Reduce Dependancy on external Borrowing

The Economics Association of Zambia (EAZ) says the 2025 budget should place a strong emphasis on increasing domestic revenue financing, aiming to reduce Zambia’s dependency on external borrowing.

In a statement issued to the media by association’s President Dr. Oswald Mungule, he said that this is crucial for improving the country’s fiscal sustainability, especially in the context of its current unsustainable debt levels.

Dr. Mungule advocated for government to target domestic revenue contributions of at least 80 percent of the total budget.

“This would involve expanding and diversifying the tax base through progressive measures that capture revenue from a broader spectrum of the economy, including previously under-taxed sectors,” Dr. Mungule said.

EAZ President also emphasised the critical importance of focusing on Energy, Mining, Agriculture, and Manufacturing sectors to drive economic recovery and growth.

“The budget must address the challenges within the energy sector, including petroleum issues and electricity shortages. Increased investment in energy generation and infrastructure is vital to support economic growth across all sectors,” Dr. Mungule added.

Dr. Mungule further stated that mining, as Zambia’s economic backbone, requires a conducive environment for investment and growth, adding that the budget should aim to increase the tax base in the mining sector to enhance domestic revenue generation.

He also said that with agriculture sector employing a significant portion of the population, there is an urgent need to allocate more resources towards mechanization, smart agricultural practices, and supporting the manufacturing value chain, thus providing raw materials for local industries.

“For Zambia to achieve a sustainable and exported economy, manufacturing must be prioritized and the budget should provide incentives and government expenditure on manufacturing investments, especially in sectors such as steel, driven by mining,” Dr. Mungule added.