Africa-Press – Zambia. Critiquing the 2025 budget from an opposition standpoint requires a focus on areas where the government’s plans may fall short, where there could be inconsistencies, or where the budget may not fully address key issues. Here is a critical analysis of the 2025 budget presented by Honourable Dr. Situmbeko Musokotwane, from the perspective of an opposition party:
1. Unrealistic Economic Growth Projections
The government’s projection of 6.6% GDP growth for 2025 seems overly ambitious, especially considering the slowdown in global growth and the domestic economic contraction due to the severe drought in 2024. With the Zambian economy only expected to grow by 2.3% in 2024, a jump to 6.6% within one year seems optimistic at best. This optimism is built on hopes of a recovery in agriculture and mining, but these sectors have historically been volatile and susceptible to external shocks, particularly climate change. There is little in the budget to suggest how these ambitious targets will be met in a practical and sustainable manner.
2. Debt Servicing Burden
The allocation of K37.3 billion to domestic debt servicing and K16.7 billion to external debt paints a bleak picture of Zambia’s fiscal health. This means over 25% of the budget is being used to service debt, rather than to directly benefit citizens. While the government claims progress in debt restructuring, the real impact of debt on the economy is still significant. This massive debt burden continues to limit fiscal space for social services, infrastructure development, and job creation.
Additionally, the government’s borrowing plan raises concerns about the sustainability of Zambia’s financial future. Borrowing K34.7 billion (16% of the budget) may solve short-term liquidity issues, but without clear long-term strategies for economic growth and revenue generation, this could lead Zambia back into a debt trap. The opposition should demand a clearer and more sustainable debt management strategy.
3. Inflation and Cost of Living Crisis
The budget acknowledges high inflation, with a rise to 15.6% in 2024, primarily due to the drought and depreciation of the Kwacha. However, the government’s target to reduce inflation to 6-8% seems overly optimistic given the economic realities. The budget does not offer sufficient measures to address the cost of living crisis that Zambians are currently facing. While efforts such as the Social Cash Transfer and Cash for Work Programme are commendable, they are temporary fixes and do not address the root causes of inflation, such as food and fuel prices. There is little in the budget to suggest a sustainable plan for tackling inflationary pressures or cushioning households from rising costs.
4. Agriculture Sector – Overreliance on Drought Recovery
The government places heavy emphasis on agricultural recovery, projecting it to be a significant driver of economic growth in 2025. However, this fails to take into account the deep structural problems facing Zambia’s agriculture sector, including climate vulnerability and poor infrastructure. The measures outlined in the budget, such as irrigation development and dam construction, are not enough to transform the sector, which is still largely dependent on seasonal rainfall.
The Farmer Input Support Programme (FISP) continues to be marred by inefficiencies, and there is a lack of clear plans on how to reform it beyond a shift to the e-voucher system. Without addressing issues like limited access to markets, post-harvest losses, and low mechanization, the sector is unlikely to achieve the desired growth.
5. Overreliance on Mining
While mining remains a key sector for Zambia’s economy, the government’s reliance on it for future growth is problematic. The budget speaks of a recovery in the mining sector and mentions investment in new projects, yet there is insufficient discussion about the long-term sustainability of mining and diversification. Copper prices are highly volatile, and Zambia’s overdependence on this single commodity exposes the economy to global shocks.
Additionally, the environmental and social costs of mining are not adequately addressed in the budget. The government seems more focused on reviving mines without offering strong environmental protections or addressing the inequitable distribution of mining revenues to local communities.
6. Education and Healthcare Underfunding
While education and healthcare receive significant allocations (14.5% and 10.7% of the budget, respectively), the amounts may still be insufficient to meet the growing needs of the population. Zambia’s education system, for instance, suffers from overcrowded classrooms, poor infrastructure, and inadequate teacher training. Despite an increase in teacher recruitment, the teacher-pupil ratio remains high, and the quality of education continues to decline.
Similarly, the health sector has long faced challenges such as drug shortages, inadequate facilities, and overburdened healthcare workers. The K23.2 billion allocated to the health sector may not be enough to address these issues comprehensively, especially when the majority of funds will likely go to maintaining current facilities rather than expanding access to healthcare, particularly in rural areas.
7. Constituency Development Fund (CDF) Issues
The Constituency Development Fund (CDF), allocated K5.6 billion, has been hailed as a game-changer. However, its implementation has been inconsistent across the country, with many constituencies experiencing delays and bureaucratic inefficiencies in accessing and utilizing these funds. There is also a concern about transparency and accountability in the disbursement and use of CDF, raising fears of potential misuse for political gain. The opposition could argue that more stringent oversight mechanisms are required to ensure equitable distribution and effective utilization of the CDF.
8. Environmental Sustainability – Lack of Ambition
While the budget includes measures related to environmental protection and climate change resilience, the allocation of just 0.7% of the budget to environmental protection is inadequate, especially in light of the drought and climate vulnerabilities Zambia faces. The National Green Growth Strategy seems more like a token gesture rather than a comprehensive plan for environmental sustainability. More ambitious climate adaptation and mitigation strategies are required, especially for a country heavily dependent on climate-sensitive sectors like agriculture and hydropower.
9. Social Protection – Insufficient Coverage
The government’s Social Cash Transfer program and other social safety nets, while helpful, may not be sufficient to cover the vast number of vulnerable households affected by the drought and economic hardships. The K400 emergency transfer for drought victims, though welcome, may not significantly change the lives of those suffering from food insecurity and loss of income.
Conclusion:
The 2025 budget, while presenting some promising interventions, falls short in critical areas such as debt management, agriculture reform, social protection, and inflation control. The ambitious growth targets appear disconnected from the realities of Zambia’s economic challenges, and the budget does not provide sufficient safeguards to ensure inclusive and sustainable growth. More focused, long-term strategies are needed to address the deep-rooted structural problems in Zambia’s economy.
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