanawasa’s response to the Anglo American crisis.
The comparison becomes more consequential when we examine the subsequent tenure of Dr Situmbeko Musokotwane as Minister of Finance under President Rupiah Banda Z”L. In the 2009 National Budget, Musokotwane removed the windfall tax introduced under Magande, while retaining the variable profit tax and the principal increases in mineral royalties and corporate income tax. His explanation was that the windfall tax, being levied on revenue above specified copper price thresholds without sufficient allowance for production costs, imposed an excessive burden on some mining operations. We tried to challenge Musokotwane on the floor of the House, but he went ahead with his plans.
The distinction between the two ministers is therefore discernible in their respective approaches to capturing exceptional mineral revenues. Magande pursued a more assertive fiscal regime designed to increase the state’s share of mineral wealth during periods of elevated commodity prices. Musokotwane subsequently preferred a profit sensitive mechanism and removed the windfall levy, arguing that the revised regime would better preserve mining investment and operational viability.
These contrasting policy judgements deserve examination against Zambia’s enduring developmental predicament. How should a mineral rich country distribute the economic rent arising from the exploitation of an exhaustible national resource? What proportion should accrue to investors as compensation for capital, technology and commercial risk? What proportion should accrue to the sovereign owner of the mineral endowment? How should the state’s share be converted into productive assets capable of sustaining national prosperity long after individual mineral deposits have been exhausted?
These are questions of fiscal sovereignty, intergenerational equity and national economic stewardship. They assume renewed importance because Dr Musokotwane, who presided over the 2009 changes, is once again responsible for the national fiscal framework in 2027. The historical record provides an opportunity to examine the continuity and evolution of his economic philosophy alongside the earlier approach pursued by Magande under President Mwanawasa.
The 2027 Budget introduces additional taxation measures estimated to raise approximately K10.8 billion, including an increase in value added tax from 16 percent to 16.5 percent, alongside adjustments affecting personal incomes and agricultural enterprises. These measures deserve scrutiny for their possible effects on household purchasing power, production costs and private investment. Increasing revenue collections without a corresponding expansion of productive capacity risks transferring additional financial pressure onto the very households and enterprises expected to propel economic growth.
The relationship between taxation, agricultural productivity, irrigation, feeder roads, energy supply and household consumption cannot be treated as a collection of unrelated fiscal matters. An economy grows sustainably when its productive base expands, employment increases and households acquire greater purchasing power. Revenue mobilisation must reinforce that process.
Zambia once understood the discipline of development planning. Our economic history contains another important lesson. The First National Development Plan pursued import substitution and the establishment of domestic industrial capacity. Industrial enterprises, public investment, infrastructure development and the activities of the state were directed towards reducing dependence on imported manufactured goods. Zambia subsequently established a considerable industrial base, encompassing manufacturing, processing and other productive enterprises.
The transition to the one party political system in 1973 introduced an increasingly consequential tension between economic development and political preservation. The national development plans of that era must be examined within their historical circumstances, including the incorporation of Humanism into the objectives of national planning. The Third National Development Plan, covering 1979 to 1983, is especially relevant to this discussion. My concern is the gradual subordination of economic performance to political imperatives and the institutional consequences of allowing ideological and political objectives to displace measurable productive outcomes.
A country cannot achieve economic transformation when the perpetuation of political power becomes the overriding preoccupation of public administration. Development planning requires institutional continuity, intellectual independence, disciplined implementation and an unrelenting commitment to results. The state must possess the capacity to identify national priorities, mobilise the necessary resources and sustain implementation beyond the immediate calculations of political expediency.
The President needs people who will build his legacy. One of the most pernicious tendencies in African governance is the inclination of public officials to tell political leaders what they wish to hear. Ministers and senior public servants sometimes become preoccupied with retaining their appointments, even when their responsibilities demand candid professional advice and difficult decisions. Such conduct deprives national leadership of the intellectual candour upon which sound public policy depends.
A President cannot personally administer every ministry, negotiate every investment, supervise every payment or oversee every agricultural marketing transaction. That is why executive authority is distributed among ministers and other public institutions. Their responsibility is to exercise professional judgement, anticipate implementation difficulties, coordinate resources and ensure that presidential commitments become verifiable national achievements.
Those entrusted with assisting the President must regard themselves as custodians of his developmental legacy. They must possess the intellectual courage to identify weaknesses in proposed policies, the professional competence to devise workable solutions and the moral fortitude to communicate uncomfortable realities before those realities metastasise into national crises.
I have never subscribed to the philosophy of misleading a leader in order to preserve personal advantage. My conscience would never permit such conduct. There are individuals who appear to approach public service with an exit strategy already prepared, even as the policies under their stewardship threaten to drive the country into economic difficulty. Their calculations concern personal survival after institutional failure. A conscientious public servant should instead be preoccupied with the enduring consequences of the decisions made while exercising public authority.
President Hakainde Hichilema has articulated an ambitious programme for Zambia’s economic transformation. The responsibility of those entrusted with implementing that programme is to ensure that the country’s fiscal decisions, regulatory measures, public investments and institutional capacities are commensurate with those ambitions.
The national budget must be an instrument of economic transformation. The 2027 National Budget must ultimately be judged by its capacity to improve the productive circumstances of Zambian households. Its success will depend upon whether farmers receive remunerative prices and timely payments, whether enterprises gain access to affordable finance, whether electricity becomes sufficiently reliable to sustain industrial production, whether mining generates an equitable contribution to national revenue, and whether economic expansion translates into employment and greater household purchasing power.
The most troubling feature of the budget is the distance between the magnitude of the declared ambitions and the demonstrable adequacy of the instruments provided for their attainment. This disparity deserves sustained parliamentary scrutiny. Every major presidential production target should be accompanied by a corresponding investment requirement, identified financing sources, annual implementation milestones and measurable institutional responsibilities.
A national budget is the financial expression of a government’s development philosophy. Its figures must corroborate its pronouncements. Its appropriations must reinforce its priorities. Its taxation policies must support its productive ambitions. Above all, its implementation must produce tangible improvements in the economic circumstances of the people.
History will judge this administration by the prosperity it creates, the productive institutions it establishes, the poverty it eliminates and the opportunities it bequeaths to succeeding generations. The true measure of economic leadership is the capacity to convert national ambition into national achievement. Zambia deserves a development policy in which presidential vision, fiscal allocations and institutional performance speak with one coherent voice.
Saviour Chishimba
Yehudah Ben David
Principal & Founder
THE PEOPLE’S ACADEMY