ALL seems set for the presentation of the 2024 National Budget.
Finance and National Planning minister Situmbeko Musokotwane is, for the third consecutive year, expected to present the budget to Parliament on Friday this week.
Therefore, I have decided to pick one sector as my priority for this year because of the critical role it plays to the national wellbeing and economic development.
The agricultural sector is my priority sector for this year for the sake of the budget focus.
I feel that, if well handled, this sector could contribute to the national economy much more than the mining sector has been doing.
In the last decade or so since 2012 I have indicated that the biggest failure of the Movement for Multiparty Democracy (MMD) in the first 10 years of its rule was the ostensible neglect of the agriculture sector following the removal of government support towards it.
I have always noted that the first decade of the MMD rule will remain in Zambia’s history as wasted years for most of the rural dwellers who became impoverished as the result of lack of government support towards the agricultural sector, their economic mainstay.
At the risk of sounding political, I would say the government’s neglect of the agriculture sector then condemned the rural inhabitants – most of who are small scale farmers – to perpetual beggars of food.
This gave yield to the phrases, which you may remember, like “relief food,” and “food for work,” as villagers lined up for government rations of maize, beans and such other cereals, which are a thing of the past, unless I periods of natural calamities, like drought.
Therefore, late President Levy Mwanawasa’s introduction of FISP marked the reversal of the situation and revived the countryside.
Positively, successive governments, thereafter, have done well by continuing with FISP.
Over the years, however, there have been some complaints that maize cultivation has always received the lion’s share when it comes to government support.
Before coming into power, the previous ruling party, the Patriotic Front (PF), promised to change the situation by pledging to partition the country into agricultural zones and provide support to the farmers according to the comparative advantage of each region.
What this meant was that areas whose climatic and other conditions supported the growth of maize, for instance, were supposed to be supported with input for maize while those areas which are suitable for rice or sweet potatoes and so on were supposed to receive support for growth of those particular crops.
This, sadly, was, like many other progressive policies, not implemented leading to the indiscriminate cultivation of maize, albeit at great average cost due to low productivity in some areas.
It is interesting to note that while the PF’s pledge to address the imbalance in terms of agricultural support towards maize remained in words, the ‘New Dawn’ administration has put it in action by coming up with the Comprehensive Agriculture Transformation Support Programme (CATSP).
Generally, and interestingly, CATSP aims at increasing food security, improving nutrition, increasing job opportunities, agricultural exports, reducing food imports and increasing wealth creation opportunities.
Therefore, starting in the next budget, there should be increased funding towards the agricultural sector in general and CATSP in particular.
This is to ensure adequate support towards the cultivation of various crops as well as towards the rearing of livestock.
To ensure enhanced national food security more funds should be allocated towards the support of crop cultivation, starting with maize of course.
The funds should be much more than the K11.2 billion allocated to the sector in the 2023 national budget, out which the FISP got K9 billion.
To ensure constant supply of the staple food, the government should set aside ample funds for the cultivation of winter maize through the irrigation and farm block development.
Therefore, this field should get much more than the K427 million it did this year.
This is to ensure that even amid possible smuggling of the maize, the country will still remain food secure.
In line with the CATSP, the government support should be accessed by farmers from various fields – not just those involved in the growing of maize – to ensure an all-inclusive development of the agricultural sector.
To address the staple food supply side, the government should, somehow, get involved in the processing of the maize and other food crops.
A few years ago, this publication, in conjunction with the Zambia
Insurance sector upbeat about growth prospects
By ANDREW MULENGA
and KETRA KALUNGA
ACCORDING to the Insurance Association of Zambia (IAZ), the insurance sector in the country posted an increase in gross premiums to K6.1 billion in 2022 from the K5.344 billion recorded in 2021.
The sector has continued playing a vital role as it helps to create investor confidence while providing security to the lenders such as banks and micro-finance institutions thus making it a critical sector in steer economic growth for Zambia.
AIZ is optimistic that the sector’s growth will continue beyond this given its submissions towards the 2024 national budget which it expects the Ministry of Finance and National Planning to positively consider.
Finance and National Planning Minister Situmbeko Musokotwane is set to present the 2024 National Budget to Parliament on Friday.
The budget is expected to outline the government’s fiscal policies and priorities for the coming year.
AIZ executive director Nkaka Mwashika says the association is optimistic that the Government will consider increasing the pension deductions from 10 to 15 per cent of total allowable earnings.
Dr Mwashika says currently, many workers in the country do not have retirement resources apart from the mandatory National Pensions Scheme Authority (NAPSA) or other Government schemes.
He says, therefore, increasing the allowable threshold to 15 per cent will act as an incentive for employees to consider joining approved pension schemes as a way of preparing for retirement.
The AIZ boss also says the association is eager to see concessions in terms of abolishing Withholding Tax on Government securities.
Dr Mwashika says in a statement that this will encourage further investments towards pensions and other long-term investment facilities.
“We also hope to see incentives to promote the increased provision of microinsurance products to our communities,” he says.
Dr Mwashika says the insurance industry is further proposing that group life insurance should be made compulsory for all organisations with 50 or more employees.
He says this will help surviving family members financially, and thereby reduce on cases of indigent members of society due to the untimely demise of a breadwinner.
Dr Mwashika adds that marine insurance is also an area with a lot of potential to generate revenue for the Government and to grow the insurance sector.
He says domestication of marine insurance will result in the growth of the insurance sector and increased tax revenue for the treasury.
The IAZ further proposes mandatory uptake of fire insurance.
It states that making mandatory uptake of fire insurance by all businesses and urban houses will reduce the economic impact caused by fire occurrences.
Dr Mwashika says the players in industry are, therefore, hopeful to see measures that will enhance the local uptake of marine insurance cover.
He says the association is confident that the proposed measures will bring economic returns for the nation and increase the contribution of insurance to Gross Domestic Product.
Industry players such as Minet Brokers are happy with the government’s responsiveness to most of their key concerns in the 2023 national budget.
Minet Brokers managing director Humphrey Kabwe says the government has over the years been instrumental in facilitating a conducive environment to conduct insurance business in the country.
“This can be observed from how quickly the industry concerns were addressed in the previous budget,” Mr Kabwe says.
He adds that this is what had set the industry on the growth trajectory and exposed the sectors growth potential to other economic players.
Mr Kabwe hopes that the government will maintain the insurance levy at five per cent in the 2024 national budget.
He says this policy has worked well since its increase from three per cent in the 2023 budget.
Mr Kabwe says the government has been able to reach its revenue targets from the insurance industry with the five per cent insurance levy hence the more reason to maintain it.
“For this fiscal year we would like for the insurance levy to maintain in order to encourage more purchases of insurance products,” he says.
Mr Kabwe cautions that any increment will likely make insurance cost prohibitive in an environment that already has a low insurance penetration.
In addition, he lobbies for compulsory insurance packages for government infrastructures.
Mr Kabwe says this is because the country has experienced incidents were public markets are gutted and public schools as well as health centres having their roofs blown off even being flooded.
He says instead of straining the Disaster Management and Mitigation Unit (DMMU) resources, government can introduce compulsory insurance and those resources can be used for other important matters.
The insurance sector’s growth potential has been equally noticed by financial service providers such as banks who have moved in to forge partnerships to further grow the industry and its contribution to economic growth while benefiting from it.
Zambia National Commercial Bank (ZANACO) chief executive officer Mukwandi Chibesakunda says the bank recognises the potential of the insurance sector.
Ms Chibesakunda says the bank has already launched a platform called General Insurance Value Proposition Platform in collaboration with Minet Insurance Brokers as well as other insurance providers.
She says this platform will play a huge role in enhancing access to insurance products across the country and in turn grow the sector as the platform is available at all ZANACO outlets which has footprints all over the country.
The role that the insurance sector plays in economic growth is indeed vital and facilitating a conducive environment for the industry to do business cannot be overemphasised.
Cooperative Federation (ZCF), championed the promotion of the use of township hammer mills to make the mealie meal more available and affordable.
This was way before former President Edgar Lungu took it as one of his campaign items in 2015 presidential by-elections.
Later, the idea seemed to have been hijacked and not well implemented leading to the alleged disappearance of some of the solar milling machines which were procured by the government.
However, the idea, which entails availability of milling plants at township, constituency and district levels, remains a viable and progressive one which the government should consider funding under the 2024 national budget.
To maintain some levels of price stability for mealie meal, the government should have directly been running some of the milling plants, or at least through the cooperative societies dotted around the country.
The government milling plants would directly be fed by the Food Reserve Agency and pass on the benefits of the lower prices of maize the agency offers.
Alternatively, the government should promote the acquisition of these machines by the members of the private by removing the relevant taxes involved in their importation.
Individually, the Constituency Development Fund Committees should consider procuring these gadgets, with or without the current taxes, to service their constituents.
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