K212 billion for creditors: the Green Paper prices the new term — and debt service outbids FISP, CDF and free education combined

The first budget document of the renewed mandate is not a speech but a ledger, and its largest line belongs to the creditors. The 2027–2029 Medium-Term Budget Plan Green Paper — now out for consultation ahead of the 2027 budget — commits Zambia to spending K212.2 billion on debt service over three years. That is K63.6 billion more than the K148.6 billion earmarked over the same period for the transfers that carry the government's social contract: the Farmer Input Support Programme, the Constituency Development Fund, free education and school feeding, with support to the Zambia Revenue Authority. Debt service in 2027 alone is projected at K68.4 billion — 6.8 per cent of GDP — covering interest and principal at home and abroad.

The shape of the bill is the Treasury's best argument. In kwacha terms it rises every year — K70.9 billion in 2028, K72.9 billion in 2029 — but as a share of the economy it falls: 6.8 per cent of GDP, then 6.2, then 5.7. That glide path is not a policy so much as an assumption: it holds only if the economy grows as projected. The same document puts K231.8 billion into personnel emoluments across the three years, with the public wage bill contained within 35 per cent of domestic revenue and recruitment prioritised for education and health; K63.2 billion into social benefits — the Social Cash Transfer, Food Security Pack and pensions; and K37.8 billion into clearing domestic arrears, the unpaid bills owed to suppliers and contractors, taking the combined provision for external and domestic obligations to roughly K250 billion.

Against the bill stands a debt stock that is, at last, shrinking. The Ministry of Finance and National Planning says external debt stood at US$15.36 billion at the end of June — down five per cent from US$16.15 billion at the end of December — crediting a second-quarter liability management operation that included the partial repurchase of Eurobond obligations through a debt-for-energy conversion supported by the African Development Bank. It is the first time since the 2020 default that the trajectory and the rhetoric point the same way. The capital programme the debt is meant to make room for is led, as ever, by roads: K42.1 billion over three years, against K26 billion for hospitals and public universities, K9.9 billion for provincial aerodromes, K6.9 billion for water and sanitation and K2.4 billion for rural electrification. Roads alone outspend water, aerodromes and electrification combined.

Who pays for the ledger is the Green Paper's most consequential chapter. The Treasury is drafting a Medium-Term Revenue Strategy for 2027–2031 to widen the tax base: reviewing and streamlining incentives, strengthening property taxation, using mobile digital payment platforms to chase compliance, and pulling informal businesses — artisanal miners explicitly included — into the net, with a tougher line on smuggling. The strategy sits inside the Grow Zambia Agenda's wager, articulated this week by Jito Kayumba, Special Assistant to the President for Finance and Investment: a doubled economy produces more transactions, more revenue, more liquidity — "The higher the transactions, the more government revenue, liquidity in circulation, and economic stimulation." The alternative reading is that the state intends to tax its way out of a debt canyon while asking voters to wait for growth.

Both readings meet in the same corridor. This week an IMF mission is in Lusaka discussing the successor programme that will grade the Green Paper's credibility; this week the fuel excise returned, the Green Paper's exemption-rationalising logic made flesh at K31.46 a litre. The document now goes to consultation before the 2027 budget is laid before Parliament. Every kwacha in it has two claimants — the creditor and the constituent — and the next three years are the argument over which one gets paid first.

Sources: Lusaka Times, "Zambia to Spend K212 Billion Servicing Debt Over Three Years, Outstripping Combined Budget for FISP, CDF and Free Education" (30 Sep 2026); News Diggers, "Govt says it aims to spend K212.2bn on debt service by 2029" (29 Sep 2026); Ministry of Finance and National Planning, 2027–2029 Medium-Term Budget Plan Green Paper (Sep 2026); ministry statement on the external debt position (Sep 2026).