Stimulant budget anchored on pro-poor growth
Published On October 4, 2023 » 849 Views» By Times Reporter » Business, Columns
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DESCRIBED by many stakeholders as progressive, the 2024 National Budget will be anchored on stimulating economic growth to achieve improved livelihood as evidenced by the rise in allocations to key sectors of the economy.
Finance and National Planning Minister Situmbeko Musokotwane unveiled the K177.9 billion budget last Friday.
The proposed budget is more than K10 billion higher than for 2023 which was pegged at K167.3 billion.
In this blueprint delivered under the theme: “Unlocking Economic Potential,” the Government shows determination to lower the cost of living by introducing measures to address the high mealie meal and fuel prices while targeting to grow the economy by 4.8 per cent next year.
According to Dr Musokotwane, this year the economy is projected to grow by 2.7 per cent as compared to 5.2 percent in 2022.
The slowdown is as a result of reduced production in the mining sector on account of operational challenges and flooding in some of the major mines.
Out of the K177.9 billion budget planned, the Government is projecting to generate K141.1 billion or 22 per cent of the Gross Domestic Product (GDP) from local resources.
The remaining K3.4 billion or 0.6 per cent of GDP will come from grants from cooperating partners and K33.3 billion will be done through debt as indicated in the country’s annual borrowing plan.
In the mining sector, Dr Musokotwane is hopeful the tax and fiscal incentives the Government is providing will in the near future boost the sector’s contribution to the GDP.
In the first half of 2023, according to Dr Musokotwane, production of copper, emeralds and manganese plummeted significantly mainly due to operational challenges especially in North- Western Province.
This was compounded by flooding and low ore grades.
He says that before the year-end the Government will announce the coming in of a giant mining investor.
The Government is upbeat about the earnest resolution of ownership issues at Konkola Copper Mines(KCM) which will be followed by Mopani Copper Mine (MCM) and the possible coming on board of new mines, aboost in production in 2024 and beyond.
In the energy sector, the Government is promising critical reforms to incentivise the investors.
“To mitigate the high cost of transporting petroleum products, the Government was looking at the successful conversion of TAZAMA Pipeline from a petroleum feedstock to a low sulphur diesel carrier,” Dr Musokotwane says.
He tells the house that the Government has now developed regulations toenable players in the sector to have third-party access to the TAZAMA Pipeline and the enhancement of competition among the suppliers.
Government wants the private sector to take advantage of this and participate in the supply of petroleum products.
Dr Musokotwane maintains that the Government has no intention to reintroduce fuel subsidies as this will mean abolishing free education as a trade off mechanism.
He further announces that the Government is implementing measures to increase electricity generation capacity which currently stands at3,790 megawatts.
The removal of customs duty on electric motorcycles, electric vehicles, electric buses, electric trucks, and attendant accessories such as charging systems are some of the tax incentives in the clean and energy sector.
Other tax incentives are the reduction in excise duty to 25 percent from 30 percent on hybrid vehicles designed for the transportation of persons.
On Agriculture, Dr Musokotwane clarifies that the Farmers Input Support Programme (FISP) will not be abolished as he apportioned K8.6 billion for 2024.
Out of the total budget allocation for Agriculture, Fisheries and Livestock amounting to K13.8 billion, FISP will get the largest share of K8.6 billion.
Tourism will also have a unique share of the budget as the Government has allocated K769.5 million for the development of tourism infrastructure.
Dr Musokotwane says the money allocated to the tourism sector is meant to boost it.
He says it will, among many other things, be used for marketing, wildlife management, and development of tourism products.
The main allocation is earmarked for the rehabilitation and upgrade of Mansa, Mbala, Mongu, and Solwezi Airports and the development of Chinsali, Choma, and Kasaba Bay Airports.
Similarly, Citizens Economic Empowerment Commission (CEEC) will receive substantial resources of about K391.9 million while K150 million has been allocatedto the Public Service Microfinance Company.
Other interesting features in the budget is the raising of Pay-As-You- Earn (PAYE) to a record K5,100 from K4,800.
The threshold has also moved down for the top bracket rate to 37 per cent from 37.5 percent.
More interestingly, each constituency will now receive K30.6 million from the current K28.3 million Constituency Development Fund (CDF) per year.
Other measures include the proposed introduction of tax levyon mobile money transactions which will be in the range of betweeneight ngwee and K1.80 on the transaction value for person-to person mobile money transfers.
The fee structure of between K1 to K150, eightngwee, above K150 toK300, 10ngwee, above K300 to K500 will be 20 ngwee and above K500 toK1, 000, 50 ngwee.
The other tier will be above K1, 000 to K3, 000, 80 ngwee, above K3,000 to K5,000, K1, above K5000 to K10,000, K1.50 and above K10,000, K1.80.
Additional proposed tax measures include, increasing specific excise duty on non-alcoholic beverages to 60 ngwee per litre from 30 ngwee.
Dr Musokotwane has also proposed an increase in specific excise duty for tobacco and tobacco products to K400 per mille from K361 per mille.
There is also an introduction fee of K3, 750 for DNA testing under the National Forensic Science and Biometrics Department.
He proposed an increase in the licence fee for commercial Kapenta operators to K4,000 from K3,333 last revised in 2011.
The minister also proposes to increase in toll tariffs for heavy duty trucks with four axles to K100 and abnormal load vehicles to K300.
Like Luapula Chamber of Commerce and Industry (LCCI) President Emmanuel Munsanje has stated, it is up to the citizens to take advantage of various incentives and budget provisions to participate fully in the country’s economy
By KENNEDY

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