Zambia's Annual External Debt Service to Fall to US$900m

Zambia's external debt-service payments will fall to about US$900 million a year from 2026, less than half what the country would have owed had it not restructured its debt, the Secretary to the Treasury has said.

Felix Nkulukusa said Zambia would have faced payments of an estimated US$2.6 billion a year without the restructuring agreed with its creditors. The reduction has eased pressure on the public finances and opened room for spending in priority sectors.

The shift is starkest as a share of what the Government collects. Before the restructuring, close to K70 of every K100 raised in domestic revenue went on servicing external debt. That figure has fallen to roughly K15, freeing resources for education, health, agriculture, social protection and infrastructure.

Mr Nkulukusa said the restructuring, alongside the Government's wider economic reforms, had strengthened macroeconomic stability. Inflation has returned to the six to eight per cent budget target range, while the fiscal deficit has narrowed from nine per cent in 2021 to 3.8 per cent in 2025. International reserves have more than doubled over the same period, rising from about US$3 billion in 2021 to US$6.5 billion by June 2026.

He cautioned that the gains now need protecting through fiscal discipline, prudent borrowing and directing money towards productive investment rather than consumption.

The objective, he said, is to ensure the breathing space created by lower debt-service costs is felt beyond the balance sheet, in more jobs, higher incomes, stronger productivity and better livelihoods for Zambians.