On Friday 29th September, 2023, Minister of Finance and National Planning, Hon. Situmbeko Musokotwane, will present and deliver Estimates of Revenue and Expenditure for the Year 1st January 2024 to 31st December 2024.
This will be Musokotwane’s 3rd National Budget since the New Dawn Government came into office.
A close scrutiny of the last two national budgets show that domestic revenue has declined, local and foreign borrowings have rapidly increased, adherence to fiscal discipline has declined and austerity measures have lamentably failed as seen by numerous presidential and ministerial international trips among others.
This is amidst national crises related to food security, declining economic growth, high unemployment rate and worrying rising poverty levels.
During the TOWNHALL FORUM on the 2023 Mid-Year Performance Review & the 2024-2026 Medium Term Budget Plan, that Zambia held on 22nd August 2023 at Mulungushi International Conference Centre, Musokotwane announced that Government had downgraded economic growth prospects from 4.7% to 2.7%.
It must be stated that Musokotwane’s budgets have failed to resolve these crises.
But these is attributable to President Hakainde Hichilema who firmly believes in foreign solutions and despises local and home-grown policy approaches.
President Hichilema has anchored his entire faith in the International Monetary Fund and Foreign Investment to resolve these deep-seated crises facing the nation and has paid little attention to mobilising domestic resources.
To make matters worse, his Government has endangered national and food security by exporting almost the entire national strategic maize grain reserves.
Like he did to electricity, despite the country having adequate generation capacity, he dedicated a large amount of eletricity to power exports to the region which saw Zambia endure one of the worst loadshedding period in 2022.
Government has continued to bungle the agriculture sector, the source of reliable food source, with their wanton acts of corruption, negligence and incompetence.
Government has engaged in acts of grand corruption as seen in the Sugelite and Gold scandals.
STATE OF THE NATION
On Page 42 of the International Monetary Fund 2022 Country Report under the Request for Zambia to have an Extended Credit Facility (ECF), the report paints a gloomy picture and predicts social unrest;
“Widespread social discontent and political instability. Social unrest fueled by increasing prices, rising inequality, inadequate healthcare triggers political instability, capital outflows, higher unemployment, and slower economic growth.”
“Further increases in fuel and electricity prices may lead to social unrest. This could slow down much needed reforms and dent investor confidence.”
The Report recommends that;
“Zambia should take measures to strengthen governance and anti-corruption frameworks. Implement orderly fiscal adjustment, notably by increasing domestic revenue and reducing capital expenditures and reforming subsidies for agricultural inputs. Use some of the fiscal space to boost spending on social assistance. Improve the efficiency in fuel procurement.”
Clearly, Government has ignored the proposed recommendations as corruption has increased.
Further, the attempt to reform or abandon the Farmer-Input Support Programme (FISP) as directed by the IMF, will spell disaster as national food insecurity will increase and families will be burdned with high and unaffordable food prices.
POVERTY LEVELS SOARS
The Zambia Statistics Agency (ZamStats) with the support of co-operating partners conducted the eighth Living Conditions and Monitoring Survey (LCMS) in June/July 2022.
These were the findings;
■ national average poverty has worsened from 54% to 60% of the population are poor.
■ Rural Poverty has worsened and now stands at an average of 78.8%.
■ Urban poverty has worsened and now stands at 31.8% from 23.4%.
■ Muchinga has taken over as the poorest province in the country standing at 82.6% poor population after Western Province and Luapula provinces.
■ By province, results show that poverty levels have gone slightly down in North-western (61.6% from 66.4%), Luapula (77.3% from 81.1%), Western
(78.6% from 82.6%) and Northern (78.0% from 79.7%) provinces.
■ Muchinga province had the highest proportion of the population that was poor at 82.6 percent, followed by Western and Northern provinces.
A robust shift in workable economic policies to arrest the rise in poverty levels is required immediately.
COST OF LIVING FOR AUGUST 2023
The cost of living for a family of five, as measured by the Jesuit Centre for Theological Reflection (JCTR) Basic Needs and Nutrition Basket (BNNB) for the month of August 2023 in Lusaka, stood at K9, 267.34.
This remains too high for many families whose income of the breadwinners, remain low and unreliable.
BUDGET FAILS TO ATTEND TO THE NATIONAL CRISES
The 2023 Budget was pegged at K167 billion, and the Minister of Finance recently presented a SUPPLEMENTARY APPROPRIATION (2023) BILL, 2023, which authorized supplementary expenditure of yet another K11 billion Kwacha.
This is careless and failure by Government to adhere to approved expenditure.
Despite this huge expenditure in the year, there is little to show as all things, unemployment, poverty, disease burden and high cost of living, have become worse.
Further because of tax incentives given to multi-nationals and mine houses, the burden has been shifted to small and medium enterprises, workers and ordinary people to shoulder the burden of taxes.
CONCLUSION
The new Estimates of Revenue and Expenditure for the Year 1st January 2024 to 31st December 2024, will be like the previous two national budgets presented which were presented with funfair but achieved nothing.
There is little hope that any measurable economic improvements will be recorded during the period and the economy will continue to decline.
It is imperative for the New Dawn Government to recognise that its foreign-centric approach to national development has failed.
Government is called upon to convene a National Economic Indaba to listen to other proposed solutions beyond their own failed circle as the first step to help rescue the country.
Signed;
Hon. Given Lubinda
Vice President
PATRIOTIC FRONT