ZAMBIA’S PUBLIC DEBT POSITION AND GOVERNMENT ACTIONS
– By Dr. SITUMBEKO MUSOKOTWANE, MP, Minister of Finance and National Planning
Fellow citizens and other development partners,
As I did in Parliament last week, I wish to address you directly on an issue that understandably attracts strong public interest — Zambia’s public debt: how much has been contracted in recent years, what the current position is, and, most importantly, what Government is doing to manage and reduce risks going forward.
This report is intended to explain the facts in clear and accessible terms so that every stakeholder — whether household, investor, journalist, or entrepreneur — can understand both where we stand and where we are heading as a country.
1.
What Has Happened to Zambia’s Debt Since 2022
Between January 2022 and August 2025, the Government contracted both domestic and external debt as part of the process of managing fiscal obligations, refinancing existing liabilities, and supporting essential public services and development priorities.
On the domestic side, Government borrowing amounted to approximately K69.6 billion in 2022, rising moderately to K73.1 billion in 2023, before DECLINING to K56.1 billion in 2024.
By August 2025, domestic borrowing stood at K62.0 billion. These movements reflect both fiscal financing needs and domestic market conditions, including refinancing of maturing obligations.
On the external side, the Government contracted approximately USD 2.8 billion in 2022 (including the IMF ECF Facility), followed by a sharp decline to about USD 362.6 million in 2023, and further down to approximately USD 209.6 million in 2024.
NO EXTERNAL BORROWING was contracted during the reported period in 2025. This pattern demonstrates a deliberate policy shift toward minimizing external borrowing exposure after 2022 as part of restoring debt sustainability.
It is important for citizens to understand that the USD 2.8 billion external borrowing recorded in 2022 was not primarily new money taken for fresh spending projects. A significant portion of this amount arose from debt restructuring operations and the recognition of already-existing obligations, particularly in the energy sector related to supply of petroleum products.
In simple terms, the 2022 figure includes three main components.
First, the restructuring and recognition of legacy energy-sector debt, especially obligations related to fuel and electricity supply arrangements accumulated in previous years. These were commitments Zambia already owed but had not been fully recorded in Government debt statistics. When they were formalized and restructured, they appeared as new borrowing in 2022 accounts even when they were not. Poor record keeping prior to 2022 led to this situation.
Second, support from cooperating partners and multilateral institutions, largely on concessional terms, intended to stabilize the economy during the recovery period following the debt crisis. These facilities typically carry lower interest rates and longer repayment periods compared to commercial loans.
Third, limited project and program financing, mainly tied to ongoing development commitments rather than new large-scale borrowing initiatives.
What this means for citizens is straightforward: the 2022 external borrowing number looks large because it reflects a clean-up and restructuring of past obligations, not a surge in new debt for new spending.
This distinction matters because it demonstrates the shift Government made starting in 2022 — moving away from expensive borrowing toward debt stabilization, transparency, and sustainability.
2.
Zambia’s Current Debt Position
As of September 2025, Zambia’s total public debt stock stood at approximately K635.2 billion, which is equivalent to about USD 26.6 billion at prevailing exchange rates.
Of this total, domestic debt accounted for roughly K252.8 billion, equivalent to about USD 10.6 billion, while external debt accounted for approximately K382.4 billion, equivalent to about USD 16.0 billion.
These numbers must be understood in context. Zambia entered the current reform period with elevated debt levels and constrained fiscal space. The work since 2021 has therefore focused on stabilization first — restoring credibility, restructuring debt, and rebuilding confidence — before transitioning toward growth and investment in our next phase of economic management and development.
3.
Why Debt Matters to Citizens and Businesses
Public debt is not an abstract concept. It affects everyday life in multiple ways.
For citizens, debt sustainability determines the Government’s ability to fund schools, hospitals, agricultural programs, social protection, and infrastructure without creating inflationary pressures or excessive taxes.
For businesses, debt stability affects interest rates, exchange rate stability, investor confidence, and the availability of credit in the financial system.
For investors, both domestic and international, credible debt management signals whether a country is safe for long-term investment.
This is why restoring fiscal discipline and debt sustainability has been the central pillar of our economic recovery strategy.
4.
Measures Being Taken By The Government To Manage & Settle Debt
The Government has implemented a comprehensive strategy anchored on five core pillars.
First, strengthening domestic revenue mobilization to reduce reliance on borrowing. This includes tax administration reforms, digitization, and broadening the revenue base.
Second, prioritizing concessional financing — meaning loans with low interest rates and long repayment periods — rather than expensive commercial borrowing.
Third, implementing fiscal consolidation measures to create budget space for debt servicing while protecting social spending.
Fourth, engaging creditors through debt restructuring and reprofiling initiatives under international frameworks to reduce repayment pressures.
Fifth, enhancing transparency, monitoring, and reporting systems so that debt management remains accountable and predictable.
These measures are not theoretical. They are already producing results, including improved investor sentiment and increased confidence among cooperating partners.
5.
Transition from Stabilization to Growth
It is important for the nation to recognize that Zambia is now entering a new economic phase.
From 2021 to 2024, the primary focus was economic repair: stabilizing inflation, rebuilding reserves, restoring fiscal credibility, and restructuring debt.
From 2025 onward, the focus shifts toward economic expansion: investment attraction, job creation, infrastructure development, private sector growth, and inclusive prosperity.
Debt sustainability is the bridge between these two phases. Without stabilizing debt, sustainable growth would not be possible.
6.
Reassurance to Citizens
Let me reassure citizens clearly:
The Government is NOT borrowing irresponsibly. Borrowing is being managed within a structured Medium-Term Debt Management Strategy designed to keep debt sustainable and aligned with economic growth capacity.
The objective is simple: ensure that Zambia never returns to a situation where debt crowds out development or undermines national sovereignty.
7.
Message to the Private Sector
To the private sector, both local and international, we are alive to the fact that predictability and credibility in public finances are essential for investment decisions.
The ongoing reforms — fiscal discipline, debt restructuring, and improved transparency — are, therefore, intended precisely to create a stable macroeconomic environment where businesses can expand with confidence.
The Government views the private sector not as a spectator, but as the primary engine of job creation and growth. Through the PPDF, townhalls/symposiums and other consultation and liaison channels, we will continue to regularly engage them.
8.
Role of the Media and Public Accountability
The media plays an essential role in economic governance. Continues accurate reporting will help to strengthen accountability and public understanding.
As Treasury, we encourage responsible analysis BY ALL grounded in VERIFIED DATA so that citizens can engage constructively with national economic issues.
Transparency remains a cornerstone of our policy approach and we will continue to promote it.
9.
The Road Ahead
The Government remains committed to prudent borrowing, sustainable debt levels, economic stability, growth and job creation, and shared prosperity for all citizens.
The journey from recovery to prosperity requires patience, discipline, and partnership across society — Government, businesses, media, and citizens alike.
Zambia is moving forward on a more stable foundation than we inherited, and the future trajectory is significantly stronger than the past.
10.
Conclusion: The Importance of Parliamentary Oversight Through the Annual Borrowing Plan
As we look ahead, it is essential for citizens to understand that Government borrowing is not undertaken arbitrarily. Zambia operates within a structured legal and institutional framework that ensures accountability, transparency, and discipline in debt management.
A central pillar of this framework is the Parliamentary-approved Annual Borrowing Plan.
Each year, the Government submits borrowing proposals to Parliament outlining how much will be borrowed, from which sources, for what purposes, and under what financing terms. This process ensures that borrowing decisions are subjected to democratic scrutiny and national consensus before implementation. It also provides predictability to investors and confidence to citizens that public debt is being managed responsibly. EVERY MEMBER OF PARLIAMENT TAKES PART IN THE APPROVAL PROCESS IN THE NATIONAL ASSEMBLY.
The Annual Borrowing Plan is therefore more than a technical document. It is a governance tool that protects national interests by aligning borrowing with fiscal sustainability, development priorities, economic growth objectives, and debt repayment capacity.
Responsible borrowing is not about avoiding debt entirely. It is about using debt strategically — to invest in infrastructure, energy, agriculture, education, and productive sectors that expand the economy and create jobs.
When borrowing is anchored in Parliamentary approval, transparency, and prudent management, it becomes an instrument of national development rather than a burden on future generations. This is why the legislation was introduced.
Our commitment as Government is clear: every borrowing decision must contribute to Zambia’s long-term prosperity, stability, and economic sovereignty.
WE REMAIN COMMITTED TO THE IMPLEMENTATION OF POLICIES WHICH WILL PROMOTE PRUDENT FISCAL MANAGEMENT, DEBT SUSTAINABILITY AND GROWTH.
(c) MOFNPZambia
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