Zambia is set to see a larger budget deficit in 2022 than previously forecast, whilst economic growth will decelerate over last year, according to the country’s Finance Minister, Situmbeko Musokotwane.

At the presentation of next year’s budget, the Finance Minister said the 2022 budget deficit is forecast at 9.8% of GDP, surpassing the projected 6.7% deficit from last October.

The budget deficit is expected to not exceed 7.7% of GDP in 2023, a rise from a prior target of no more than 6.3% seen in February.

Economic growth was forecast at 3% this year, and has a target of 4% in 2023. In 2021, Zambia’s economic growth stood at 4.6%, Reuters reports.

In November 2020, Zambia became the first country in Africa to default on its sovereign debt during the Covid crisis, and according to the International Monetary Fund, Zambia is seeking $8.4 billion of debt relief from 2022 to 2025.

“We appeal to our creditors to support us so that together we can quickly attain debt restructuring,” Musokotwane stated.

The country’s external public debt hit $14.87 billion at the end of June this year, the Minister added. Creditors include Chinese lenders and bondholders.

Back in March, the government said external debt stood at $17.27 billion at the end of last year. Whereas in July, $2 billion of undisbursed loans were cancelled.

At the end of August, the IMF approved a $1.3 billion, three-year loan to Zambia, the Reuters report goes on to say. At the end of 2021, the country had a 133% debt-to-GDP ratio, according to the IMF.

In addition, Musokotwane said the government had obtained $300 million on concessional terms from the World Bank to boost commercial farming.

He added that the government would hike its participation in the mining sector by acquiring “golden shares”, and that progress was being made in resolving issues at the Konkola and Mopani copper mines, where it is seeking new investors.