Minister of Finance Simplex Chithyola Banda Friday presented an K8.05 trillion 2025-2026 national budget that is weighed down by statutory obligations such as debt interest repayment, salaries and wages and pensions and gratuities.

Combined, these eat up a whopping K3.87 trillion, which is 48 percent of the total financial plan.

Of the total budget, recurrent expenses are estimated at K6.04 trillion while development expenditure is estimated at K2.01 trillion.

The budget has a shortfall of K2.47 trillion.

Chithyola Banda told lawmakers that he intends to finance the budget deficit through a K2.32 trillion domestic borrowing and a K145.78 billion foreign borrowing.

Among others, the budget, which he described as production budget, has assumed that authorities will raise K5.58 trillion in both domestic revenue and grants.

As is the case with recent budgets, interest repayment has taken the lion’s share of the budget at K2.17 trillion which is 8.4 percent of GDP and 49.2 percent of domestic revenues.

Of the total public debt interest, foreign debt interest is estimated at K61.2 billion while interest for domestic debt is estimated at K2.11 trillion.

Chithyola Banda said government plans to stimulate economic growth through job creation, reduced dependence on imports and increased export opportunities.

To this effect, government has allocated substantial resources to a number of sectors including agriculture, irrigation, tourism, mining and trade. [See sidebar for allocations].

To mitigate the debt interest burden, government is focusing on production to enhance domestic revenue collection, he said.

“This is coupled with the implementation of the Domestic Revenue Mobilisation Strategy that is expected to broaden the tax base; improve tax compliance, strengthen the capacity for revenue mobilisation and improve non tax revenue collection,” Chithyola Banda said.

In specific allocation, education and skills development has received the highest funding at K1.3 trillion.

The second highest allocation is for health and population sector with a total budget of K741.05 billion.

Agriculture sector ranks third with an allocation of K693.3 billion. This comprises K131.6 billion for Affordable Input Programme (AIP); K99.5 billion for irrigation development; K70 billion for Farm Input Loan Program administered by Neef; K60 billion for maize purchases; K53.1 billion for Admarc recapitalisation; and K38.3 billion for mega farms.

The budget has also made a provision of K10 billion for recruitment and K176 billion for general salary increment.

Among the winners in the budget are people who consume bread and second hand clothes as the budget has removed VAT on the commodities.

Government has also raised the monthly stipend for graduate interns from K80,0