LUSAKA (Reuters) - Zambia is reviewing its 2020 budget after a reduction in revenue as a result of the COVID-19 pandemic and other factors, Secretary to the Treasury Fredson Yamba said on Thursday.
Zambia’s budgeted revenue is estimated to fall short of target by close to 20% as a result of economic adjustments due to COVID-19, the ministry of finance said in April.
Planned expenditure will be adjusted through the review process in line with revised revenue projections, but social spending would remain a priority, Yamba said in a statement.
“One of the key outcomes of this process is the containment of the 2020 fiscal deficit within manageable limits,” he said.
Zambia’s central bank projected in May gross domestic product (GDP) would shrink 2.6% in 2020, its first economic contraction in more than 20 years. GDP grew 1.9% in 2019.[nL8N2D24SW]
Fiscal pressures are expected to heighten in 2020 as revenue performance is hit by COVID-19, while spending to combat the virus rises, the central bank said.
The Zambian government’s external debt stock jumped to 45% of GDP in 2019, up from 37% the previous year, while the total debt stock is estimated at 89%, according to World Bank data.
Reporting by Chris Mfula; Editing by Andrew Cawthorne