Massive pressure on the treasury as a result of the collapsed 2013 budget will force the PF government to abandon some of the ambitious but unplanned projects and may ultimately lead to the “printing” of more by September to meet the increased emoluments for civil servants, a Government source has warned.
The overrun created by political decisions, many of them made by the president without cabinet approval has created serious tension in Government.
So deep are the divisions that the Minister of Finance Mr. Alexander Chikwanda whose budget has been overrun has proceeded on “leave” only to report occasionally when foreign delegations visit the country.
Reports that the Minister was on forced leave have been discounted, ” The Minister is expected to travel to Mongu today (Friday) on a World Bank Mission but will go back on leave soon after that.” He said.
“Yes there are tensions arsing from the budget and what is happening in the royal-Chitimukulu kingdom but the Minister is still very much in place.” He said. The Minister, he said, was concerned by unprecedented and unbudgeted activities including a massive rise in civil servants emoluments, spate of by-elections, new capital projects including districts, roads, universities and the recall of almost the entire diplomatic corps- all of which have combined to derail the entire 2013 budget and most of what could realistically be expected from taxes in the next two years.
“Civil servants emoluments alone if implemented in the present form will consume almost 70 percent of this years total budget. This is unthinkable under the present circumstances in which revenues are limited due to the erratic copper prices and general demands.” He said.
Meanwhile the cartel is reported to be taking advantage of the tension in Government to exert pressure on President Sata to replace Mr Chikwanda with former Minister of Finance Ngandu Magande who is reported to be more amenable to the write off of the K18 billion debt owed to the Development Bank of Zambia (dbz) through the defunct Zambian Airways owned by Mutembo Nchito (DPP), Fred Mmembe (post Newspapers) and Nchima Nchito.
“There is no way the Minister of Finance can source money for the construction of so many universities, roads, school, clinics and in addition almost double emoluments for civil servants from the limited means at his disposal.” the source said.
He explained that the removal of subsidies was a diversionary attempt intended to divert attention from the unplanned projects which the treasury was being asked to fund, “There is no subsidy on maize budgeted because money is already owed to banks from the last crop.” He said.
There was also no real subsidy on fuel because the purchase price was already too high but Government expected to bridge the difference with the increased price “The outlook generally is bleak because revenue sources are very limited compared to the demand which was being made.”
Unfortunately, he said, the President was being given the impression that Mr. Chikwanda was being uncooperative and therefore unwilling to fund the various projects, “This has created a lot of tension especially among technocrats who are blaming Mr. Chikwanda for not restraining the President from undertaking projects for which there is no budget provision.”
Efforts to contact Mr. Chikwanda proved futile as his mobile phone went unanswered.