In Kemet, the river kept the accounts.Every year, when the star Sopdet rose before dawn, the Iteru began to swell. At Abu, on the island below the cataracts, priests descended a stone stairway into the water to read the marks cut into its walls.The instrument was called the Nilometer.It did not measure the river's beauty. It measured its promise.A high flood meant black silt on the fields, full granaries and a prosperous harvest. A low flood meant cracked earth, thin cattle and less grain to collect. The fortunes of the kingdom, and the revenues of its treasury, depended on the water.That was the oldest rule in Kemet:You assess the harvest by the river, not by the hopes of the treasury. <h2>The Dream</h2>That year, Pharaoh dreamed.He stood on the riverbank and watched seven fat cows emerge from the water to graze among the reeds. Behind them came seven lean cows, their ribs showing like the ridges of a dry field.He awoke troubled and summoned the Priests of the Sky.They no longer needed a prisoner to interpret dreams. They had instruments, rainfall records and generations of observations."The fat cows have already come, Great House," they said. "The granaries are fuller than in living memory. The Overseer of the Granaries planned to purchase one million measures of grain this year. He bought 2,743,393.""And the lean cows?""They are the Child of the Warm Sea. When the distant waters grow warm, the rains of Kemet fail. The Child comes next season."At the beginning of the year, the court had promised a six-cubit flood. The previous year's mark had been 5.3. But the priests had returned from Abu with a different reading.NILOMETER: 4.9 CUBITS.Lower than last year. Lower than promised.Not a famine. But no longer a feast. <h2>The Scroll of the Two Treasuries</h2>Pharaoh summoned his court to hear the scroll for the coming year.It was read by Nebamun, Overseer of the Two Treasuries, a careful man who had spent years untangling the debts of an earlier reign.The scroll bore the title:Grow Kemet: From Stabilisation to Unlocking Opportunities, Creating Work and Improving Livelihoods for All.It was the largest scroll ever read in the hall: 284.8 billion deben, an eighth more than the year before.And much of it was good news.When the previous reign defaulted, merchants from across the Great Green had come to collect. At the worst point, 45 of every 100 deben the court spent went towards servicing its debts.Now the figure stood at 23.7 of every 100.Not long ago, Kemet could finance barely three-fifths of its own expenditure. Now 82 of every 100 deben would come from its own fields, mines and markets.The tax-gatherers had collected 98, then 104, then 101 parts of every hundred they were asked to deliver. The deficit, which had swollen to 5.9 parts in the year now ending, was to fall to three.The courtiers applauded. They were right to.Then Nebamun read the tax assessment.The applause stopped.Company tax: from 30.1 billion to 42.7 billion deben. An increase of almost two-fifths.The tax on wages: up by a tenth.The tax on every sale in the market: from 16 parts in every hundred to 16 and a half.An old scribe at the back leaned towards his neighbour."The Nilometer says the river is lower," he whispered. "Yet the scroll expects a larger harvest of taxes. One of them is wrong.""Or perhaps both can be true," replied his neighbour. "The mines are deep, and copper does not care about rain."The old scribe was not convinced. He remembered another scroll. <h2>The Seer from Beyond the River</h2>Word of the new scroll crossed the Great Green and reached the counting houses of the bondholders.They had been burned once. They had no intention of being burned again.So they summoned Bilamun, a seer from beyond the river who read treasuries as priests read entrails. They paid him handsomely and gave him a simple instruction."Go to Kemet. Curse the scroll. Tell the world its numbers are sand."Bilamun mounted his she-donkey and travelled to a high place overlooking Pharaoh's treasury. He opened his mouth to curse.He blessed instead."How shall I curse what the gods have not cursed?" he said. "The old debts have been restructured. The tax-gatherers deliver what they promise. The granaries are full."He tried again from a second high place."The dole for the poorest households rises by more than a third, to 10.36 billion deben, reaching more than 1.6 million households. And Kemet now finances almost all of it from its own treasury. The foreign donors once gave 910 million; now they give 129 million. Pharaoh's contribution rises from 6.7 billion to 10.2 billion."From a third high place, he continued:"A new house of skills has been built, and the trades receive 852.7 million deben, three-fifths more than last year. The constituency councils receive 9.05 billion, nearly half as much again. Pharaoh has even insured the land against drought."The bondholders' messengers tore their robes."We paid you to curse!""I can only speak what I see," replied Bilamun.But on the road home, his donkey stopped. <h2>The Donkey Sees</h2>The first time, she stopped at the stairway of the Nilometer and refused to pass.Bilamun struck her. He could not see what she saw: a sword standing in the water at the 4.9-cubit mark, where a lower flood met a higher tax assessment.The second time, she stopped beside a storehouse. Its door stood open. Inside, there was nothing.It had once held the Food Security Pack: seed and fertiliser worth 1.51 billion deben, intended for 320,000 poor farmers.The new scroll contained no allocation for it.Perhaps the seed had been moved to another storehouse. Perhaps not. The scroll did not say.Next door stood the great storehouse of farm inputs. It contained 9.04 billion deben, slightly less than the previous year. Once rising prices were considered, it would buy even less.The third time, the donkey lay down before a granary whose doors were sealed.Bilamun beat her again. This time, the donkey spoke."Am I not the one who carries the load?" she asked. "I carry the wage tax and the market tax. I carry the grain to the granary. And I know what the scribes do not always say aloud."Last year, of every hundred deben the court promised, only 86 reached the road. Of every hundred promised for building, only 72 were spent."And 67 billion deben owed to Pharaoh sit uncollected in the books. Almost exactly what he pays his creditors in a year."ARREARS: 67.0. DEBT SERVICE: 67.6."A full granary feeds no one," said the donkey, "if the door stays shut."Then Bilamun saw the sword. <h2>The Petition of Khunanup</h2>The following morning, a peasant appeared at the palace gate.His name was Khunanup, of the Salt Field. Every scribe knew the type: upright, stubborn and unfortunately eloquent.He had paid every due Pharaoh had ever demanded. During the last great drought, he lost his maize, his goats and most of his savings. Still, he paid.He had not come to curse Pharaoh. He had come to be heard.Three scribes from the Treasury were sent to receive his petition.The first was the Scribe of Taxes."The scroll is fair," he said. "Anyone earning 20,000 deben or less pays not one grain more than last year. Only the rich are asked for more.""Not one grain more than last year?" Khunanup replied. "My son earns 10,000 deben in the city. In the reign of the old measures, that wage paid no tax. Today he pays 13 of every 100. The bands do not move, but prices do. He pays more each year simply for standing still."The second was the Scribe of Granaries."Pharaoh has not forgotten the poor," he said. "The dole rises by more than a third.""I am grateful," Khunanup replied, and he meant it. "But the dole is for households that cannot work. I can work. I am a farmer. I do not want a dole; I want seed."The seed pack is gone from the scroll, and the farm inputs are no larger than last year. In a drought year, seed is what separates a lean season from one we can survive."The third was the Scribe of Accounts."Your daughter can study," he said. "Pharaoh has built an entire new house of skills.""He has," Khunanup replied. "There are 1.95 billion deben for loans to scholars at the great universities, and 1.4 million for bursaries at the trades schools. My daughter wants to become an electrician. Kemet needs electricians. Yet her line in the scroll is less than a thousandth the size of the scholars' allocation."The scribes exchanged glances.They had answers, as scribes always do. The constituency councils also offered bursaries. The skills fund was substantial. The new house was only in its first year.All of it was true.Khunanup bowed."I do not say the scroll is wicked," he said. "I say it was written in a fat year, and it will be read in a lean one." <h2>What Zaphenath-Paneah Knew</h2>That night, Pharaoh sent for the oldest scroll in the royal archive.It contained the counsel of Zaphenath-Paneah, the foreign-born vizier who had once interpreted another Pharaoh's dream of fat cows and lean ones.His advice had been simple.In the years of plenty, take a fifth of the harvest and store it. When the years of want arrive, open the granaries.Pharaoh read it twice.His Kemet had performed the first part well. The granaries were full. More than 2.7 million measures of grain had been purchased, and 9.57 billion deben had been set aside to operate the granary agency and pay for what it had already bought.But Zaphenath-Paneah had raised his levy during the fat years, not the lean. And he had opened the granaries to those who needed them, not only those whose names already appeared on a list.Pharaoh read further, beyond the passage most courtiers remembered.The old scroll recorded what happened when the lean years persisted. First, the people spent their silver. Then they sold their cattle, then their land, and finally themselves, until all of Kemet belonged to the throne.The granary had saved them. It had also come to own them.It was not simply a story about cruelty. It was a story about timing.Relief that arrives early is a safety net. Relief that arrives late becomes a debt. <h2>The Rising</h2>In the season of Akhet, the priests descended the stairway at Abu once more.The river had begun to rise. No one yet knew how far.The scroll would go before the Assembly, where representatives of the nomes would debate it line by line, as they should.Bilamun had blessed it. His donkey had warned against it. Khunanup had asked only that it be judged in the season in which it would be lived.Both could be true.A budget can restore confidence in the treasury and still leave a farmer without seed. It can improve the debt position while failing to collect billions owed to the state. It can promise more revenue without necessarily creating the economic activity needed to sustain it.Pharaoh could raise the tax. He could fill the granaries. He could even insure the land.But the question remained: would the harvest be sufficient to deliver what the scroll promised?Pharaoh stood at the top of the stairway and watched the water creep towards the 4.9-cubit mark.In Kemet, the river kept the accounts.Pharaoh only kept the scroll. <h2>Behind the fable</h2>The story is an allegorical reading of Zambia's 2027 National Budget.Kemet represents Zambia; Pharaoh represents the Government; Nebamun, Overseer of the Two Treasuries, represents the Minister of Finance and National Planning; Grow Kemet represents the Grow Zambia Agenda; and the Assembly represents the National Assembly.One deben represents one kwacha.<h3>The Nilometer and the harvest</h3><ul><li>4.9 cubits: The 2027 GDP growth forecast of 4.9%, against 6% previously projected. The 2026 growth projection is 5.3%.</li><li>The Child of the Warm Sea: El Niño and the anticipated drought during the 2026/2027 rainy season.</li><li>The fat cows: The Food Reserve Agency purchased 2,743,393 tonnes of maize by June 2026, against a target of one million tonnes. The National Food Reserves allocation rises from K2.22 billion to K9.57 billion.</li></ul><h3>The tax assessment</h3><ul><li>Company income tax: K30.06 billion to K42.70 billion, with mining contributing K23.3 billion.</li><li>PAYE: K31.78 billion to K35.37 billion.</li><li>VAT: 16% to 16.5%.</li></ul><h3>Bilamun's blessings</h3><ul><li>Debt service falls from 45.5% of expenditure in 2022 to 23.7%.</li><li>Domestic revenue rises from 58.7% of the Budget in 2021 to 82.1%.</li><li>ZRA collected 98%, 104% and 101% of its targets between 2023 and 2025.</li><li>The fiscal deficit is projected to fall from 5.9% to 3% of GDP.</li><li>Social Cash Transfer rises from K7.65 billion to K10.36 billion, targeting 1,639,034 households.</li><li>Skills Development allocation rises from K531.9 million to K852.7 million.</li><li>Constituency Development Fund rises from K6.25 billion to K9.05 billion.</li><li>Government allocates K21.5 million for drought insurance premiums.</li></ul><h3>The donkey's warnings</h3><ul><li>Food Security Pack: K1.51 billion for 320,000 beneficiaries in 2026, with no allocation identified in the 2027 Budget.</li><li>Farmer Input Support Programme: K9.15 billion to K9.04 billion.</li><li>FY2025 expenditure execution: 86% of the final budget was paid; capital expenditure execution was 72%.</li><li>K67 billion in tax arrears recorded by the Auditor-General, against K67.6 billion in annual debt service.</li></ul><h3>Khunanup's petition</h3><ul><li>PAYE bands remain unchanged for salaries of K20,000 or less.</li><li>A K10,000 salary, expressed in 2027 prices, paid no PAYE in 2014 but faces an effective PAYE rate of 13.3% in 2027.</li><li>Social Cash Transfer targets incapacitated households.</li><li>TEVET bursaries: K1.4 million, against K1.95 billion for student loans and scholarships.</li></ul><h3>The historical references</h3><ul><li>Khunanup: The protagonist of the Middle Kingdom Egyptian text Tale of the Eloquent Peasant, adapted here as a petitioner.</li><li>Bilamun: An allusion to Balaam in Numbers 22–24.</li><li>Zaphenath-Paneah: Joseph's Egyptian name in Genesis 41:45. The advice to store grain appears in Genesis 41:34–36; the subsequent famine and its consequences are described in Genesis 47:13–21.</li><li>Nebamun: A historical Egyptian name associated with scribal and administrative traditions.</li></ul>Sources: KSJ Budget Analysis: The 2027 Budget (8 November 2026); Estimates of Revenue and Expenditure 2027 (Yellow Book), Heads 19, 20, 45, 49, 52 and 89, and revenue estimates; Reuters and Bloomberg reporting on the 2027 growth forecast (October–November 2026).

The Nilometer

The 2027 Budget plans K284.8bn of spending, +12.5% on 2026, with K41.9bn borrowed and 23.7% going on debt service. What it spends, how it is paid for, and how past budgets held up.

KSJ Budget Analysis: The 2027 Budget

Zambia 2027 Budget Analysis

Finance Minister Situmbeko Musokotwane will present Zambia’s 2027 National Budget on October 30, against ambitious targets for economic growth, copper production, electricity generation and fiscal consolidation. The proposed fiscal deficit of 0.2% of GDP is particularly striking. But the real test is whether the numbers will hold during implementation — and what the Government’s financing strategy means for businesses.The K19.9 billion supplementary budget proposed for 2026 illustrates the challenge. Agriculture accounts for K15.8 billion, including K14.7 billion to pay farmers who supplied maize to the Food Reserve Agency (FRA). The FRA purchased 2.7 million tonnes against an original target of 500,000 tonnes. Other allocations include K540 million for university tuition and allowances, K422.5 million for Defence and K300 million for contingencies.The financing plan relies on K18 billion in additional domestic borrowing, supplemented by K1.3 billion in additional revenue collections and K510.8 million in donor funding, alongside smaller savings and unspent balances.The maize purchases may be justified by food-security concerns. The fiscal question is whether such expenditure pressures are adequately anticipated in the original budget. When spending significantly exceeds initial estimates, Government must find additional revenue, cut other expenditure or borrow more. A supplementary budget can be necessary, but repeated adjustments make the credibility of the original fiscal targets harder to assess.The bigger question is what domestic borrowing means for the private sector.Government borrowing competes with businesses for financial resources. Banks and institutional investors compare lending to private firms with investing in Treasury bills and Government bonds. When government securities offer attractive returns relative to the risks and costs of commercial lending, financial institutions have an incentive to allocate more funds to them.This is the crowding-out risk: businesses may face higher borrowing costs or reduced access to credit because Government absorbs a larger share of available domestic financing.The effect is not automatic. Domestic borrowing can also mobilise savings, support economic activity and finance necessary public expenditure. Its impact depends on market liquidity, investor demand, the maturity structure of government debt and the availability of alternative funding. But the risk deserves attention when private investment is expected to drive faster economic growth.A lower policy rate does not guarantee cheaper business loans.The Bank of Zambia’s policy rate influences monetary conditions, but commercial lending rates also reflect banks’ funding costs, credit risks, inflation expectations and returns available on alternative investments.If the policy rate declines while Government continues borrowing heavily, attractive Treasury bill and bond yields could limit the reduction in commercial lending rates. Banks may still prefer government securities to loans for businesses perceived as riskier, particularly small and medium-sized enterprises.The result could be a widening gap between monetary easing and the financing conditions businesses actually experience. A lower policy rate would offer limited relief to an SME if its working-capital loan remains expensive or its application is rejected.This matters for investment in machinery, inventories, construction and expansion. Zambia cannot sustainably pursue growth of 6–7% while productive businesses struggle to access affordable finance.The scale of refinancing also matters. Government’s 2026 Annual Borrowing Plan projected K106 billion in gross domestic borrowing, including substantial refinancing of maturing debt. Gross borrowing should not be confused with new deficit financing: much of it replaces existing obligations. Nevertheless, refinancing requires Government to return to the domestic market, while debt-service payments continue to place pressure on public resources.Zambia is therefore managing two related challenges: financing current expenditure and refinancing past borrowing. The 2027 Budget needs to show how both can be managed without undermining private investment.The Government’s Grow Zambia Agenda provides the economic rationale for getting this balance right. Higher copper production should create opportunities for local suppliers and exporters. More electricity should support mines, manufacturers and agricultural businesses. Higher agricultural output should strengthen rural incomes and food security.The test is whether public expenditure expands productive capacity and generates future economic returns, rather than simply increasing spending.For the 2027 Budget, three questions deserve particular attention: Are the revenue and expenditure assumptions realistic? How much domestic financing will Government require, including refinancing? And will its borrowing strategy leave sufficient capital available for businesses?The projected 0.2% deficit is an important headline, but the private sector will judge the Budget partly by what happens to credit availability, lending rates and investment.The central trade-off is clear: Government must finance its obligations while creating room for businesses to finance growth. Fiscal consolidation and private-sector investment can reinforce each other, but only if the financing strategy supports both.On October 30, the important question will not simply be how much Government plans to spend. It will be whether the Budget can deliver fiscal discipline without making productive investment harder to finance.

Zambia’s 2027 Budget: The real test is whether the numbers hold

Zambia has become better at stabilising its economy. Whether it can turn that stability into growth is a much harder question.The proposed US$1.472 billion IMF programme puts that question at the centre of economic policy. After years of debt restructuring and fiscal adjustment, the country is being asked to sustain a primary surplus, rebuild fiscal buffers and attract the private investment needed to expand productive capacity.The difficulty is that these objectives do not automatically reinforce one another. Fiscal discipline can restore confidence, but if achieved by suppressing productive investment, it can also constrain future growth. Meanwhile, growth that fails to broaden the tax base leaves government with limited room to finance development without accumulating more debt.This is the central tension in Zambia’s next phase: the country must preserve the gains from stabilisation without allowing stabilisation itself to become a constraint on growth. Zambia is entering its next IMF programme from a very different position than it was four years ago.Inflation is down. Foreign reserves have been rebuilt. Debt restructuring has materially changed the country's financing profile. The economy is expected to grow by 5.6% in 2026.And yet the government's fiscal position weakened this year.That combination explains why the new US$1.472 billion, 36-month IMF Extended Credit Facility is more interesting than the headline suggests.This is no longer primarily a rescue programme.It is an attempt to lock in the gains from stabilisation while forcing Zambia to confront the next problem: how to generate faster, more productive growth without reopening the fiscal problems that produced the debt crisis.That is a much harder assignment. <h2>Zambia's fiscal problem did not begin with the IMF</h2>It is worth putting the new programme in historical perspective.For much of the past decade, Zambia's public finances were characterised by persistent deficits.The IMF's fiscal data show sizeable deficits through 2016–19, followed by the extreme deterioration associated with the pandemic and sovereign default. The fiscal deficit widened dramatically in 2020 and 2021 before consolidation began under the previous IMF programme.The important change since then has been the primary balance.Zambia has moved from large primary deficits into primary surplus territory. Under the previous programme, the IMF initially targeted an improvement in the primary balance from a 6% of GDP deficit in 2021 to a 3.2% surplus by 2025.That adjustment has largely happened.So when the new programme talks about reaching a 3% primary surplus by 2029, it is not proposing something Zambia has never done.It is asking Zambia to sustain a degree of fiscal discipline that has already been achieved — and to sustain it for longer.That distinction matters. <h2>But a primary surplus is not a balanced budget</h2>This is where the public debate can easily become confused.A 3% primary surplus does not mean Zambia will have a budget surplus of 3% of GDP.Interest payments are excluded from the primary balance.Zambia can therefore collect more revenue than it spends on everything from salaries and social programmes to capital projects, while still spending more overall once debt-service costs are included.The IMF's recent projections illustrate the point. Zambia's primary position has improved substantially, but the overall deficit remains.This is one reason the new programme should not be interpreted as Zambia suddenly becoming a surplus country.It is better understood as a country trying to maintain a sufficiently large pre-interest fiscal surplus to keep debt on a sustainable path. <h2>And here is the difficult part</h2>The IMF's own assessment identifies the central tension.With expenditure already being kept tight, maintaining primary surpluses above 3% of GDP could leave capital investment subdued unless Zambia succeeds in raising more revenue.That is the real policy problem.Zambia needs fiscal discipline.But Zambia also needs roads, electricity generation, irrigation, water infrastructure, digital infrastructure and human capital.Cutting investment can improve this year's fiscal number.It does not necessarily improve next year's productive capacity.The distinction between cutting waste and cutting investment will therefore become increasingly important. <h2>Revenue is the hinge</h2>This is why the new programme's emphasis on domestic revenue mobilisation deserves more attention than the US$1.47 billion financing figure.The IMF says non-grant revenues increased by 2.6 percentage points of GDP between 2022 and 2025, reaching 22.6% of GDP by the end of 2025.The next phase requires that trend to continue.If government can collect more through better tax administration, compliance and a more coherent tax system, it can maintain fiscal discipline without relying excessively on spending cuts.If revenue disappoints, the adjustment becomes harder.And Zambia has just been given a reminder of that risk. <h2>2026 is the warning</h2>The IMF says the fiscal position weakened this year because revenues underperformed, particularly VAT and fuel-tax collections.At the same time, expenditure rose sharply because the Food Reserve Agency spent substantially more than had been budgeted.This is more than a technical budget deviation.It illustrates the difficulty of running a tightly managed fiscal programme in an economy where government is still expected to respond to agricultural, energy and social pressures.The FRA is a particularly useful example.Food security is a legitimate policy objective. But when agricultural interventions generate expenditure significantly above budget, the cost ultimately appears somewhere in the public finances.The new programme therefore places greater emphasis on FRA oversight, state-owned enterprises and public-private partnerships.That is fundamentally about controlling fiscal risks before they become another debt problem. <h2>The economy is now asking a different question</h2>The encouraging part of the IMF assessment is that Zambia is no longer being discussed primarily through the language of crisis.The IMF expects 5.6% growth in 2026, supported by agriculture, mining and exports. Inflation has fallen to 6.1%, while reserves have risen to US$6.1 billion.Those are meaningful improvements.But they should not be mistaken for structural transformation.Zambia can grow at 5–6% and still struggle to generate enough productive employment.Mining can expand while remaining relatively capital-intensive.Agriculture can perform strongly in a good rainfall year without substantially increasing productivity.And GDP can rise without household incomes improving proportionately.For Zambia, therefore, the composition of growth matters almost as much as the growth rate. <h2>Copper can lift the economy. It cannot transform it alone.</h2>Mining is likely to remain one of Zambia's major growth engines.That is not a weakness in itself.The problem arises if copper remains primarily an export commodity rather than becoming the foundation for a wider industrial ecosystem.The opportunity is to build more Zambian capability around mining: engineering services, equipment, logistics, fabrication, processing, technology and specialised business services.The same logic applies to agriculture.The economic opportunity is not simply producing more maize.It is developing irrigation, storage, agro-processing, cold chains, logistics, inputs and regional markets.That is what makes the government's language around value addition, production and exports important.The test is whether those words translate into investment. <h2>Electricity could determine whether the growth story holds</h2>There is an even more immediate constraint.Electricity.Zambia cannot seriously pursue industrialisation while energy supply remains unreliable.The IMF expects improved electricity supply to support medium-term growth.But fixing the power constraint requires capital at precisely the moment when fiscal policy is supposed to remain tight.That is why private capital matters.Government does not necessarily need to finance every new megawatt itself. But it does need to create conditions under which private investors can finance generation, transmission and related infrastructure at reasonable risk.This brings the new programme back to its most important phrase:private-sector-led growth. <h2>What does this mean for a Zambian business?</h2>This is ultimately where the IMF programme becomes real.For a manufacturer, it means whether electricity is reliable enough to operate.For an importer, it means whether the kwacha and foreign-exchange market remain sufficiently stable to price inventory.For a farmer, it means whether roads, storage, irrigation and markets allow production to become a profitable business.For a mining supplier, it means whether the expansion of copper production creates opportunities for local companies.For a household, it means whether economic growth eventually produces jobs and higher real incomes.Macroeconomic stability matters because it changes these conditions.But stability by itself does not guarantee them. <h2>The danger is becoming good at stabilisation</h2>There is a subtle risk in the new programme.Zambia could successfully maintain fiscal discipline, meet IMF targets and preserve macroeconomic stability — yet fail to change the underlying structure of the economy.That would produce a stable version of the same economy.And that is not enough.The previous programme was successful to the extent that it helped move Zambia away from the immediate consequences of default and macroeconomic instability.The next programme will be judged against a different standard.Did Zambia become more productive?Did private investment increase?Did exports diversify?Did electricity reliability improve?Did manufacturing expand?Did agricultural productivity rise?Did formal and productive employment grow?Did household incomes increase?Those are much harder questions than whether the fiscal numbers met an IMF performance criterion. <h2>The US$1.47 billion is therefore not the main story</h2>The financing matters.The IMF programme matters.Debt sustainability matters.But the bigger story is that Zambia is moving from an era of stabilisation to an era of execution.The country has made genuine progress in rebuilding macroeconomic credibility. The challenge now is avoiding the two extremes: returning to the fiscal excesses of the past, or pursuing such tight consolidation that investment and growth are weakened.The solution lies in the quality of the adjustment.Raise more revenue.Spend better.Control fiscal risks.Protect productive investment.Crowd in private capital.And use mining and agriculture as platforms for broader economic diversification rather than as ends in themselves.That is the economic bargain embedded in the new IMF programme.Zambia has spent the past four years repairing the balance sheet. The next four will determine whether that repair becomes a foundation for growth — or simply a more stable way of managing the same structural weaknesses.

Zambia’s New IMF Deal: Stability Has Been Bought. Can Growth Now Be Delivered?

Zambia wants to grow by about 7% a year.On paper, it is an attractive number.But economic growth does not happen because Government puts a target in a budget document.Someone has to produce it.Someone has to build the factory. Plant the crop. Generate the electricity. Move the goods. Open the business. Hire the worker. Export the product.That is the uncomfortable question Zambia now needs to confront: what exactly will generate the additional economic activity required to reach 7%?The country has spent years dealing with debt, inflation, fiscal pressures and economic instability.Those problems had to be addressed.But stabilisation is not the same thing as growth.The next challenge is harder.Zambia has to increase its productive capacity.And that cannot be done by Government alone.<h3>Government's job is to make production easier</h3>The biggest mistake would be to interpret the 7% target as a reason for Government to simply spend more.Zambia does not have unlimited fiscal space.Government already has competing demands for resources, including debt service, public wages, social programmes and infrastructure.The better question is not simply: how much can Government spend?It is:What can Government do that makes the private sector invest more?Reliable electricity.Better roads.Efficient borders.Predictable taxation.Faster business registration.Secure property rights.Efficient courts.Digital public services.These may sound like ordinary government functions.They are actually growth infrastructure.A company deciding whether to invest millions in a factory is not only looking at Zambia's tax rate.It is looking at whether the electricity will be available.Whether imported machinery will clear the border.Whether licences will arrive on time.Whether roads will move its products.Whether regulations will suddenly change.Whether it can repatriate profits.In other words, the investment climate is itself an economic input.<h3>Electricity may be Zambia's biggest growth constraint</h3>It is difficult to talk seriously about 7% growth without talking about power.A factory that cannot operate reliably cannot produce reliably.A farmer who cannot irrigate cannot increase production consistently.A mine that faces power constraints must find alternative and often more expensive sources.A small business running equipment on a generator is effectively paying an additional tax.This is why Zambia's energy problem should not be treated simply as an energy-sector problem.It is a production problem.Government needs to accelerate investment in generation, transmission, storage and alternative energy sources.But it also needs to think differently about the relationship between energy and investment.The question should increasingly be:How much new economic activity will this additional megawatt enable?That is a much more useful way of thinking about infrastructure.<h3>Agriculture needs to become an industry</h3>Agriculture is another obvious route to growth.But Zambia has spent too much time discussing agriculture primarily in terms of maize, food security and Government support.The bigger opportunity is commercial agriculture.Horticulture.Livestock.Aquaculture.Soybeans.Wheat.Agro-processing.Food manufacturing.Exports.The country has land.It has water.It has a regional market.What it lacks in many value chains is the infrastructure, finance, technology and market organisation to convert those advantages into large-scale commercial production.Farmers also need predictable markets.You cannot expect farmers to make long-term investments if the rules governing crop marketing, imports and exports keep changing.If Zambia wants agricultural growth, it needs to create conditions where a farmer can make a five-year investment decision with reasonable confidence about the market.<h3>Copper must create more than copper</h3>Mining will remain central to Zambia's growth story.But there is a danger in celebrating higher copper production without asking what happens around the copper industry.A mine creates demand for engineers.Transporters.Equipment suppliers.Fabricators.Accountants.Software companies.Maintenance firms.Construction companies.Financial services.Training institutions.This is where the real multiplier effect can emerge.Zambia should therefore not only ask how much copper will be produced.It should ask:How much Zambian business will be created because copper is being produced?That is the difference between an extraction economy and an economy that develops an industrial ecosystem around its natural resources.<h3>The private sector also needs to change</h3>It is easy to put the entire responsibility for economic growth on Government.That would be convenient.It would also be wrong.The private sector has its own growth problem.Too many businesses remain focused on surviving the next month rather than building productive capacity for the next five years.Too many companies have weak financial systems.Too few invest seriously in technology.Too few export.Too few develop products for regional markets.And too many remain heavily dependent on Government spending.A 7% economy requires a different private sector.One that invests.One that takes calculated risks.One that adopts technology.One that trains workers.One that looks beyond Zambia's 20 million consumers towards the much larger African market.<h3>Banks cannot sit outside the growth story</h3>The financial sector has an equally important role.A country cannot achieve investment-led growth if businesses cannot access long-term capital.But this is a two-way problem.Businesses need to become more bankable.They need proper accounts, credible financial statements, stronger governance and clearer business models.Banks, on the other hand, need to develop financing products that better match productive investment.A business borrowing for machinery should not necessarily be treated in the same way as someone seeking short-term working capital.If Zambia wants factories, farms and exporters, its financial system has to become better at financing factories, farms and exporters.<h3>Government also needs to become faster</h3>There is another economic cost that rarely appears in the national accounts.Time.A delayed licence costs a business money.A delayed payment costs a contractor money.A delayed customs clearance disrupts production.A delayed land allocation postpones investment.A slow procurement process ties up capital.Individually, these may look like administrative problems.Collectively, they become an economic problem.This is why Government's digitalisation agenda matters.But putting a slow process online does not automatically make it a fast process.The objective should be a state that is simpler, faster and more predictable.A business should not need personal connections to get a routine government service.It should need to meet the rules.<h3>Zambia also needs to measure the right things</h3>There is a danger that 7% becomes the number everyone celebrates.But GDP growth alone will not tell us whether Zambia is transforming.We should also be asking:How much did private investment increase?How much did exports grow?How much domestic value was created?How many productive jobs were created?How much electricity became available?How much did the cost of transporting goods fall?How many new businesses survived beyond their first few years?How much did labour productivity improve?Those indicators tell us whether growth is broadening the economy or simply being driven by a few large sectors.<h3>The real 7% challenge</h3>Zambia does not need another growth slogan.It needs a production strategy.Government needs to create the conditions.The private sector needs to invest.Banks need to finance productive activity.Farmers need better markets.Mining needs stronger local linkages.Businesses need to become more productive.And the country needs infrastructure that lowers the cost of doing business.The target is therefore bigger than a Government target.It is a question of whether Zambia can build an economy capable of producing significantly more than it does today.Because ultimately, 7% growth cannot be legislated into existence.It cannot be borrowed into existence.It cannot be announced into existence.It has to be produced.

Zambia’s 7% Growth Target: Government Cannot Do It Alone

There are moments when an old idea suddenly becomes relevant again. In Zambia, as we look toward another potentially difficult climate season, one such idea can be found not in a modern economic textbook, but in an ancient agricultural instruction: do not harvest the corners of your field.Leviticus 19:9–10 and Leviticus 23:22 instruct farmers not to reap their fields completely or gather everything from the edges. What remained was to be available to the poor and vulnerable. Deuteronomy 24:19 contains a related principle: if a farmer forgot a sheaf in the field, it was to be left behind rather than collected again. Together, these formed part of a broader system of agricultural provision for vulnerable people.At first glance, this may appear to have little to do with climate change, agricultural insurance or Zambia's food-security challenges. But there is a deeper economic principle embedded in the practice: in times of abundance, deliberately preserve something that can protect society in times of scarcity.That principle was the inspiration behind a paper I wrote in 2023 titled Njala (Hunger) Insurance – Pharaoh and Joseph Climate Change Adaptation Strategy in Zambia. <a href="https://www.academia.edu/105920661/Njala_Insurance_Pharaoh_and_Joseph_Climate_Change_Adaptation_Strategy_in_Zambia" rel="noopener noreferrer" target="_blank">https://www.academia.edu/105920661/Njala_Insurance_Pharaoh_and_Joseph_Climate_Change_Adaptation_Strategy_in_Zambia</a> The idea was simple: if Zambia is increasingly exposed to droughts, floods and unpredictable agricultural seasons, perhaps we should think differently about how farmers insure themselves against hunger.The conventional insurance model requires a farmer to pay a premium, usually in cash, in exchange for protection against a future loss. But for a smallholder farmer whose income is largely tied to the harvest, finding cash to pay an insurance premium can itself be a challenge. Why not allow part of the harvest to become the insurance contribution?This is the basic idea behind Njala Insurance.A farmer could, for example, contribute a small percentage of their maize harvest to a structured food-security reserve. Rather than selling or consuming every kilogram produced in a good year, a small portion would be deliberately set aside. In a bad year, that reserve could be used to provide food, income support, seed or other assistance to farmers and communities affected by climate shocks.It is, in essence, an agricultural insurance mechanism built around the physical commodity rather than solely around money.The idea also draws from the biblical story of Pharaoh and Joseph. When Joseph interpreted Pharaoh's dreams as a warning of seven years of abundance followed by seven years of famine, his recommendation was not to wait for the famine before acting. Egypt was advised to use the years of plenty to accumulate reserves that could be drawn down when food became scarce.The economic lesson is timeless: a society that consumes all of its surplus during good times leaves itself dangerously exposed when conditions change.Zambia knows this lesson particularly well.Agriculture remains highly dependent on rainfall, while climate variability is making the traditional assumptions about farming seasons increasingly unreliable. Drought does not only reduce maize production. It affects household incomes, livestock, food prices, electricity generation, government finances and the ability of farmers to purchase inputs for the following season. A climate shock can quickly become a broader economic shock.This is why the conversation about climate adaptation needs to move beyond what happens after a disaster.We tend to think of resilience in terms of what the government will do when a drought occurs: how much maize will be imported, how much relief will be distributed, how much money will be allocated and how vulnerable households will be supported.But insurance works differently. Insurance asks us to prepare before the disaster.The developing El Niño provides another reason to have this conversation now.El Niño does not automatically mean that Zambia will experience drought, and every El Niño event is different. But Southern Africa has historically experienced significant rainfall disruptions during some El Niño events, and the emergence of a strong event should give policymakers, farmers and businesses reason to think seriously about climate preparedness.The important question is therefore not whether we can predict exactly what the 2026/27 agricultural season will look like.We probably cannot.The better question is whether Zambia can build systems that remain useful even when our predictions are wrong.That is where Njala Insurance becomes interesting.Imagine a farmer harvesting 100 bags of maize. Instead of treating all 100 bags as immediately available for consumption or sale, perhaps five are designated as a resilience contribution. The farmer retains the other 95. Across thousands or millions of farmers, those small contributions could create a significant physical reserve.The reserve could be managed through cooperatives, accredited warehouses or other appropriately regulated institutions. Digital records could track who contributed, how much was stored and what quantity remains. Weather data and agricultural monitoring systems could help determine when a particular region is experiencing a significant climate shock. Mobile money could support financial compensation where appropriate.The idea could also be combined with conventional agricultural insurance.A farmer might contribute grain to a physical reserve while also participating in weather-index insurance. The physical reserve would provide food-security protection, while financial insurance could compensate for income losses. Government could potentially provide some form of subsidy for vulnerable farmers without having to carry the entire cost of disaster response.This would turn the traditional concept of a grain reserve into something more distributed and participatory.Instead of food security being something held entirely by the state, farmers themselves could become participants in the resilience system.But there is an important warning.Njala Insurance should not become another government programme where grain disappears into warehouses, payments are delayed and political considerations determine who receives assistance. The concept would only work if it is built around transparency, accountability and trust.Every contribution would need to be recorded. Every kilogram would need to be accounted for. Storage losses would need to be independently monitored. Release conditions would need to be established before a crisis occurs. Farmers would need to know exactly what their contribution entitles them to receive when a qualifying event takes place.Technology could make this considerably easier than it was in the past.A digital platform could create a farmer-level record of contributions. Warehouse operators could maintain digital inventories. Satellite imagery and weather stations could provide independent evidence of drought conditions. Statistical models could monitor production risks. Mobile payments could distribute compensation. Blockchain may even have a limited role in creating auditable commodity records, although the basic system does not require fashionable technology to work.The important innovation is not the software.It is the institutional design.The deeper lesson from the "corners of the field" is that resilience can be built into ordinary economic behaviour. Farmers do not necessarily need to wait for a government programme to arrive after a disaster. Communities can deliberately preserve a portion of their production before the crisis.That is what makes the idea worth discussing in Zambia today.Climate adaptation is often presented as something requiring billions of dollars in new infrastructure. Those investments are important. Zambia needs irrigation, climate-smart agriculture, better meteorological systems, drought-resistant crops, improved storage and resilient energy infrastructure.But adaptation is also about institutions.It is about designing systems that allow society to absorb shocks without collapsing.A farmer who keeps part of a harvest in reserve is practising a form of adaptation. A community that maintains a grain reserve is practising adaptation. A country that builds strategic food stocks before a drought is practising adaptation.Njala Insurance simply attempts to formalise that instinct.Perhaps Zambia could test the concept rather than debate it indefinitely. A pilot could begin with a few cooperatives in drought-prone districts. Farmers could voluntarily contribute a small percentage of their maize harvest. The pilot could measure participation, storage costs, farmer satisfaction, losses, food-price effects and the ability of the reserve to provide support during a shock.If it works, the model could expand.If it fails, Zambia would learn something relatively cheaply.That is preferable to discovering the weaknesses of our food-security system in the middle of a national drought.The biblical instruction about the corners of the field was never intended as an insurance policy in the modern actuarial sense. But it contained a powerful economic idea: do not consume everything when times are good. Leave something behind for the day when circumstances change.That principle has survived in different forms across human societies. Today, we call it reserves, insurance, buffers, contingency funds and risk management.Perhaps we can call one version of it Njala Insurance.As Zambia watches the climate, the economy and the next agricultural season, we should not only ask how much we can produce.We should ask how much of what we produce we are prepared to preserve.Because the most effective response to tomorrow's hunger may begin with what we are willing to leave in the corners of today's fields.

The Corners of Zambia’s Fields: Why Njala Insurance Could Be Our Answer to the Next El Niño

A strange August shower in Lusaka may have been easy to dismiss. But behind the unusual weather is a much bigger story about a changing climate, an approaching El Niño and the economic risks Zambia should already be preparing for.On 13 August, Zambia had other things on its mind.The country was consumed by elections. Conversations revolved around polling stations, voters, political parties, turnout, results and what the next five years might look like. For a few days, almost everything else seemed secondary.And then, in parts of Lusaka, it rained. Not November rain. Not December rain. Not the familiar afternoon downpour that arrives after the clouds have gathered over the capital during the wet season. August rain.For most people, it was probably little more than an oddity. Some may have welcomed it. Others may simply have carried on with their day. In a country where rain is such a familiar part of life, it is easy to forget just how unusual rainfall can be during the heart of the dry season.Zambia's rainfall follows a remarkably distinct seasonal pattern. The wet season generally runs from around September or October through April, driven largely by the movement of the tropical rain belt. August, by contrast, sits firmly within the country's dry and cool season. The IMF describes the period from May to August as particularly dry, while climate assessments of Zambia note that rainfall is generally concentrated in the wet season.So an August shower in Lusaka is not, by itself, evidence of climate change. Nor can we say that El Niño caused the rain. Weather is too complicated for that kind of conclusion.But perhaps that is precisely why we should pay attention.The important climate story is not necessarily that it rained on one unusual August afternoon. It is that the weather patterns on which Zambia's economy has depended for generations are becoming increasingly difficult to take for granted.Climate change does not always announce itself with a dramatic flood or a catastrophic drought. Sometimes it appears in smaller ways: an unusually warm winter morning, a strange dry spell, a storm arriving at the wrong time, rainfall becoming more erratic, or a season beginning differently from what farmers have come to expect.These events can seem insignificant when viewed individually. Their significance becomes clearer when they form part of a longer pattern.And now, as Zambia looks towards the 2026–27 rainy season, another warning is becoming increasingly difficult to ignore.El Niño is coming.In fact, it is already developing. The World Meteorological Organization warned earlier this year that El Niño was expected to develop from mid-2026, with the phenomenon likely to influence global temperature and rainfall patterns. By June, the WMO was putting the probability of El Niño continuing into November at around 90 percent or higher. The latest forecasts are even more striking.On 13 August — the same day Zambians were going to the polls — the US National Oceanic and Atmospheric Administration's Climate Prediction Center issued an El Niño Advisory. Its latest assessment puts the probability of a very strong El Niño at more than 90 percent during the Northern Hemisphere autumn and winter of 2026–27. There is also a 69 percent probability that the October–December period could reach historically extreme levels.That does not mean Zambia will automatically experience a drought. El Niño is a global climate phenomenon and its local effects are complicated. But Southern Africa is one of the regions where the relationship between El Niño and rainfall has historically mattered greatly.For Zambia, that should immediately get the attention of anyone thinking seriously about the economy.We have been here before. The 2023–24 El Niño season produced one of the worst droughts Zambia had experienced in decades. Agriculture was badly affected, food insecurity increased and the country's dependence on hydropower became a major economic vulnerability. The drought demonstrated something that economists sometimes forget when constructing models: rainfall is an economic variable.When the rains fail, maize production suffers. When maize production falls, food prices come under pressure. When water levels decline, hydropower generation suffers. When electricity becomes unreliable, businesses reduce production or increase their operating costs. When farmers lose income, rural demand weakens. When food and electricity have to be imported, foreign-exchange pressures can increase.A climatic shock can therefore move through an economy in much the same way as a financial shock.It starts in the atmosphere and eventually arrives in household budgets, business balance sheets and government accounts.That is why the coming El Niño should not be treated as a story exclusively for farmers.It is a story for the Bank of Zambia. It is a story for the Ministry of Finance. It is a story for ZESCO, farmers, manufacturers, banks, retailers and investors. It is a story for anyone trying to understand Zambia's inflation, food security, electricity supply and economic growth over the next twelve months.The African Union has already been urging countries to move away from simply responding to climate disasters after they occur and towards anticipatory action. Its 2026 continental discussions on El Niño have specifically highlighted agriculture, energy, water, infrastructure, health and other climate-sensitive sectors.That is the right approach.Because the biggest mistake Zambia could make is to wait for the drought to become obvious before treating it as a serious economic risk.By then, the farmer may already have planted. The reservoir may already be falling. The electricity deficit may already be appearing. The price of maize may already be rising.Preparation works precisely because it happens before the crisis becomes visible.And there is a particularly uncomfortable irony about the timing of all this.Zambia has spent much of 2026 looking at politics. The election has understandably consumed public attention. The country has been debating who should lead, what policies should change and what the next political chapter will look like.But while we have been watching the ballot, another process has been unfolding thousands of kilometres away in the Pacific Ocean.El Niño does not care about election calendars.It will not wait for the new government to settle in. It will not wait for the Cabinet to be appointed. It will not wait for Parliament to debate the budget. And it certainly will not wait for Zambia to finish arguing about politics.The irony is that by the time the political dust settles, the next rainy season will already be approaching.And this is where that strange August shower becomes an interesting metaphor.We should not look at the rain that fell in Lusaka on 13 August and conclude that El Niño has arrived. That would be bad science.But neither should we look at it and shrug off the broader message: the climate system on which we have built our agriculture, energy system and economic expectations is becoming less predictable.The coming months deserve attention.If El Niño strengthens as forecast, Zambia could face a difficult 2026–27 agricultural season. The critical questions will not simply be whether it rains, but when it rains, how much it rains, how evenly that rainfall is distributed and whether there are long dry spells between rainfall events. Even a season that eventually receives reasonable total rainfall can be economically damaging if that rainfall arrives at the wrong time for crops.And that is why the country should be preparing now.Farmers need timely climate information. Energy planners need to stress-test hydropower assumptions. Government needs contingency plans for food and electricity. Businesses should consider their exposure to water, power and agricultural supply chains. Financial institutions should think about agricultural credit risk. Policymakers should incorporate climate scenarios into economic forecasts rather than treating weather as an external surprise.The lesson from the August rain is therefore not that Zambia is suddenly experiencing an El Niño.The lesson is that we should become much better at noticing the signals before they become shocks.On 13 August, Zambia was busy counting votes.Perhaps, in the months ahead, we should also start counting something else: rainfall, reservoir levels, crop conditions, temperatures and the probability of another difficult agricultural season.Because the next major economic shock may not arrive with a political speech, a currency announcement or a budget statement.It may arrive quietly in the clouds.We spent August watching the ballot. By November, we may be watching the sky.And by then, the question will no longer be whether Zambia saw the warning coming.It will be whether we prepared for it.

While Zambia Was Watching the Ballot, the Weather Was Sending a Warning

Zambia’s Treasury released K21.1 billion in July 2026 for social support, public-service wages, debt obligations, government operations and capital projects, according to a statement attributed to Secretary to the Treasury Felix Nkulukusa. The July release opened the second half of the 2026 financial year and brought cumulative Treasury releases from January to July to K152.05 billion. July therefore accounted for about 13.9 per cent of the amount released during the first seven months. Nkulukusa said the allocations were intended to translate public resources into services and tangible benefits. The figures describe funds released by the Treasury, however, and do not by themselves show how quickly receiving institutions spent the money or what outputs were delivered. How the K21.1 billion was allocatedTransfers, subsidies and social benefits: K6.3 billion, or 29.9 per cent of the July total.Public-service wage bill and related obligations: K5.9 billion, or 28.0 per cent.Debt service and domestic arrears: K4.3 billion, or 20.4 per cent.Government programmes and general operations: K3.4 billion, or 16.1 per cent.Capital expenditure: K1.2 billion, or 5.7 per cent.Transfers and the wage bill together absorbed K12.2 billion, or almost 58 per cent of the July total. Debt service and arrears accounted for roughly one-fifth, while capital expenditure represented less than 6 per cent. Percentages may not add precisely to 100 because of rounding. Food security and farmer supportThe Food Reserve Agency received K2.7 billion, making it the largest specifically identified beneficiary under the July transfers. The Farmer Input Support Programme received K660 million, taking cumulative FISP releases for 2026 to K6.4 billion. Those allocations place food security and agricultural support near the centre of the month’s spending priorities. Their practical effect will depend on timely crop purchases, farmer payments, input procurement and transparent beneficiary management. The Zambian Economist has previously examined why speed and transparency are central to FRA crop marketing. Social protection and educationThe Social Cash Transfer Programme received K564.2 million, bringing its cumulative 2026 releases to K2.3 billion. Schools received K841.4 million in grants for the free education programme, taking school grants released during the year to K2.4 billion. Grant-aided institutions, including hospitals and universities, received K709.3 million. A further K507.3 million went to the Public Service Pension Fund for pension obligations. Roads lead the capital allocationCapital expenditure totalled a rounded K1.2 billion. The statement identified K592 million for roads, K243.3 million for water infrastructure, K188.9 million for rehabilitation of the National Assembly buildings, K101.3 million for education infrastructure and K50 million for mini-hospital projects. The listed projects add up to K1.1755 billion, broadly consistent with the rounded capital total. Roads alone accounted for just over half of the specified capital allocations. Debt payments remain a major claim on cashTreasury released K4.3 billion for domestic and external debt service and the dismantling of domestic arrears. The statement did not provide a further split among those three obligations. Nkulukusa said continued debt servicing and arrears clearance were important for fiscal credibility and for creating room for investment and economic growth. The allocation also illustrates the continuing pressure that past obligations place on funds available for current services and development. What the release figures do not yet showA Treasury release is an important step in budget execution, but it is not the same as verified expenditure or a completed project. A fuller assessment would require information from the receiving institutions on utilisation rates, procurement, beneficiary coverage, arrears cleared and measurable service outcomes. The Treasury said the second-half focus would be on converting available resources into stronger services, productive infrastructure, economic opportunities and improved livelihoods. It also said expenditure would be prioritised to protect key programmes as geopolitical developments place pressure on global petroleum supplies and fuel prices.

Treasury Releases K21.1 Billion for July Services and Debt

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