Zambia lowered its economic growth forecasts for 2027 and 2028 to 4.9 percent and 5.0 percent. The previous projections were 6 percent and 7.5 percent. Minister of Finance and National Planning Situmbeko Musokotwane cited the threat El Niño poses to agriculture and the prolonged impact of the Gulf war.
Dr Musokotwane announced the downgrade in Bangkok, Thailand, where he is attending this week’s annual meetings of the International Monetary Fund (IMF) and the World Bank Group.
The weather threat is serious. Global forecasters predict that this year’s El Niño will peak at an intensity never observed in the modern era, compounding man-made climate change. Some countries are already grappling with drought, while others face severe disruptions to monsoon rains that are damaging crops.
Zambia knows the cost of such an event. The El Niño-driven drought of 2024 forced a declaration of a national disaster after the staple maize crop was destroyed. It also caused prolonged electricity outages as the drought choked the hydro-power dams.
The minister said the country is better prepared this time. Strategic maize stocks stand at a record level following this year’s bumper harvest, and the country has added substantial solar power capacity.
The figures support that confidence. Zambia recorded a historic maize harvest of about 4.9 million tonnes in the 2025/2026 farming season. Installed solar capacity rose from 178MW in 2024 to 1,027.5MW, beating the 2026 target of 1,000MW. Total installed generation capacity climbed to 4,722.3MW from 3,777MW in 2024.
Those record maize stocks came at a price. Dr Musokotwane confirmed that the Government had exceeded its initial purchase target of 500,000 metric tonnes and overspent its budget for the strategic reserve.
“Yes, it is true that the amount of money spent to acquire the strategic food reserves is much more than what we had in the budget. Arising from the fact that we bought more,” he said.
As a result, the Government will not release any Treasury money to the Food Reserve Agency (FRA) for the next farming season. Go Back to the Land Zambia executive director Cyprian Chimwendo Phiri described the decision as a setback for small-scale farmers who depend on the agency to buy their produce.
The downgrade came alongside a staff-level agreement with the IMF on a new US$1.5 billion, 36-month Extended Credit Facility (ECF). The programme is subject to approval by the IMF executive board in December.
The new arrangement follows the completion in January of the previous IMF programme. That programme was approved in August 2022 and provided about US$1.7 billion. The successor is expected to address budgetary and balance-of-payments needs, preserve debt sustainability and support more diversified, private sector-led growth.
The IMF expects real GDP growth of 5.6 percent in 2026, down from the 5.8 percent it projected in January. Agriculture, mining and exports are expected to support that growth.
Copper remains the backbone of the economy. The metal contributes about nine percent of GDP, generates 72 percent of export earnings and accounts for nearly half of government revenue.
IMF resident representative Reginald Darius said Zambia is better positioned to withstand shocks associated with El Niño and other global developments. He cited improved agricultural performance, higher foreign exchange reserves and progress in power generation, and said the programme offers flexibility to respond to severe shocks.
Mr Darius also raised concern over fiscal slippages, pointing to spending above budget allocations, particularly FRA maize purchases, and to shortfalls in revenue collection. He called for corrective measures and stronger oversight of state-owned enterprises. He said reforms at the FRA should keep the agency focused on its strategic mandate.
The Centre for Trade Policy and Development (CTPD) urged the Government to make sure the new programme protects spending on education, healthcare, social protection, agriculture and productive infrastructure. It also cautioned against new debt that could undo the gains made through restructuring.
“Macroeconomic stability is necessary, but it is not the final development outcome. The task now is to convert it into one,” CTPD head of advocacy and campaigns Natalie Kaunda said.
In Bangkok, Dr Musokotwane also urged the World Bank Group to sustain concessional financing for Africa. He called for continued international support ahead of the IDA22 replenishment.
The IMF executive board’s decision in December on the US$1.5 billion programme is the next step that will shape how the economy navigates the lower growth path now projected for 2027 and 2028.
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