The Zambia Institute for Policy Analysis and Research – ZIPAR, a think tank organisation has stressed the need for government to show commitment in funding the 2020 National Budget item, which is meant to unlock the private sector growth among other sectors.
ZIPAR has stated that despite budgeting K1.3 billion in 2018 to liquidate arrears, only 33% was funded adding that the same situation applied in 2019 where only 18% was allocated for funds towards arrears hence the need to show commitment towards the 2020 allocation of about K2.3 billion.
Speaking during the post budget analysis co-hosted by ZIPAR and Ministry of National Development and Planning in Lusaka on October 3, 2019, ZIPAR researcher Shebo Nalishebo said arrears have a detrimental effect on the local economy as they hit businesses badly which can lead to delayed wage payments and postponed investments hence holding back on economic growth.
ZIPAR has also projected debt servicing costs to increases by 43% in 2020 stating that unrestrained borrowing has put Zambia’s public debt on an unsustainable path of 76% of Gross Domestic Product – GDP.
Nalishebo has explained that despite government borrowing to finance infrastructure development, the very infrastructures expected to bring economic growth and social transmission are killing growth hence the need to deal with issues around cost escalations in infrastructure projects by leveraging on the use of PPP’s if the country is to stimulate growth again.
“we would also like to note that the budget’s measures to the mining sector have been introduced against the backdrop of a long-held view that mining companies do not contribute their fair share of taxes to the economy as well as, in the Minister’s words “to raise revenue for the government and discourage transfer pricing”, while these measures are intend to increase government revenue , they are too burdensome on the mining companies to achieve the objectives of encouraging value addition as indicated by the Finance Minister”, he said.
And delivering a speech on behalf of Ministry of National Development and Planning, the Ministry’s Permanent Secretary Chola Chabala said the 2020 national budget is aligned with the pillars of the Seventh National Development Plan – 7NDP which demonstrates government’s commitment towards realizing the objectives of the 7NDP and the visions 2030.
Chabala added that economic diversification and job creation have been priotized and anchored on the agriculture, tourism, mining, energy and manufacturing sector in line with the 7NDP.
