THE 2027 BUDGET SPEECH – A MISSED OPPORTUNITY
….Preliminary Comments….
By Muhabi Lungu
8/11/2026
Introduction
Two days ago, 6th November, 2026, barely a week after a suplimentary budget for 2026 was passed, Dr Situmbeko Musokotwane presented the 2027 budget speech. Since then, I have wittnessed the majority of pundits ( almost all of them actually) exclaiming, with admirable exuberance and flowing excitment of, Oh HOW great and wonderfull the budget was . Mark my words very carefully here…Although I do not neccessarily and entirely disagree with them, but I am shocked that there have been almost no contrary views with the aim of providing a critical evaluation of the Speech and the measures contained in it. This cannot be RIGHT….
Then, I watched the ZNBC news coverage of last night, on the budget, and was so disapointed at the approach that the TV was switched off in exaspiration. Subsequebtly and after, several phone calls from the media for a Tonse-Pamodzi Alliance perspective, I did indicate to them that the Alliance has not yet sat to make due consideration on the speech as We have been too busy dealing with Treason , Sedition and arbitrary arrests of our members as well as other matters related to the same; so we are yet to make a consolidated view.
However, individual Alliance members will be making comments about their respective concerns on the budget. Hence, it is in this vain that the attached views are being expressed on the Budget. I make these observations as a Development Economist who has practiced economic managment; although operating under a political subtext, created by the environment we have created for ourselves.
In this regard, these prelimanary comments are being made in consultation with the various Tonse-Pamodzi Alliance manifestos as well as the integrated first draft of the Alliance. The comments are with respect to only parts one and two of the Budget speech; macroecomoic developments in 2026 and macroeconomic objectives for 2027. These two parts set the foundation upon which fiscal and monetary policy, in relation to alloccation, revenue measures and expenditure, are arranged in part three. For the moment, parts one and particulary part two, are more relevant than the expenditure framework itself.
Of course, and in due time, Comments on part three will be equally shared. The supposidly big figure of 285 billion, will be evaluated in time. Sutfice to point out. That without a yellow book evaluation and budget performace of the previous year, and some other key considerations, it may not be all that significant anyway.
Comments on Concerns
It is our firm belief ( Tonse-Pamodzi Alliance) that great oportunities have been missed by the 2027 budget address; a wasted opportunity in fact. In addition, concerns regarding lack of clarity in policy frameworkes as well as an indicated direction of abolishing effective programes such as FISP, are of worry. Let us itemize seven key observations, concerns or possible hurdles of the 2027 budget.
1. Lack of a Progressive Tax Regime in the Copper Sector … The greatest missed opportunity in the 2027 budget is that a Windfall Tax on Copper profits was not re-introduced in the minining sector. This is given the fact that notation by the Minister was recorded indicating the Historical Hight of Copper prices reaching an incredible US14,850 dollars; highest ever. Why was this opportunity missed? In 2008, Zambia made ENORMOUS revenue gains when the the price was not this high. This was also the case in 1968, in which a Windfall tax assisted the funding of the Second National Development Plan. Why was no reference made to such a posdibility; a revenue gain which would have greatly assisted in the “Grow Zambia Agenda”
Instead, the Hon Minister proposes a 5% upward adjustment on corporate income tax rate for those sectors that attract a rate 20% and below, which includes agriculture, agro-processing and some non-traditional exports, despite the imminently adverse impact of the projected Super E,Nino that is expected in Central and Southern African region.
Since the mining houses strongly opposed the progressive tax in 2009, one would conclude that this was the case even now. Could it be due, as some international publications have indicated, to campeign support to the UPND party, by some copper producing mining houses? Government should reconsider this possibilty. They should not claim that a Windfall tax is harmfull to an investment climate. Such an argument is hightly debatable.
HOWEVER, it is not being suggested that an imposition should be made without consultation with the mining houses. Robust Consultations should be done. There should be a Win-Win agreement between government and the mining houses. They ought try as Not to attempt would be negligence.
2. Targets under the “Grow Zambia Agenda” appear to be given without an approved Development Plan. In the absence of the Ninth National Development Plan, these targets become a wishful thinking list, existing outside the legislative chamber and a broad based consultative process. They become a presidential vision rather than a nationa one. Why was there no reference to the Vision 2030, with only 4 years remaing before those targets, envisioned in the lobg term plan, were supposed to have been met? A structural and comprihensive development framework is absolutly essential before growth targets or operating pillars are introduced. It appears that governemt has done it the other way round. In addition, there is supposed to be a national review of the current long term national strategic plan and the midiunm term national development plan before the introduction of new growth objectives. Unless, we have now moved away from development planing and have reverted to a complet market economy in which the private sector soly makes those long term targets? Will we not have a new Vision for the next 25 years; from 2031 to 2056? Has this strategy now been replaced by the Grow Zambia Agenda? If this is the case, then, this would be highly imprudent; it should also be categorically stated. Regardless, further explanations are required by the Ministry of Finance on this matter.
3. An inadequatly eplained Export -Led Developmet Agenda …. The targets so far given in the grow Zambia agenda seems to be a designated policy of Export- led growth. In fact the Budget speech is quite clear about this. HOWEVER, such a policy presupposes a competative advantage and comparative productive cost advatages in Agriculture, electricity generation, tourist arrivals and mineral production. Has a conprehensive study been done to ascertain our comparative and competative advatage in agriculture, say in comparision to Malawi; or electricty generation in comparison to the INGA project of the DRC, or the beef productive capacity of Botwsana; due diligence. If we are not careful, we could end up with unsold and rotting maize with our farmers stranded with no market for their productivity. Consideration should also be made that an export-let growth trejectory also requires a weaker currency through either a devaluation or a depreciation; this may not be very beneficial to other sectors of the economy, particulary if the export led growth is in primary commodities, as the 2027 budget appears to emphasize. Also take note that a depreciation in the currency/exchage rate tend to disatvantage investment in equipment heavy importing sectors such as industry. Have the pros and cons been properlt weighed?
Nevertheless, and surffice to point out, this tricky policy mix and how it will be achieved or done, is abscent in the policy section of the 2027 budget address.
4. The specific growth target of 4.9% as a macroecomimc target is dramatically lower than the projected 7.3% real GDP growth in the first half of 2026, as indicated in paragraph 11 of the address. What is the rational or reasoning, as to why there would be a dramatic decline in growth from 7.3% to 4.9% in the following year? This is a significant reduction of 2.4%. What would be the explanation here? Was the earlier projection of 7.3% merely electioneering?
5. An inflationary Budget for 2027 … Eqully, the rate of inflation target of between 6 to 8% as a macroecomic target seems to be facing the wrong direction. Direction in economics is everyrhing. This is given the boast that inflation for 2026 (an election year for which there is usually expansionary expenditure) was down to 6.3 in October this year from 11.2 in December 2025. What expansionary expenditure will account for an expansionary policy the forsees an increament to 8% for 2027. In fact, we were to jump and look at part three of the budget, there are measures there that will excert inflationay preasure to above the 11.2 petcent of last year. This may EXACERBATE the cost of living situation even further. Generally, an expansionary budget leads to short term and midium term inflationary preasure. Particularly when growth targets are persued without a structured policy framework. There needs to be further explaination that are not adequatly coverd in the budget speech. This could present the largest single threat to budget implementation in 2027 and beyound.
6. The Re-oriatation of FISP a Major Worry. In paragraph 31 of the speech, The Minister says…”Madam, the farmer input support programme has traditionally been subsidy based. The programme will be tranasitioned into an agriculture loan scheme to broaden access to financing for our farmers.”… transitioned from *Subsidy to a Loan scheme* ; Wow, like really. How? Honestlt, this is going to be a major agricultural program gutted. The FISP has been one of the main interventions in the Agricultural sector, If we recall correctly, since 2003 under Mwanawasa; 23 years ago. In his campaigns during the 2026 elections, the President clarly undertook a return to 8 bags of fertilizer under a subsidy based FISP. Since the Minister indicates, “I am a beaer of a message” We suppose its safe to assume that the President has dropped this campaign promise. We genuinely caution govenment to take extrem care over this transformation of transitioning FISP from subsidy to a loan. In fairness, FISP should be re-imagined but there are possibly grave and punishing consequences here; especially if extreme ideological positions are the driving force toward this process. Ultimately, farmers should be theroughly consulted over this matter; particularly previouly benefiting farmers.
7. The details of the Debt Sustainabilty Plan will be a given in Committee Stage. …one of the greatest misteps, if it happens, towards making all our economic plans useless would be that of how we deal with debt as a country. Why shuld such a plan be so scantty in the budget and that the public be happy with details being presented in the Committee stage? The publuc needs to know now before it is presented privately. Openess and Transparancy in such matters, that have a direct bearing on financial flows, fiscal and monetary policy must be publically known and evaluated.
Conclusion
Finally, let me conclude with our preliminary remarks by indicating that there are numarous concerns in the budget speech that worry us. For example, that the Bank of Zambia should be launching a small business grant initiative through a special purpose vehicle managed by finicial service providers (paragraph 43). Why should the Bank of Zambia be the institution to do this? Our humble advice is that this should be re-thought. There are other more effective and *less conflict of interest* ways in which a 5 billion kwacha gurantee scheme can be managed. Why not just grant this 250 million dollars to an Indepedent Development Bank with strict fortification from politicians seeking free loans. Or rework the C
Also, we are concerned that part three of the budget ( which we are yet to make substantive comments on) seem to have measures promoting an *Import* *Substitution- Led* *Development* *Strategy* . We thought that the 2027 Budget was strongly stating that its an export-Led strategy? Under normal circumstances, fiscal/ revenue/measures in part three should suppot such a strategy.
Of course, we do support some level of local industry Protection, however if you want to promote export let development, you have to make sure that you do not put policy mearsures in your part three that may result in retaliatory measures from markets which are needed for you primary commodity exports
Before the final paragraph is done, let us just point out that Education is very important to the Tonse-Pamodzi Alliance. Hence, we note with sadnes, that the 13% allocation to this most important Social/Investment/Cultural sector is far bellow the international stadard of 20%.
IT IS OUR belief that well versed economists will understand our concerns raised in the concluding remarks. However, we woule be most ready to explain the details of our observations on ZNBC, if an opportunity were to be granted. The public media house must really make an honest effort to provide critical based information that helps goverment adjust policy, rather than one sided unscrutinized oppinions from individuals with personal agendas.
Economic development requires diffussed, inclusive and democratically free flowing information. An accurate and critical information system that is fully stress tested. It does not require propanganda.
We must point out, however, that the Private media houses, Radio, Television and Print, have performed a fantastic job in creating the foundstion of Checks and Balances and informing the public.
MUHAB LUNGU
Acting Secretary General
TONSE-PAMODZI ALLIANCE