By MAIMBOLWA MULIKELELA?? –

FINANCE Minister Alexander Chikwanda will source for K10.5 billion from the international market to help finance the 2015 Budget deficit which is around K15 billion.
Mr Chikwanda explained that the current budget deficit had been narrowed to K10.5 billion from  K20 billion which would be financed through external borrowing.
The Government had projected the budget deficit around K8.5 billion but it swelled to K20 billion.
As an immediate intervention, the Government realigned some of the budgeted programmes such as undertaking new capital projects but would maintain funding to the education and health sectors.
This resulted in slashing the deficit by K5 billion to around K15 billion and while the K10 billion would be sourced from the international market, other modalities would be deployed to service the remaining K5 billion.
“We have realigned our expenditure, especially on new capital projects and other expenditures that are of no emergency. We have not made any reduction to the education and health sectors,” he said.
Mr Chikwanda said this when he launched the fifth Zambia Economic Brief in Lusaka yesterday entitled ‘Making mining work for Zambia: The economic environmental and health nexus of Zambia’s copper mining Eeconomy’ released by the World Bank.
“Rationalising expenditure and making a projected saving of K5 billion involves limiting expenditures on completion of on-going capital projects before embarking on new projects,” Mr Chikwanda said.
“The proposed budget gap of K10.5 billion will be financed through external borrowings and this means that the annual debt servicing which is now sitting at US$350 million will increase to $500 million.
To address these pressures and ensure macro-economic stability and positive growth, the Government intended to raise additional revenue of K500 million by increasing the fee unit from?20 to 30 ngwee.
“We will let you know how we intend to raise the K10.5 billion budget deficit in due course,” he said.
The mining sector remains one of the latest employers and would contribute significantly to national growth.
Mr Chikwanda said efforts should be made to diversify the economy by focusing on agriculture and energy sectors.
World Bank country director Kundhavi Kadiresan said mining was an important source of tax revenue, foreign currency and jobs for the people of Zambia.
“It is, therefore, important that decisions made are conducive for sustained growth of the sector and national wealth,” Dr Kadiresan said.