Minister of Finance and National Planning Situmbeko Musokotwane, says the government has continued to make progress in the external debt restructuring process, with agreements on debt treatment already secured for 94 percent of the debt within the restructuring parameter.

Dr Musokotwane announced this in Parliament yesterday when he presented Supply Supplementary Estimates of Expenditure Number One of 2026 amounting to K26.3 billion.

Out of the proposed K26.3 billion supplementary budget, K7.4 billion has been allocated to the Ministry of Agriculture.

Dr Musokotwane revealed that the final stage of the restructuring process involves concluding bilateral agreements with respective creditors, a process that stands at more than 60% complete.

He said the agreements are critical in enabling the government to meet social payment obligations and other deliverables in line with agreed debt restructuring terms.

“In this context, the additional provision is intended to ensure that the government remains well positioned to meet these obligations while maintaining alignment with the overall fiscal and debt management objectives,” he said.

The Minister explained that the supplementary budget will be financed through additional resources and expenditure realignments within the approved 2026 national budget.

Dr Musokotwane said K2.1 billion will come from cooperating partners as additional project grants, while K1.4 billion will be generated from additional domestic revenues that were not initially projected in the 2026 budget.

He further disclosed that K10 billion will be generated through expenditure rationalization within the approved 2026 budget.

He informed the house that the government earlier received U$D95 million through the International Monetary Fund Extended Credit Facility, which had initially been expected in the fourth quarter of 2025.

Dr Musokotwane added that U$D15 million of the U$D252 million-dollar loan facility from the African Development Bank will be disbursed this year to support the Lobito Corridor project.

The Minister said K5.75 billion will be sourced through additional domestic financing via the government securities market.

Dr Musokotwane attributed the need for the supplementary budget to several developments that arose after Parliament approved the 2026 national budget in December, 2025.

Among the developments he cited were a higher-than-planned public service wage increment following negotiations with public service unions, geopolitical tensions in the Middle East that affected oil prices and fiscal performance.

He also cited additional costs arising from the implementation of the Constitution of Zambia (Amendment) Act Number 13 of 2025.

Dr Musokotwane said the allocation will replenish resources used to pay small-scale farmers who supplied maize during the 2025 crop marketing season and clear arrears owed to agro-dealers under the Farmer Input Support Programme for the 2025/2026 farming season.

“This is to ensure that the government meets its obligations in sustaining national strategic food reserves and supporting stability within the agricultural sector,” he said.

Dr Musokotwane said the measure is aimed at injecting liquidity into the domestic economy.

He adds that K7.5 billion has been proposed under loans and investments.

Dr Musokotwane stressed that K2.1 billion has been earmarked for dismantling domestic arrears owed to contractors and suppliers of goods and services to government institutions.

Meanwhile, K390 million, equivalent to 15 million United States Dollars, will support commencement of works on the Lobito Corridor project, while K610 million has been reserved under the contingency fund to cater for unforeseen expenditures.

The supplementary budget also includes allocation of K1.1 billion to the Electoral Commission of Zambia to address funding shortfalls arising from an increase in polling stations and electoral administration work following constitutional amendments that increased constituencies to 226 from 156.

Dr Musokotwane said K1.1 billion has been allocated to the Ministry of Mines and Minerals Development and that part of the funds will support operations of the Mineral Regulation Commission and continuation of the national aerial geophysical survey aimed at enhancing mineral exploration.