Minister of Finance and National Planning has disclosed that the Treasury allocated K10.9 billion towards domestic and external debt service as well as the dismantling of local arrears in December 2025, out of the K22.1 billion released to finance public service delivery across the country.
Of the K10.9 billion, K5.9 billion was applied to domestic debt service, K1.5 billion to external debt obligations, while K3.5 billion went towards dismantling domestic arrears, in line with Government’s debt management strategy.
Reflecting on the December 2025 budget releases, Dr. Situmbeko Musokotwane, stated that the payments remain central to sustaining fiscal credibility, preserving the gains from debt restructuring, and preventing the accumulation of new arrears as Zambia safeguards macroeconomic stability and long-term growth.
“The December budget releases were structured to sustain essential service delivery, honour debt obligations, dismantle domestic arrears, protect vulnerable households, and support productive capital investment in line with national development priorities,” Dr. Musokotwane said.
He added that the releases reinforced Government’s determination to consolidate stability and translate it into tangible economic expansion as Zambia advances beyond the International Monetary Fund (IMF)-supported Extended Credit Facility (ECF) Programme into a more growth-focused framework anchored on sound economic governance, investment, productivity and job creation.
“Of the total amount released, K4.6 billion was allocated to the Public Service Wage Bill, while K10.9 billion was directed towards debt service and the dismantling of domestic arrears. Further, K2.5 billion was released for transfers, subsidies and social benefits, K1.9 billion supported the implementation of Government programmes and general operations, and K2.2 billion was invested in capital expenditure,” he said.
“This reflects continued commitment to prudent debt management, and the protection of priority social and economic programmes. This also symbolized the final disbursement leading to the conclusion of the 2025 Budget implementation cycle,” he added.
Dr. Musokotwane disclosed that under the Transfers and Subsidies category, the Treasury released K2.5 billion to support critical institutions and protect vulnerable households.
“This included K1.3 billion to Grant-Aided Institutions, including hospitals and universities, to sustain service delivery and operations, K958.4 million for the Social Cash Transfer programme to protect vulnerable households, and K240.7 million to the Local Government Equalization Fund to strengthen service provision at sub-national level,” he noted.
He further revealed that K1.9 billion was released to support the implementation of Government programmes and general operations across public institutions, ensuring uninterrupted programme execution and smooth delivery of administrative functions.
On capital expenditure, the Minister said K2.2 billion was released to finance ongoing infrastructure development as part of efforts to translate macroeconomic stability into productivity and growth.
Of this amount, K1.3 billion was allocated to road infrastructure, K460 million to projects under the Rural Electrification Authority, and K397 million to infrastructure projects implemented by various ministries.
Dr. Musokotwane also highlighted that spending on the Public Service Wage Bill amounted to K4.6 billion, covering personal emoluments for public service workers in key sectors such as health, education and security services, as well as overseas allowances for diplomats serving in missions abroad.
“While global economic prospects remain turbulent, Zambia offers reason for hope that we are a nation being transformed through better economic management and a steadfast focus on stability, debt sustainability and growth. Consistency and predictability of Treasury releases practiced in 2025 are a clear expression of the New Dawn Administration’s commitment to budget discipline, credible reform, and responsible economic management,” he said.
“The December budget releases closed the year with a firm signal of continuity—confirming that stability is being preserved while the foundations for growth are being actively laid. As the country progresses with the 2026 Budget season, and as Zambia advances beyond the IMF-supported ECF Programme into a more growth-focused framework, the focus is shifting from consolidation to expansion, from recovery to elevated productivity, and from short-term correction to medium-term opportunity and long-term growth,” he added.
A comprehensive performance review of budget execution and reform progress for the period 2021 to 2025 will be presented during a Townhall Meeting scheduled for 29 January 2026.
