Zambia Institute of Chartered Accountants (ZICA) has welcomed the significant reduction in the country’s fiscal deficit, which has narrowed sharply from 9.0 percent of Gross Domestic Product (GDP) in 2021 to 3.1 percent in 2025, with projections indicating a further reduction to 2.1 percent in 2026.
Speaking at a media briefing, ZICA President Yande Mwenye described the development as a positive indicator of improved public financial management, crediting government efforts to restore fiscal stability.
Ms. Mwenye noted that improved fiscal discipline and debt management are strengthening macroeconomic stability.
“We commend the government for the effort as this will bring several important benefits,” Ms. Mwenye said.
She highlighted reduced interest costs on public debt, improved investor confidence, and enhanced exchange rate stability, as some of the expected macroeconomic benefits.
According to Ms. Mwenye, lower borrowing levels will help ease pressure on government finances, freeing up resources for key sectors such as health, education, and infrastructure development.
She also emphasized that reduced reliance on external borrowing could support foreign exchange stability and help contain inflationary pressures.
The ZICA President further highlighted that improved debt management creates fiscal space for development-oriented spending, reducing the proportion of national resources allocated to debt servicing.
“A declining fiscal deficit strengthens economic stability and creates a more
sustainable foundation for long-term growth,” Ms. Mwenye noted.
She, however, raised concern over the government’s request for parliamentary approval of a supplementary budget, warning that while such budgets may be necessary in exceptional circumstances, overuse could undermine fiscal discipline.
“While supplementary budgets can provide flexibility in responding to unforeseen events, over-reliance on them can erode fiscal stability,
weaken accountability, and complicate economic management,” she cautioned.
Ms. Mwenye urged the government to ensure that any supplementary budget requests are backed by transparent justification and subjected to strong oversight mechanisms to safeguard fiscal stability.
“The key is to use them sparingly and ensure they are backed by transparent justification and strong oversight,” she emphasized.
She reaffirmed that sustained fiscal discipline remains key to building a resilient economy and supporting long-term economic growth.
