IT was a sunny Friday afternoon, but almost the entire populace was eager to listen to the 2024 National Budget presentation by Finance and National Planning Minister Situmbeko Musokotwane.
Despite the scorching heat, many were glued to various media channels to get first hand pronouncements in the proposed budget, while those invited to Parliament, attentively followed the presentation in the auditorium.
Definitely, the people’s expectations were met, particularly with the revised Pay As You Earn (PAYE) threshold, which would ameliorate the suffering of the people in the formal sector.
With a proposed expenditure of K177.9 billion, the 2024 budget is expected to focus on promoting economic growth through enhanced private sector investment.
This is the third budget that the New Dawn administration is presenting to Parliament since assuming office two years ago.
Coming after the 2023 one pegged at K167.3 billion whose theme was:
‘Stimulating economic growth for improved livelihoods’, the 2024 budget fits in well as an all-inclusive plan.
The proposed budget has highlighted an increase in the allocation of resources to areas such as human and social development, health, water and sanitation as well social protection, among others.
Premised on the development strategy as outlined in the eighth national development plan, the government policies include economic transformation and job creation, human and social development and good governance environment.
The interventions that will support economic transformation and job creation include those under the agriculture, livestock and fisheries sectors.
It has also addressed bottlenecks in the tourism sector by announcing a unilateral waiver of tourist visa requirements for citizens from selected countries which has resulted in a boost of tourist arrivals.
Dr Musokotwane states that in the first half of 2023, international tourist arrivals increased by 22 per cent to 605, 650 tourists from 496, 456 recorded in the corresponding period in 2022.
He says the United Party for National Development (UPND) administration has achieved excellent progress in changing the social and economic landscape of the country
The minister adds that next year’s budget will be made possible through increased production and productive, as well as improved public service delivery, and the government has committed to provide the policy framework, resources and incentives to unlock the economic potential of the country.
He states that on the economic front, Zambia’s external debt is now under control following the debt restructuring agreement reached earlier this year.
The rate of increase in prices of consumer goods or inflation which the New Dawn government found at 24 per cent has reduced to 12 per cent.
“And, notwithstanding periods of instability, the exchange rate of the Kwacha is relatively more stable now than before,” he says.
Of particular significance is that the strategic equity partner for Konkola Copper Mines has now been selected while that for Mopani Copper Mines is imminent.
Once this process is concluded, the Copperbelt Province, and indeed the country at large, will soon come back to life.
Under the social sector, the government has provided free education, recruited more public workers, scaled- up social protection, enhanced Constituency Development Fund, and devolved some functions to local authorities.
“Ordinarily, these should be achievements over an entire five-year term, but this has happened in just two years,” he adds.
Dr Musokotwane says the 2023 budget performance has been favourable with subsidies on fuel now going to the education sector under the government policy of free education and the employment of more teachers.
Apart from teachers’ recruitment, the 2024 budget has funds allocated for the employment of 4000 health workers.
This is indeed building on the promise, a fantastic promise of job and wealth creation, as stated by Dr Musokotwane.
From the budget highlights, one of the exciting news is the allocation of K4.8 billion Constituency Development Funds (CDF), which means that all the 156 constituencies in the country will each receive K30.6 million from K28.3 million.
On inflation, which hit 12 per cent last month, Dr Musokotwane says this has been driven by increases in prices of maize grain and meat products as well as the depreciation of the Kwacha against the dollar.
The depreciation of the local currency which has traded around K20.05 between January and August this year, is mainly on account of strong demand while inflows, especially from the mining sector, reduced.
He explains that in response to the rise in inflation, the Bank of
Zambia (BoZ) raised the policy rate by 100 basis points to 10 percent while the statutory reserve ratio increased by 250 basis points to 11.5 per cent in February, this year.
The minister adds that to unlock Zambia’s economic potential, constraints facing the economy, especially in the mining, energy, manufacturing and agriculture sectors must be addressed.
These include low production and productivity, low diversification and industrialisation, low private sector investment, low access to affordable finance and low citizen participation.
“The journey to economic transformation we embarked on in 2021 requires us to unlock the potential of our country and build resilience through inclusiveness and partnerships. This calls for hard work, perseverance and discipline to achieve our shared vision,” Dr Musokotwane says before adding that:
“We are alive to the challenges confronting us especially the high cost of living. Your Government is working towards addressing the high mealie meal and fuel prices. We are also revamping the economy to create employment opportunities for our people.”