Government will not borrow money from outside Zambia in 2026 – Musokotwane
FINANCE and National Planning Minister Situmbeko Musokotwane says does not plan on contracting any new external loans in 2026, with international financing limited only to disbursements from previously contracted debt.
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Presenting the financing framework for the 2026 national budget yesterday, Dr Musokotwane explained that government expenditure is projected at K253.09 billion, while total revenues and grants are expected to reach K218.60 billion.
He said this leaves a fiscal deficit of K34.49 billion, which will be financed through domestic and external sources.
Of the deficit, K21.62 billion will be raised from the domestic market through government securities, while K12.87 billion will come from scheduled disbursements of existing foreign loans.
“The government does not plan to contract any new external loans in 2026. External financing will only reflect drawdowns from already signed loan agreements,” he said.
According to the Minister, domestic borrowing will serve two purposes with financing part of the 2026 budget deficit and refinancing existing domestic debt maturities.
He explained that gross domestic borrowing is projected at K106 billion, of which K84.38 billion will be used to refinance debt falling due, while the remaining K21.62 billion will cover part of the budget shortfall.
From 2026, government also plans to launch market-based domestic debt optimisation operations, including the re-introduction of a benchmark bond programme aimed at deepening the local capital market, extending debt maturities and easing redemption pressures in the medium to long term.
“Government securities will be issued in both competitive and non-competitive auctions, with bonds carrying maturities ranging from two to 15 years, and Treasury bills ranging from 91 to 364 days. The Bank of Zambia will continue to act as fiscal agent, managing the issuance process,” explained Dr Musokotwane.
Dr Musokotwane stressed that government’s borrowing strategy remains anchored on balancing fiscal needs with long term sustainability.
“Yield rates on government securities will remain market-driven, but our objective is to borrow at the least possible cost while maintaining prudent risk levels,” he said.
The maximum limit on net domestic financing for 2026 has been set at K21.62 billion.
By Catherine Pule
Kalemba, September 27, 2025