Zambia is aiming for a strong economic recovery in 2025, targeting a significant rebound in growth and a substantial reduction in its budget deficit. The country is recovering from a devastating El Niño-drought drought, described as the worst in living memory, which significantly impacted its economy in 2024.
Finance Minister Situmbeko Musokotwane outlined the government's plan in his budget speech on Friday, projecting a growth rate of 6.6% in 2025 compared to a forecasted 2.3% growth in 2024. The recovery is expected to be driven by improved performance in the mining and agricultural sectors.
Zambia also aims to shrink its budget deficit to 3.1% of gross domestic product (GDP) in 2025, down from the projected 6.4% in 2024. Domestic revenues will finance roughly 80% of next year's spending, with the remaining 20% covered by grants (4%) and borrowing (16%).
The minister also highlighted ongoing negotiations with commercial creditors to restructure Zambia's debt, following the successful restructuring of its Eurobonds. The protracted debt restructuring process has previously hindered investment and weighed heavily on local financial markets.