Agriculture Permanent Secretary Green Mbozi says the K7.2 billion (about $420 million) agriculture budget deficit will be financed by the supplementary budget.
The new dawn government had set aside K3.6 billion (about $212 million) for the procurement of fertilizer for the 2022/2023 Farmer Input Support Programme (FISP) but the increase in prices of fertilizer between the time of budgeting and now has meant that the funds are now inadequate.
Speaking in an interview with the Zambian Business Times – ZBT, Mbozi said the ministry engaged the treasury because as soon as the suppliers start supplying and they meet all the conditions they will require to be paid according to contract, therefore government needs to have the funds readily available.
Mbozi explained that the Ministry of Agriculture and the Ministry of Finance agreed that the total cost of procuring is now estimated at K10.8 billion (about $630 million) while the allocated budget was only K3.6 billion, so the difference of about K7.2 billion is the deficit which the treasury will have to Finance.
When asked by ZBT how the deficit will be financed, Mbozi states that “we would not have advertised if we had not resolved the issue of how to finance the deficit. The financing of the deficit has been agreed, as you know if normally we are within budget, we could have just advertised the procurement without seeking authority from the treasury”,he said.
He noted that there was a delay in advertising until the modalities of financing the deficit were agreed and since they have been agreed the ministry has been allowed to advertise.
Finance Minister Situmbeko Musokotwane is pushing to access $1.4 billion from an IMF extended credit facility which he now projects to get by the end of quarter three (end of September 2022). But even when accessed, these funds are expected to be disbursed over a period of three years.
