Economist Milward Tobias says in its current form, the revised 2025/26 National Budget gives a contradictory picture.
In a written response, Tobias, a former presidential candidate in the September 2025 General Election, observed that while the budget advances the need for fiscal consolidation to create fiscal space for strategic investments, it is sweeping liquidity that would; otherwise, be available to private sector to invest in the strategic areas.
He said widening the fiscal deficit from K2.498 trillion to K3.128 trillion signals increased borrowing thereby sweeping liquidity that would otherwise be available to private sector to invest in the strategic areas.
Said Tobias: “Increased borrowing also entails that the battle to reduce interest rate has yet to begin. If we are to succeed in these sectors, they must be private sector-driven.
“Fiscal consolidation must be a matter of great urgency and utmost seriousness. With a public debt hovering around K21.6 trillion, increased borrowing not only increases the debt but also sustains the other fundamentals that contribute to rising public debt.”
On the basis of the first half budget performance of the 2025/26 financial year, the approved provision has been revised by taking into consideration the recent post-election developments and the socioeconomic challenges.
Total revenue and grants have been revised downwards from K5 578.4 billion to K5.5 trillion and on the other hand, total expenditure has been revised upwards from K8.1 trillion to K8.6 trillion.
The proposed adjustments on revenue and expenditures will result in an increase of the estimated fiscal deficit from K2.5 trillion to K3.1 trillion.
In his 2025/26 Mid-Year Budget Statement, Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha said the deficit is as a result of higher-than-planned expenditures during for the second half-of the financial year.
He said: “It must be noted that some of the expenditures that have increased the deficit are one-off payments such as clearing the backlog of pensions and gratuities, elections and maize purchase.
“Going forward, it is government’s expectation that, ceteris paribus, the deficit will substantially be reduced.”
