The Zambian government plans to spend K106 billion (about US$8.2 billion) for the National Budget representing 32.4 perscent of Gross Domestic Product – GDP indicating an increase from the 2019 budget of K86.8 billion which was 28.9 percent GDP.
Presenting the 2020 National Budget at Manda Hill, Zambia’s legislative house in Lusaka on 27 September,2019, Finance Minister Dr. Bwalya Nga’ndu explained that government intends to increase domestic revenue mobilization to at least 22.0 percent of GDP, a stretch for the Zambia Revenue Authority – ZRA, Governments Agency responsible for tax revenue.
The Finance Minister has further increased allocation towards dismantling of arrreas to K2.3 billion in 2020 from K437 million in 2019 and has proposed to reduced borrowing from the domestic market to 1.1 percent of GDP from 1.4 percent of GDP in 2019. This moves is aimed at shoring up the domestic liquidity conditions and support mostly local suppliers who are now given preferential treatment with the newly introduced procurement guidelines.
Meanwhile, government aims to grow GDP to a modest 3%, the fiscal deficit is projected to reduce to 5.5 percent of GDP in 2020 from 6.5 percent projected for the financial year 2019, a demonstration of governments resolve to restore fiscal health and stabilize the economy. The Finance Minister also announced that Zambia will maintain the 2019 target inflation range between 6 to 8% into 2020.
Dr. Ngandu, has also allocated a total of K44.1 billion for General Public Services and that notable expenditure under this category include K33.7 billion for servicing debt obligations and K2.3 billion for dismantling of arrreas to unlock the much needed liquidity in the market. K636.0 million has also been allocated towards redemption of the Eurobonds.
“In order to finance expenditure spelled out for the 2020 Budget, government expects to raise a total of K106.0 billion for the 2020 Budget. K53.8 million will be raised from taxes, K18.2 billion will come from non-tax revenues, and K3.1 billion will comes as project support grants from our cooperating partners, ” he said.
