The Financing Question After the Supplementary Budget

On 22 October, Government presented K19.9 billion in supplementary spending estimates, with K18 billion proposed in additional domestic borrowing. This came 13 days after Zambia reached a staff-level agreement on a new IMF programme that envisages a primary surplus of 3 percent of GDP by 2029. Neither the supplementary estimates nor the IMF arrangement has received final approval. Their proximity nevertheless sharpens Part Two’s question: how can Grow Zambia’s 2031 ambitions be financed while the Treasury restores fiscal buffers?

Production targets are not financing plans

Grow Zambia’s targets for maize, copper and electricity describe desired output, not the financing needed to deliver it. The distinction matters. A mine may be commercially funded but require power and transport investment; a private power plant may depend on long-term purchases by ZESCO. Three different exposures must be separated: direct budget expenditure, commercially borne investment risk and obligations that could fall on the public sector through contracts or guarantees. Counting all investment as Government spending would be wrong; ignoring public commitments attached to private projects would be equally misleading.

The FRA Case: When Output Creates a Financing Obligation

We return to an account of FRA provided last week in part one, but with precise numbers. The latest estimates illustrate the distinction. Government says the Food Reserve Agency purchased 2.7 million tonnes of maize against an initial target of 500,000 tonnes. Of the supplementary request, K14.7 billion is intended to pay supplying farmers. Building strategic stocks ahead of a possible lean season can be justified and purchased grain has value. But storage costs, future sales prices and the timing of receipts determine how much of the borrowing is ultimately recovered.

Grow Zambia’s ambition of 10 million tonnes of annual maize production must not become an assumption that Government will buy whatever the market cannot absorb. Processing, private storage, domestic trade and exports are therefore financing questions, not merely agricultural-policy additions.

Copper: The Distance Between Projections and Ambition

At the October 2026 hearings for the 2027 budget, preliminary copper-output projections were 1.08 million tonnes in 2027, 1.25 million in 2028 and 1.40 million in 2029. Against the national target of 3 million tonnes by 2031, production would have to rise by another 1.6 million tonnes in two years: approximately 46.4 percent annually on a compounded basis. This is an arithmetic requirement conditional on the 2029 projection, not a forecast or a finding that the target is impossible.

FIGURE 1  |  Copper output: preliminary projections versus the 2031 target

Sources: Government of Zambia, Presidential Delivery Unit, Mining. The implied 2029–2031 annual growth requirement is calculated by CTPD.

The missing bridge is project-level evidence: which mines and expansions will deliver the additional tonnes, when they will commission, how they will be financed and whether electricity and logistics will be available. Even higher output cannot be entered into the budget as equivalent tax revenue; prices, costs and tax provisions determine the eventual receipts.

Electricity: Capacity Must Reach Consumers

The Ministry of Energy’s Integrated Resource Plan estimated US$11.6 billion in electricity-sector investment through 2030. This is an indicative sector-wide requirement, not a Government spending bill or a financing estimate for the newer 2031 target. On 16 October, the Ministry reported work to validate an Energy Delivery Plan covering generation, transmission and financing gaps on the path to 10,000 MW of installed capacity.

That coordination is crucial. Installed megawatts are not the same as electricity delivered to mines, factories and households. Generation commissioning, network completion and credible purchase arrangements must align. Private capital can build plants, but ZESCO’s payment commitments, guarantees and any associated public support still require scrutiny.

What The Budget Arithmetic Must Reconcile

Preliminary 2027 indicates K271.9 billion in expenditure and K44.9 billion in borrowing, including K37.3 billion domestically. Of course, these are planning figures, not an enacted budget. The proposed K18 billion of additional 2026 borrowing is to be financed through issuance of government securities. Its fiscal implications depend on maturity, interest costs and future refinancing; pressure on private credit depends on the capacity of the domestic market.

A credible Grow Zambia financing schedule will need to identify, project by project, private capital, Treasury commitments, state-owned-enterprise obligations, guarantees, network costs and the dates when productive returns can begin. It should be reconciled with the medium-term borrowing plan and the IMF programme’s proposed oversight of FRA, public-private partnerships and state-owned enterprises.

Where The Two Frameworks Meet

The IMF framework and Grow Zambia cannot yet be declared compatible or incompatible from their headline targets. What remains to be demonstrated is the financing sequence between the 2029 fiscal objective and the 2031 production ambitions. The supplementary request makes the stakes tangible: financing obligations can materialise long before the benefits expected from an economic strategy. The defining factor will largely be whether those obligations have been priced, assigned and funded before they arrive.