Chikwanda admits K11 billion deficit

The Minister of Finance Alexander Chikwanda yesterday disclosed that government was running a deficit of K11 billion and warned that the country did not have the luxury of offering subsidies.

Speaking in Parliament when MPs wanted to know the purpose to which savings had been employed; Chikwanda explained that subsidies were charges on public resources which could not be sustained.

He urged MPs not to give false hope to the citizens that government could afford to subsidise consumption.

The minister was responding to a heated debate in which members wanted to know what tangible benefits had been achieved by the populace following the removal of fuel, fertilizer and maize subsidies as promised by the government.

Chikwanda conceded that the savings made did not amount to an accumulation that could be readily transferred to other purposes but that government did not have to spend the money any more.

Any subsidy, he said, would entail a deepening deficit which the economy could not readily sustain.

In the same sitting, the Minister of Commerce and Trade Emmanuel Chenda disclosed that the government had decided to embark on a value chain cluster to take comparative advantages in the various parts of the country than creating economic or industrial zones.Industrial zones, he said, were very expensive while value chain clusters were more cost effective because they utilized resourves which were readily available.He cited Eastern Province where the chain would utilize groundnuts, process them and produce final products for the market.

Similar chains would be considered for other crops and products.